Vietnam has lured big investments into the textile & garment industry, but textile dyeing & processing projects are unwelcome in localities for fear for pollution.
Apparel Far Eastern from Bermuda recently received an investment certificate to implement a US$ 25 million garment project in VSIP II-A IZ in Binh Duong province, in Vietnam. Also, in the locality, the Taiwanese Far Eastern company, which spent hundreds of millions of dollars on a cloth and chemical fibre project in Bau Bang IZ, signed a contract on leasing more land to expand its investment. In Nam Dinh, Herberton from Singapore has kicked off a textile and garment project, Ramatex, with total investment capital of US$ 80 million, expected to become operational the next year & generate 3,000 jobs. Meanwhile, Japanese Itochu has spent 5 billion yen (US$ 47 million) to acquire an additional 10% of Vinatex's shares, raising its ownership ratio in Vietnam's largest textile and garment group to 15%. According to Nguyen Thi Tuyet Mai, secretary general of the Vietnam Textile & Apparel Association (Vitas), Vietnam is one of the world's leading destinations for investors in the textile and garment industry thanks to bilateral and multilateral agreements Vietnam has signed. The country has joined 16 FTAs, of which the two new-generation FTAs – CPTPP and EU-Vietnam FTA – are expected to facilitate the development of the industry.
Local authorities cautious
The registration of weaving and dyeing projects, according to experts, is good news because Vietnam still lacks a sufficient textile and garment production chain. Vietnam has many garment workshops, but few weaving and dyeing factories.
However, local authorities tend to be more cautious with textile and garment projects, especially dyeing ones. Some localities have refused large projects capitalised at nearly US$ 100 million because of pollution concerns. Deputy chair of Vitas Truong Van Cam confirmed that local authorities have become reluctant to receive such projects. TAL Group from Hong Kong, which plans to set up a US$ 350 million textile and dyeing factory in Vinh Phuc province, has still not received the license, even though it got the nod from the Prime Minister and the Ministry of Natural Resources and the Environment (MONRE).
Most recently, the Vinh Phuc provincial authorities for the fourth time sent a document to the Prime Minister asking to reject the project. Prior to that, Da Nang City also refused a textile and dyeing project registered by a Hong Kong investor with capital of US$ 200 million.
The decisions have been applauded by locals, who say that they will not exchange the environment for textile projects.