Due to the COVID-19 pandemic resulting in a fall in demand for textiles and garments, Vietnamese enterprises have invested in improving production capacity, completing the supply chain, and taking advantage of new-generation free trade agreements (FTAs) like the European Union-Vietnam Free Trade Agreement (EVFTA) and the United Kingdom-Vietnam FTA.
Recently the Century Synthetic Fiber Corporation (CSF) approved a $120-million investment plan for the Unitex synthetic fiber factory project in the Tay Ninh province.
With a capacity of 60,000 tons, the project focuses on recycled yarn and high-quality fiber. Also, CSF will become the second-largest fiber producer in the country once the factory becomes operational, with a total capacity of 120,000 tons per year.
The Viet Tien Garment Corporation also plans to invest $13 million this year in several projects. That includes $4.3 million in setting up the Viet Thai Tech Co. Ltd to secure raw material resources.
Similarly, Thanh Cong Textile Garments Investment Trading Joint Stock Company (TCM) has announced to start construction work on its Bin Long 2 factory this year.
Meanwhile, a news agency report said the factory could produce 9 million items a year with an investment of $10 million.
On the other hand, according to TCM, investment in raw material production was essential to increase overall capacity. But with the new project, the revenue of this department is expected to increase by 22 percent in 2022 and 27 percent in 2023.
New investment projects, especially in the production of raw materials like yarn and fabric, will address the shortage of input materials in the industry.
At the same time, the production capacity of the enterprises will increase, and increasing the percentage of resources allocated to FTAs will result in more resources.
In addition, to facilitate tariff removal, the EVFTA will promote the formation of a closed production chain, increase the added value for the industry and gradually reduce reliance on raw material imports.