Local textile firms short of funding
Local textile firms short of funding
Lack of capital was the biggest problem for domestic textile companies trying to expand production, said Le Tien Truong, general director of Viet Nam National Textile and Garment Group (Vinatex).
Vinatex, the largest textile and garment producer in the sector with nearly 100 member companies and contributing about 15 per cent of annual export value, has little capital compared to FDI companies. Thus, while foreign companies had expanded production of materials, domestic companies could not, Truong said.
He pointed out that big manufacturers owned by Vinatex such as Phong Phu Joint Stock Company, Viet Tien Company and May 10 Company had small amounts of equity with VND700 billion (US$33.3 million), VND200 billion ($9.5 million) and VND100 billion ($4.76 million) respectively,
Chinese Texthong Corporation spent $300 million building three factories in Quang Ninh and Dong Nai to produce one million yarn spindles each year, equal to 20 per cent of annual market production. Due to lack of capital, Vinatex-owned enterprises invested less in the completion stage, such as weaving and dyeing, Truong said.
Chairman of Hung Yen Garment Company's Board of Directors Nguyen Xuan Duong said that to help domestic businesses, the Government needed to attract FDI in the production stages.
Saying that free trade agreements created many opportunities, he urged Vietnamese companies to operate in the fields in which they had absolute advantages so they could earn more profits and make the best use of their capital.
