Vietnam will try to raise local contents in apparel products to 50 per cent by 2010 from the current 43 per cent in a bid to reduce reliance on imports, Saigon Times Daily quoted Le Quoc An, general director of the Vietnam National Textiles and Garment Group (Vinatex).
Boosting local production of apparel accessories is one of the most important strategies for the country’s textile and garment industry in the coming years, An said, adding the industry has also been pushing manufacturing to raise output to one billion meters of fabric in the next five years.
Last year, expenditures on imported apparel materials increased by 27 per cent on-year to US$6.5 billion, but the ratio of imported materials on local materials has been falling, which is a positive signal for the industry.
Of the total amount of apparel materials imported last year, cotton fiber accounted for US$28 million, yarn some US$744 million, fabric a lion’s share of US$3.98 billion, and other materials and accessories a combined US$1.5 billion.
However, An said the industry would not seek to boost local contents at any rate, since apparel manufacturers are not bound to use local materials and accessories, and they can choose to import such items to maintain their competitiveness.
If local materials are priced 10 per cent higher than imported items of the same quality, local manufacturers may opt for local sources due to the easy availability and timely delivery.
Up to now, local material manufacturers can supply only 20 per cent to 60 per cent of demands, depending kinds of items. For example, local materials meet 20 per cent of demands for knitwear production, and 60 per cent for woven products.
Asked to comment on local cotton cultivation that is being wiped out due to harsh competition, An said that it is low profit margin that has sent cotton farming to difficulties.
Local cotton cultivation is not subsidized by the Government, so it hardly can compete with cotton from the United States or China, which earns financial support from their governments. Moreover, with the same area, growing corn can yield a profit twice that of growing cotton, An said.
The CEO of Vinatex also said that the establishment of trading centers for apparel materials is one of the necessary steps to solve difficulties for Vietnam’s textile industry this time. He gave praise to Saigon Textile 2 Join Stock Company for its pioneering deed in establishing the apparel material center named Sanding Tam in Ho Chi Minh City’s Tan Binh district.
Meanwhile, the plan to set up a materials trading center of Vinatex is still on paper because of some obstacles from land problem.
In 2007, Vietnam’s textile and garment industry expanded by 23 per cent on-year, while export of garments grew 30 per cent to US$7.75 billion. (Saigon Times Daily)
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