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Vietnam ready to receive South Korean investment in textile & garment sector

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A new investment wave is expected to hit Vietnam’s textile amp; garment industry in the time to come, triggered by the Vietnam-South Korea FTA.

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Vietnam’s textile and garment exports to South Korea have been growing very rapidly since 2015.

Textiles and garments received big benefits from the trade agreement, with 24 product categories enjoying preferential tariffs lower than the tariffs applied to other ASEAN countries.

An analyst, citing reports of the Ministry of Industry and Trade (MOIT), affirmed that exports of some products have been increasing steadily by 3-4 percent each year in the last three years.

Textiles & garments now account for 17.8 percent of Vietnam’s total exports to South Korea.

However, Vietnam’s textiles and garments only account for 30 percent of South Korean market share. This means there are still opportunities for Vietnam to boost exports to the market.

This, plus the CPTPP, of which Vietnam is a member, have prompted South Korea to invest in Vietnam and make products for export to South Korea.

The Korean Trade & Investment Promotion Agency (Kotra) has confirmed a South Korean investment wave heading for Vietnam. 

A survey of the agency found that Korean investors in China are considering moving to Vietnam. Investment is expected to become stronger in two or three years.

Meanwhile, Le An Hai, deputy director of the Asian & African Markets Department, reported that 62 percent of South Korean textile & garment companies in Vietnam plan to expand the production scale and make diverse products from fibre and cloth to finished garment products.

An analyst commented that there are still many problems that need to be solved. Many provinces have refused textile and dying projects for fear of pollution. In addition, the policy on encouraging investments into the textile and garment sector remains unattractive.

Hai said in order to receive the investment, the MOIT of Vietnam and the Ministry of Industry, Trade and Energy of the Republic of Korea have signed an agreement on cooperation in many fields, including textiles & garments. 

The two sides decided to join forces to build up the policies to encourage South Korean enterprises to make investment in the industry in the most effective way.

MOIT recommends South Korean enterprises prioritize investing in support industries, especially in textile and dying, affirming that Vietnam will create favorable conditions for South Korean investors to access land and labor, and fulfill procedures.

 

Source: VietNamNet

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