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Vietnam textile firm earmarks $190 mln for projects this year

Friday, March 28, 2014, 09:04 GMT+7
Vietnam textile firm earmarks $190 mln for projects this year
An employee works at the manufacturing plant of a Vinatex subsidiary in Ho Chi Minh City.

The Vietnam National Textile and Garment Group (Vinatex) will pour over VND4 trillion ($190 million) into numerous projects including fiber, textile, garment, and cotton farms this year, CEO Tran Quang Nghi told Tuoi Tre in a recent interview.

Some of the prioritized projects will include two plants that can dye 12-40 million meters of cloth per year, Nghi said.

Vinatexwill also invest VND2.2 trillion ($105 million) in a complex which comprises a fiber – textile – garment manufacturing mill, a water supply facility, a wastewater treatment plant, and accommodations for workers, he elaborated.

The textile firm, Vietnam’s largest of its kind, has planned to set up an investment fund, called "TexFunds," with an initial capital of around VND300-500 billion ($14-24 million) in order to attract investments in infrastructure for the textile industry, which is quite costly at the beginning, Nghi added.

Early this year, the Bank for Investment and Development of Vietnam, better known as BIDV, signed an agreement to lend Vinatex US$600 million in the period from 2014 to 2016.

The loan package will be used by the textile firm to improve the efficiency of its production, invest in more projects, and upgrade their manufacturing technology.

The state-owned textile group logged a trade surplus of over $1.7 billion in 2013, Le Tien Truong, deputy director of Vinatex, told Tuoi Tre, adding that it also aims to increase export value by 12 percent this year.

“Vietnam will find more opportunities in many places, apart from the U.S. and New Zealand, in the presence of a TPP agreement with favorable terms and conditions,” Truong said.

Vinatex will build a 1,500 hectare textile industrial park by the end of 2014 in cooperation with two Chinese companies, according to the portal of the Ministry of Planning and Investment. 

The $400 million project, which is located in the northern province of Nam Dinh, is expected to be the biggest textile industrial zone in the country, attracting a number of investors in the fields of dyeing, leather, garment, and textiles from mainland China, Hong Kong, and Taiwan.

Doan Hong Phong, vice chairman of the provincial People’s Committee, said the province will hand over cleared land to the investors by the last quarter of this year, adding that Nam Dinh will create a good working environment for them. Once fully operational, the industrial park will create an industrial production value of $3-4 billion each year, contributing $300-400 million of taxes to the state budget, and generating160,000 jobs.

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