In seven months of year 2015, the Garment sector ranks the second in attracting capital and foreign direct investment (FDI) with more than $1.12 billion, equivalent to 20% of total capital.
According to the Foreign Investment Agency, Ministry of Planning and Investment, in total capital of $5.85 billion invested in seven months of year 2015, the garment accounts for more than $1 billion with three major projects. The first project is fiber manufacturing factory project of Turkish investor, which was built in Dong Nai Province with total investment capital up to $660million, highest ever.
The next is project of producing industrial products to support the garment sector invested in Binh Duong with investment capital of $274 million of Polytex Far Eastern Ltd. Company (Taiwan). The last is project of Lu Thai –colored fiber plant with total investment of $160.8 million of Hong Kong investor in Tay Ninh province.
The opportunities and strengths of this sector have been increasing leading to Vietnam’s garment sector attracted more capital from FDI investment in recent years.
Vietnam is engaged in duty free playground with many countries in the world, in which there are 8 free trade agreements with most major countries such as USA, Japan, Korea, EU.. These are main garment export markets of Vietnam.
According to the Department of Trade Promotion and Ministry of Industry and Trade, export turnover of Vietnam’s garment to the EU without Free Trade Agreement (FTA) gained only about $300 million/year. However, since Vietnam-EU Free Trade Agreement takes effect, export turnover will grow about 50% in the first year and 20% in subsequent years.
Furthermore, if Trans-Pacific Strategic Economic Partnership Agreement (TPP) is adopted, Vietnam garment’s products exporting to US and EU will be deducted to 0% tax that leads to greater competitive advantage.
In general, with number of advantages gained from the Free Trade Agreements, Vietnam is becoming a potential ground for foreign garment companies investing to.
Source: http://news.chinhphu.vn/