Vietnam need to be cautious over licensing FDI textile, dyeing projects

As per the Foreign Investment Agency report, so far this year out of the $11 billion worth of foreign direct investment (FDI) poured into Vietnam; $3.5 billion went to textile and garment projects due to the Trans Pacific Partnership Agreement (TPP). The investments in the textile and garment industry have been increasing so sharply that this has raised concern.

The Ministry of Planning and Investment (MPI) has asked local authorities to examine projects thoroughly before licensing to be sure that the projects can satisfy the requirements on the occupancy rate in industrial zones, and the technological and environmental standards.

MPI has warned against the increase of textile and garment complexes, which could be a threat to the environment. It has also warned about the capability of providing accommodations to workers, and the import of outdated energy consuming technologies.

Most recently, the Dong Nai provincial authorities granted an investment license to a textile & garment project registered by Turkish Hyosung Company, the largest project in the field so far, capitalized at $660 million.

In June 2015, the Binh Duong provincial authorities granted license to Polytex Far Eastern, allowing the Taiwanese investor to set up a $274 million textile factory covering an area of 99 hectares in the province.

Cheng Chen Yu, president of Polytex Far Eastern, highly appreciating the investment potential in Vietnam, said the company plans to expand a factory in the second investment stage with estimated capital of $1 billion.

A $300 million project has just been licensed in HCM City. The investor is a Hong Kong-based Worldon Vietnam.

The Chinese Texhong Group registered a $215 million project. Hong Kong based TAL Group registered to develop a $600 million textile and garment complex in Dai An Industrial Zone in Hai Duong province, while Chinese Yulun plans to set up a $68 million.

Minister of Science and Technology Nguyen Quan confirmed that his ministry has received much information about foreign investors, especially Chinese, intending to pour huge capital into textile and dyeing projects in Vietnam. According to him, the state management agencies need to be cautious when considering the projects, especially in terms of technology and environment.