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Vietnam players eye textile industry development in Xinjiang |
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2016-8-29
Currently, around 53% of fiber and yarn produced in Vietnam was exported to China, and excessive capacity may appear in Vietnam as China’s demand may reduce in the following years.
According to Vietnam Customs, fiber and yarn produced in Vietnam was sold to 18 nations in 2016, with value staying at $1.3 billion, and exports to China accounted for $0.721 billion, up 20% on the year. MR. NGUYEN VAN TUAN, chairman of Vietnam Cotton & Spinning Association expressed that textile industry in China has altered greatly but companies in Vietnam still rely much on China market. China government released many policies to promote the development of textile in Xinjiang, and yarn capacity may exceed 20 million spindles by 2018 in Xinjiang, three times larger than Vietnam's scale of production. Therefore, China’s demand for cotton yarn may reduce sharply at that time.
Xinjiang textile and apparel industry enjoys many preferential policies in view of capital, tax, electricity price, freight, cotton consumption, training, social security, the treatment of waste water in printing and dyeing and finance support and so on, and the production operation cost of companies in Xinjiang can be saved more than 10% than that in other regions in China. Besides possible reducing share in China, Vietnam companies also face pressure from Turkey, which was the second largest export market for Vietnam, as Vietnam-origin cotton blended yarn and polyester fiber will be levied around 30% of anti-dump tax in Turkey. Cotton yarn from Vietnam enjoys duty-free advantage compared with cotton yarn from India and Pakistan, which will be levied by 3.5% of tariff, but price of Vietnamese cotton yarn kept falling recently.
Official from Vietnam Import and Export Agency said, although exports of textiles faced challenges in Vietnam, local companies in Vietnam also encountered huge development potential, especially after the Yarn-forward rule taken into effect. Now, Vietnam only keeps some yarn for local consumption which can produce around 2.8 billion meters of fabrics, while demand for fabric is supposed to be around 6.5 billion meters and possesses huge upward potential. From simple processing to cover feedstock, production and self-design is a development trend for textile industry in Vietnam. It is known that some companies in Vietnam have turned to focus on local market or develop weaving sector to avoid depending too much on export.
The CEO of Vinatex stated that the target of Vinatex is to realize 12% of export growth rate annually, and make local revenue grow by 15-20%. Besides, Vinatex will be engaged in adjusting product structure by 2020, reducing processing share to 20% from 60% and increasing the proportion of production design from 2% to 20%.
Source:CCF
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