Domestic textile sector urged to increase localization rate

by VTV421 October 2015 Last updated at 09:17 AM

VTV.vn - The domestic textile sector is believed to benefit most once the TPP is ratified. However, to benefit from the TPP, the sector’s localization rate must increase.

Hue is a leading region in the country when it comes to establishing a close supply chain from material hubs to final products. Vietnam is on the verge of meeting its target of 50 billion USD in trade turnover by 2020.

This is the storage of Vietnam Textile Association. All of the materials from garment to buttons are all imported from China and Taiwan.

"Currently Vietnam’s localization rate is only 40%. The other 60% are raw materials imported from China and Taiwan. Once the TPP is signed, countries will invest more in Vietnam to control these materials. This will help raise Vietnam’s  localization rate", said Nguyen Thanh Ty, Managing Director, Huegatex.

"Vietnam will enjoy a 0% tax from TPP countries. These countries account for 17% of the global market share. Remember that big countries like India, Bangladesh, and China are not in the TPP. Vietnamese consumers will benefit a lot" said Nguyen Dinh Thien, Director, Vietnam Institute of Economics.

"The supply chain has been established in Hue. In other words, Hue can supply fiber and woven materials for production in the local textile sector. This is good news because we will be able to meet the requirements of both the TPP and FTA with the EU", said Le Tien Truong, Director, Vinatex.

According to Vinatex, Vietnam will need 8-to-10 hubs to serve as materials centers. Therefore, investment in building materials hubs will be the trend in the coming time.

Hue authorities must try to attract more investors and establish new industrial zones. Investment in industrial zones is long-term, since they can cut production costs and enhance supply chain management.

Recently, Hue authorities received a delegation from India to discuss investment opportunities. This event shows the interest of foreign investors in establishing materials hubs in Vietnam.

 

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