Vietnam will increase its cotton and fabric production to meet the high demands of garment exporters, said an official of Vietnam Cotton and Spinning Association (VCOSA) at the recently concluded 15th Vietnam International Textile & Garment Industry Exhibition, as per Vietnamese media reports.
Nguyen Hong Giang, general secretary of VCOSA, said that domestic garment exporters will need to make use of either locally produced cotton or import cotton produced by the member countries of the Trans-Pacific Partnership (TPP) in order to take advantage of the tax cuts while shipping products to TPP markets.
Vietnam will also have to follow the yarn-forward rule of origin, which requires all items required in manufacturing a garment to be made in one of the 12 nations party to the TPP.
To take into account the fabric forward rule of origin under the Free Trade Agreement (FTA) signed with EU, it also needs to boost its fabric production capacity. Vietnam’s domestic fabric production is about 3 billion square metres while its requirement is of 8.5 billion square metres.
Giang also pointed out that textiles and dyeing are the two main sectors that are holding-up the production. The country has received investments worth $ 3 billion in the areas of textile and dyeing in the last 18 months.
But for Vietnam to meet its demand for fabric and to follow the rules of the TPP and FTA with Vietnam, Giang said that incentive for business must be provided in the form of infrastructure, land in industrial parks, proper sewage treatment, and environment management capacity to attract investments. (HO)