High-tech garment groups keen to expand
High-tech garment groups keen to expand
Vietnam has become a top destination for foreign investors in the high-tech garment and textile industry, contributing to restructuring the global value chain.
In mid-July, TOP Textile JSC, a subsidiary of Pacific Textile Group, held an inauguration ceremony for its $203 million factory in the northern province of Nam Dinh. The factory has completed phase one, with a capacity of 60 million metres of fabric per year, four times the combined capacity of the rest of the textile and dyeing factories in the province. The project’s second phase is expected to be completed next year, doubling the factory’s annual capacity.
The factory’s entire output is destined for the export market, highlighting the appeal of Nam Dinh to entice secondary investors to invest in Aurora Industrial Park (IP) as the province grows into its role as a garments and textiles hub for the country.
To meet strict requirements on green standards, Aurora IP invested in high-tech infrastructure machines and a wastewater treatment system with the second-largest capacity in Vietnam and a clean water treatment system. The IP also provides full housing and accommodation facilities for workers. In addition, it includes entertainment and welfare needs such as supermarkets, kindergartens, medical facilities, labour support, and a consulting centre.
The demand from foreign investors to look for green IPs for high-tech garments and textiles projects is increasing as several global fashion companies, including Zara, H&M, Gucci, Saint Laurent, Balenciaga, and Tommy Hilfiger, have agreed to contribute to the Global Fashion Agenda agreement, which emphasises the use of environmentally friendly, traceable, and sustainable materials.
“Our clients, including TOP Textile and Jehong Textile, even registered to rent land in Aurora IP before construction began,” said Tran Quoc Viet, general director of Cat Tuong Group.
TOP Textile’s products are largely provided for its partner, Toray Industries Inc., which purchased stakes from Pacific Textile Group.
Kutsuzawa Toru, senior vice president overseeing fibre and garments at Toray Industries Inc. said Toray is currently one of the top groups in terms of advanced materials, combining carbon fibre for aviation and water filters to convert seawater to drinking water.
“We are expanding our operations globally. We have had a close relationship with Pacific Textiles for several years to expand the closed production process for knitting, dyeing, and finishing, using advanced materials from Toray for global brands such as Uniqlo and clothing groups in the United States and the EU,” Toru said.
According to TOP Textile, its new factory is committed to environmental protection. The factory’s wastewater treatment facility meets standard A, the strictest level in Vietnam, and its gas emission treatment system is designed to exceed Vietnamese industrial emission standards.
Along with Toray and Pacific Textile, Hyosung Core Materials is constructing a $550 million project to produce carbon fibre at Phu My 2 IP in the southern province of Ba Ria-Vung Tau, set to become operational next year. The project was licensed in October 2023.
In March, Hyosung TNC received approval for a project worth $730 million from Ba Ria-Vung Tau People’s Committee to build the largest bio-spandex factory in Vietnam. According to the plan, the factory will produce bio-butanediol (bio-BDO), which is manufactured by fermenting sugars derived from sugarcane, replacing traditional fossil raw materials such as coal by 100 per cent. With this investment, Hyosung TNC has secured the largest bio-spandex factory in Vietnam. Notably, it is the first in the world to establish a vertically integrated production system for bio-spandex, from raw material to fibre.
Hyosung TNC is working with Ba Ria-Vung Tau authorities to complete the necessary technology dossiers and relevant procedures. The company aims to fast-track its project and begin the production and selling of bio-BDO with an annual capacity of 50,000 tonnes in the first half of 2026. In the second phase, the company will aim to quadruple capacity.
Hyosung Core Materials and Hyosung TNC are subsidiaries of South Korean giant Hyosung Corporation, which has invested nearly $5.1 billion in Vietnam with eight companies and one branch.
The American developer of spider silk-based yarn, Kraig Biocraft Laboratories Inc., has also chosen Vietnam to scale up its spider silk commercialisation efforts. Additionally, German-based embroidery producer Amann Group is expanding its network to Vietnam.
Vietnam is home to around 3,500 foreign-invested garments and textiles projects worth $37 billion, boosting the sector’s production capacity and making a significant contribution to export turnover, according to the Vietnam Textile and Apparel Association (VITAS).
“Greening in the industry is a must-follow path for manufacturers. In 2024, along with the forecasted economic fluctuations, the industry will also face difficulties in applying the extended producer responsibility and the EU’s Carbon Border Adjustment Mechanism as well as the conversion from sustainable fashion strategy to fast fashion,” said Vu Duc Giang, chairman of VITAS.
In Europe, importers are focusing on environmental, social, and governance indicators. Thus, garment and apparel products are required to be made from cotton or polyester fibres mixed with recycled fibres made from natural products, waste products, or surplus textile products, Giang added.
To welcome foreign investors in garments and textiles, Vietnam has developed specific IPs focusing on attracting the textile-supporting industry, located in the provinces of Hung Yen, Nam Dinh, Binh Duong, Dong Nai, and Tay Ninh.
