Korean investment grows in textile and garment sector
Korean investment grows in textile and garment sector
Korean investors are showing greater interest in Vietnam’s textile and garment sector.
In early June, a big fibre manufacturing plant was launched in the southern province of Dong Nai, marking a growing presence of Korean investment in Vietnam’s textile and garment sector.
The $52 million project, belonging to Dong-IL Vietnam Limited under the Dong-IL group, is located in Dong Nai’s Loc An-Binh Son Industrial Park and is Dong-IL’s first project in the country.
The plant has an estimated capacity of 9,000 tonnes per year and will come on-line mid next year to supply the domestic market, as well as other Asian markets.
Dong-IL Vietnam’s managing director Suh Min Sok said he expects the project to help attract other Korean investors to the Vietnamese market.
Unlike Dong-IL, Sea-A group has been operating in Vietnam for nearly six years and has a garment plant based in the north-central province of Thanh Hoa. It is run by Winners Vina Limited, a unit under Sea-A.
The $12 million facility turns out seven million products a year and has a workforce of 3,000.
Winners Vina is already envisaging a second garment plant in Vietnam, in which it will invest $15 million and employ 6,000. Its products will primarily be for export.
“The move is to satisfy growing orders from US importers, mostly leading retailers such as Target, Walmart, Kohls, Kmart, Sears and Tesco,” said a company source.
With more than 500 businesses based in Vietnam and nearly $2 billion in total committed capital, Korean investment has helped bolster Vietnam’s textile and garment industry, and in particular helped increase export value to Korea, which is now Vietnam’s fourth largest export partner in terms of value, after the US, the EU and Japan.
Vietnam’s textile and garment exports to Korea have jumped sharply in recent years, from less than $300 million in 2009 to nearly $1.2 billion in 2013 and an estimated $750 million in the first five months of this year.
This has given Vietnam’s textile and garments a 24.2 per cent market share in Korea, only behind China with 43.2 per cent.
The Korean firms who led exports to their home country in April-May 2014, based on Vietnam’s General Department of Customs statistics, included Unico Global Vietnam, PS Vina, Daesung Vina, Sung Woo Vina, Shinsung Vina, and I&Y Vina.
The fifth negotiation round for the Vietnam-Korea free trade agreement (FTA) was wrapped up in late May and both sides have reportedly ramped up efforts to conclude the talks by October this year.
The Vietnam Textile and Apparel Association forecasted Korean investment in Vietnam could make a major leap following ratification of the FTA.
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