Many large foreign firms have entered Vietnam's garment and textile sector with an eye on export opportunities the Trans-Pacific Partnership is expected to bring.
Jiangsu Yulun Textile Group of China recently got a license for a US$68-million textile, dyeing, and yarn plant in an industrial zone in Nam Dinh Province near Hanoi, Thoi bao Kinh te Saigon Online reported.
Industrial zone managers said the factory would go on stream in the middle of 2016 and produce 9,816 tons of yarn and 21.6 million meters of cloth and dye 24 million meters of both a year.
Nam Dinh authorities said a Hong Kong investor also wants to build a garment and textile industrial zone on 1,000 hectares in the province.
In Ho Chi Minh City, Forever Glorious Company belonging to Taiwanese corporation Sheico has committed a $50-million investment to produce clothing and accessories for water sports. The factory is said to need 3,550 workers.
Gain Lucky Limited belonging to China-based Shenzhou International, who makes garments for Nike, Adidas, and Puma, also announced plans to invest $140 million in the city to build a 45-hectare center for designing and producing high-end products.
The TPP, which has entered the final stretch of negotiations, will lower import taxes in many large member economies like the US, Canada, Australia, and Japan. China is not a member.
Import tariffs in the US, the biggest buyers of Vietnam’s leading export, textiles, will be cut from 17-32 percent now to zero.
But it will also imposes many conditions -- for instance, apparel has to be made using yarn and other materials produced in member countries to benefit from the tax breaks.
Vietnamese garment manufacturers are not financially strong enough to invest in their own yarn and textile facilities, and rely on China and other Southeast Asian countries for most of the feedstock.
Economists have said that therefore the trade deal would benefit foreign firms coming here more than local ones.
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