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Supporting for the textile and garment industry: Still waiting for policy

27/10/2021 03:25 PM
The textile and garment industry is "waiting" for the development strategy of the textile, garment and footwear industry to 2030, with a vision to 2035 to consider the benefits when investing in the production of supporting industry products.

According to data from Vietnam Textile and Apparel Association (VITAS), the total import turnover of textile raw materials and accessories in the first nine months of the year reached US$18.05 billion, of which imported fabrics were US$10.51 billion; cotton 2.42 billion USD; all kinds of fibers USD 1.95 billion... These figures reflect the large supply-demand gap in raw materials and auxiliary materials for production, and also reflect the relatively low development level of supporting industry in the textile and garment industry.

Depending on the supply of imported raw materials and accessories, in addition to making it difficult for enterprises to meet orders in a timely manner, is also an obstacle to meet the requirements of new free trade agreements. Ms. Tran Thu Huong - representative of the Department of Industry (Ministry of Industry and Trade) shared..

In fact, the development of supporting industry as well as the development of the upstream stage is a matter that has been mentioned a lot recently, especially when new-generation free trade agreements require stricter rules. Domestic textile enterprises themselves are fully capable of accessing modern textile and dyeing technologies. According to Mr. Vuong Duc Anh - Chief of Office of the Board of Directors of Vietnam National Textile and Garment Group (Vinatex), the problem here is efficiency strategy. Investment capital for production of raw materials is very large, if there is no output, enterprises cannot and do not dare to invest.

"When investing in raw materials, it is necessary to determine whether the enterprise can enter the supply chain because it is impossible to get competitive prices when standing alone," said Mr. Vuong Duc Anh, at the same time analyzing: In the production stage from fiber, yarn, to dyeing, if the nterprises calculate from 5-7% of the profit that the final product generates, and bear up to 15-20% of the profit, they cannot compete.

Another problem that makes the supporting industry as well as the production of raw materials of the textile and garment industry develop slowly is they are not welcome by the locals. According to the Institute for Strategic and Policy Research (Ministry of Industry and Trade), nearly four years ago, there were no new investment projects in the textile and dyeing sector. The reason is due to local concerns about environmental problems.

Developing supporting industry to create a foundation for the textile industry to grow sustainably is a problem that has been raised for many years. Enterprises in the industry themselves are looking forward to policies with strong enough incentives, creating motivations for investment.

According to Mr. Vu Duc Giang – Chairman of VITAS, the developing policy for the textile and garment industry should ensure the following issues: Industrial areas focusing on the production of raw materials must have convenient roads, and at the same time be associated with the port system, creating chain links in textile dyeing associated with garment factories in the region, thereby reducing transportation costs and product costs; There should be a financial mechanism and tax incentives for businesses to invest in waste treatment systems. In the policy, especially the development strategy, it is also necessary to define the key regions and localities in the planning of industrial parks and waste treatment plants to call for secondary investors to invest in supply shortage…


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