The disruptions in China’s supply chains due to the COVID-19 pandemic prompted many Vietnamese enterprises to invest in production of textile materials to satisfy local and export demand. As per reports, in March, Song Hong Garment and Textile Company kicked off construction of its factory in Nghia Phong Commune in Nam Dinh with 40 sewing and weaving production lines in 75,000 sq mt with investment totaling VND600 billion ($ 26,034,523). The factory, scheduled to be operational in November, is expected to help increase the company’s revenue to VND5 .5 trillion. Prior to this, Trung Quy started operations at its weaving and dyeing facility with annual production capacity of about 2 million meters in Hai Son Industrial Park in the Mekong Delta Province of Long An.

Simultaneously, Nghe Tinh Textile Company got the greenlight to operate a OE yarn manufacturing facility to meet demand of the textile industry producing 18,720 tonne of thread yarn per year. The VND600 billion plant was built in Nam Hong Industrial Park in the Central Province of Ha Tinh’s Hong Linh Town.

In addition to locally-invested factories, Vietnam has also completed Foreign Direct Investment-invested fabric projects including Hong Kong Texhong Textile knitting plant in Texhong Hai Ha Industrial Park in the Northern Province of Quang Ninh with the total investment of $214 million.

According to the Vietnam Textile and Apparel Association (Vitas), in 2020, the Vietnamese textile and garment sector achieved revenue of $35 billion; yet, it spent nearly $20 billion on imported materials including $12 billion on fabrics. Therefore, newly-built factories both help Vietnam to enjoy FTA’s preferential tariff and create more employment for local laborers.

Vu Duc Giang, Chairman, Vitas, said, these newly-built factories have been reducing the shortage of material; however, he noted that enterprises should well study rules and road map for tariff cuts on many goods to most take advantage of FTA.