Textile and Garment Industry Development: Part 1: Exciting Projects

Never before has the textile and garment sector received such a great deal of investment attention as it does today. In many localities, in addition to the businesses that have already started operating, there are still many investors who continue to research and promote investment. A new picture with many bright colors is gradually emerging in Nghe An's textile and garment industry.

We were present at the Nam Giang Industrial Park (IC) in Nam Dan District - the province's largest textile cluster located right next to National Highway 46 on a day in mid-August. On the large plot of land, the factory, warehouse, housing... items of Haivina Kim Lien Company have been basically completed. The company is speeding up the installation of machinery systems. Mr. Nguyen Van Hai - in charge of construction said: The project started in December 2010, the plan was to complete 3 factories, install machinery and test run the production line by August 2011, but it was not implemented. Compared to the plan, the project is about 2 months behind schedule.

The textile project of Haivina - Kim Lien Company Limited has a total investment of 5 million USD, a capacity of 3.5 million pairs of sports gloves, industrial gloves/year, employing 4,000 workers; 100% of the enterprise's own capital, built on an area of ​​4,500m2. Currently, the Company has recruited about 1,000 workers to learn, familiarize themselves with the production line and control product quality. 4 containers of sewing machines and 2 containers of cutting machines have also been transferred to the factory warehouse.

Located next to Haivina Kim Lien is another large-scale project that is expected to create jobs for many workers of Hanosimex Corporation with a total investment of more than 1,300 billion VND, attracting more than 2,000 local workers and those from neighboring districts... Currently, the contractor is leveling the ground.

Being the third largest province in the country, with a population of nearly 3 million people, of which more than 1.7 million are of working age, accounting for 56% of the province's total population; at the same time, the province is located in the center of the North Central region and the key economic region of the Central region, convenient for transporting raw materials, distributing and circulating goods and exporting textiles to other countries.

These advantages have been attracting investors to Nghe An in the textile and garment sector recently. In addition to some old units such as Hoang Thi Loan Textile and Garment Joint Stock Company; Phu Vinh Company Limited; X20 Garment Factory of Lam Hong Garment Company (Military Region IV), Minh Anh - Kim Lien Garment Joint Stock Company (taken over from Nghe An Garment Joint Stock Company) in Bac Vinh Industrial Park, recently there has been the participation of Khai Hoan Embroidery Garment Company Limited with an investment of 40 billion VND which has come into operation, along with many projects that have been granted investment licenses as well as in the process of research.

If before the first half of 2010, Nghe An had no FDI enterprises investing in the textile and garment industry, by the end of 2010, there were 2 FDI enterprises with 100% Korean capital granted investment certificates in Nghe An. Those are the HaiVina Kim Lien Industrial Garment Factory Project at Nam Giang Industrial Park (Nam Dan), the Prex Vinh Company's Leather and Textile Products Factory Project built at Lac Son Industrial Park (Do Luong), with a total investment of 11.6 million USD, a capacity of 3 million products/year, including textile products, swimwear, leather products and clothing logos, expected to employ 4,500 workers. Currently, the project is being cleared and leveled to prepare for investment.

In addition, there are a number of investors looking for opportunities in the province such as Lan Lan Company Limited (Japan) investing in Yen Thanh Town Industrial Park, and Seoha Brand Networks Inc (Korea) in Dien Thap Industrial Park (Dien Chau).

In order to develop the textile industry in the context of the global economy facing many difficulties and fierce competition, in recent years, Nghe An province has had many policies to encourage domestic, foreign and foreign enterprises to invest in this field. In addition to investment incentives from the Government, Nghe An province also has many supports such as projects employing over 300 workers enjoying preferential policies and investment support from the province according to the provisions of Decision 79/2009/QD-UBND of the Provincial People's Committee on amending and supplementing a number of preferential policies and investment support in Nghe An; Policy to support investment in building infrastructure for industrial parks; Supported for detailed construction planning items, site clearance compensation, construction of technical infrastructure inside and outside the fence (roads, electricity) according to regulations in Decision No. 83/2009/QD-UBND on promulgating regulations on policies to support investment in construction of infrastructure for small industrial parks in Nghe An province.

However, in reality, the textile industry has not brought in a large amount of foreign currency for the province, in 2008, it was 4.4 million USD, but in 2009, the financial crisis and global economic recession had a huge impact on the export market of Nghe An textile enterprises, in 2010 the export value only reached 3.1 million USD. In the first 4 months of 2011 alone, the export value reached 1.8 million USD, a slight increase compared to the same period in 2010.

According to the assessment of the Department of Planning and Investment, Nghe An province's garment products are mainly made to order, the inspection and production supervision stages are still manual. Enterprises do not have a clear product strategy, have few varieties, low output and export value, reaching about 3 million USD annually, mainly focusing on the products of 3 enterprises: Hoang Thi Loan Textile Joint Stock Company, Nghe An Textile Company, and Phu Vinh Company Limited with main products being scarves, shirts, jackets, children's T-shirts and clothes for primary and secondary school students...

Textile and garment has not become a key economic sector of the province, does not employ much labor, and accounts for a low proportion in the entire industry (the proportion of the textile and garment industry compared to the entire industry accounts for 3.65 - 6.62%). And behind the investment story is the issue of solving arising problems...

(To be continued)

Thu Huyen