Textile and apparel industry: A spectacular comeback?

According to the Vietnam Textile and Apparel Association (VITAS), Vietnam has approximately 3,500 foreign-invested textile and apparel projects worth $37 billion.

The status of the textile and apparel industry in 2023

The textile and apparel industry relies significantly on foreign enterprises, which account for 65% of the industry’s overall export revenue. Korea is the largest investor among major FDEs like Japan, Taiwan, Hong Kong, etc. The top destinations for foreign enterprises in textile and apparel are Dong Nai, Binh Duong, Tay Ninh, Long An, Nam Dinh, Hai Duong, and Binh Phuoc.

In 2023, the decline in demand from major markets like the EU and the US caused about a 9.2% decline compared to the previous year, with a significant reason being that buyers demand green products. The highlight of the textile and apparel industry last year was the breakthrough in the market when Vietnam expanded exports to 104 markets and territories. Apart from the traditional major markets of the United States, Japan, and Korea, the textile and apparel industry also steadily exported to China, England, Canada, Cambodia, and other nations and successfully broadened the market into other new areas in Russia, India, Africa, and Muslim nations.

The sign of recovery in 2024

According to the Vietnam Textile and Apparel Association, the industry aims to export 44 billion USD this year, which is 9.2% more than in 2023 and an increase of approximately 4 billion USD.

In the first four months of 2024, order volume rose to a total of 10.3 billion USD in export revenue, up 6.3% year-on-year, which is a good sign and shows that manufacturers are gradually moving to green standards. Parallel to the increase in export value, there was an increase in import value for items such as fibre (22.5%), cotton (20.2%), raw materials (18.9%), and fabric (6.5%).

In addition to being known as the third largest exporter in the world, Vietnam is still an attractive investment destination for giants in the garment manufacturing industry. The first months of 2024 witnessed some major foreign enterprises continuing to invest in Vietnam (more details can be found here), typically:

• In February 2024, Nam Dinh Province issued an Investment Registration Certificate to Crystal Group, Hong Kong (China), with a total registered investment capital equivalent to 60 million USD. Products include dyed fabrics, undyed fabrics, and clothing.

• In March 2024, SAB Vietnam Industrial Company Limited, under Weixing Group, held the inauguration ceremony of a factory in Thanh Hoa with a scale of 66.44 hectares and a total investment capital of about 62 million USD. Products: all kinds of zippers, all kinds of buttons,…

Vietnam’s textile and apparel industry has strong potential for growth in the future, thanks to abundant FDI capital, new FTAs, and increased global consumer demand. To preserve its competitive edge, the sector also needs to focus on boosting product-added value and decreasing reliance on imported raw materials.

Source: https://vir.com.vn/vietnams-textile-sector-brings-in-37-billion-in-fdi-111059.html