Favorable investment climate, abundant workforce, and an open economy have led to rise in foreign direct investment (FDI) in Vietnam’s garment and textile sector.
In Q1FY 2024, FDI contributed over 60 per cent to the $8 billion export revenue achieved by Vietnam's garment and textile industry
Vu Duc Giang, Chairman of the Vietnam Textile & Apparel Association (VITAS), notes, foreign garment and textile companies are expanding their presence in Vietnam to capitalise on the opportunities offered by the Vietnamese market. This expansion is a result of the various free trade agreements (FTAs) being signed by Vietnam, especially recent agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), EU-Vietnam FTA (EVFTA), and Regional Comprehensive Economic Partnership (RCEP).
The industrial parks management board of Nam Dinh province has also granted an investment certificate to Hong Kong-based Crystal International Group to develop its $60 million Yi Da Denim Mill project. The group already operates several plants in northern localities such as Hai Duong, Hai Phong, Bac Giang, and Phu Tho, as well as in the southern province of Binh Duong. These operations have already generated export revenue worth around $1 billion besides creating employment opportunities for approximately 40,000 local workers.
In another development, the world's leading zipper producer from Japan, YKK Corp has invested in its second plant in the Dong Van industrial zone of Ha Nam province. Highlighting the company’s remarkable growth in Vietnam over the last 25 years, Yuji Furukawa, General Director, YKK Vietnam, notes, zipper productivity in the country has increased by 100 times while workforce has expanded to 2,800 employees. Currently, the Vietnamese plant of the company manufactures all of YKK products, thus eliminating the need for imports and even enabling exports to countries like Cambodia and Myanmar.
Adding to this momentum, a subsidiary of China's Weixing group, SAB Industrial Vietnam Company, inaugurated its $62 million factory in Thanh Hoa province. Spanning 66.44 hectare, the factory produces various items including metal, plastic, and nylon zippers, as well as plastic and metal buttons. This investment not only reduces the sector's reliance on imported raw materials but also improves manufacturing efficiency and lowers transport costs, enhancing the competitiveness of Vietnamese products.
