Itochu pays US$47mn to raise stake in Vinatex
Itochu pays US$47mn to raise stake in Vinatex
Itochu, Japan’s second-largest trading company, has spent some five billion yen (US$46.9 million) to buy an additional 10 per cent equity in Viet Nam National Textile and Garment Group (Vinatex).
This was reported by Nikkei.
The purchase has raised Itochu’s stake in Vinatex to 15 per cent, making it the second-largest stakeholder after the Ministry of Industry and Trade (which represents State capital in the garment group).
Earlier, Itochu had acquired roughly 5 per cent stake in Vinatex in its initial public offering in September 2014.
The decision to raise its stake in Vinatex reflects Itochu’s desire to make Viet Nam a textile export hub for the European market amidst rising labour costs in China, Nikkei reported.
Vinatex operates some 200 sewing factories in Viet Nam. It has invested nearly $200 million to develop facilities for thread and cloth production over the past three years. The company now handles almost everything from material production to sewing.
In 2017, Itochu and Vinatex agreed to sign a contract to develop a supply chain ranging from fibre and thread to cloth and retail.
Earlier in 2015, Itochu cooperated with Doximex, Vinatex’s subsidiary operating in dyeing and accessories. The deal is expected to boost the production of high-performance apparel in Viet Nam and export output to Japan, Europe and the United States.
The Japanese trading house may also collaborate with Vinatex to produce sportswear.
Itochu exports apparel from Viet Nam worth some 60 billion yen per year, half of which is produced by Vinatex. The company aims to raise outsourced production and exports to 100 billion yen by 2021.
This figure is based on the fact that Viet Nam has signed a free trade agreement with the European Union and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership with 10 other countries.
Vinatex’s shares are trading on the Unlisted Public Company Market at some VND15,000 (66 cents) per share.
