Composite Fabric,bonded fabric,Lamination Fabric Lamination Fabric News Vietnam is expected to join the TPP and listed textile companies will increase investment in Vietnam

Vietnam is expected to join the TPP and listed textile companies will increase investment in Vietnam



There are signs that as domestic labor costs continue to rise and Vietnam is expected to join the Trans-Pacific Strategic Economic Partnership Agreement (TPP), more and more Chinese textile companies are increa…

There are signs that as domestic labor costs continue to rise and Vietnam is expected to join the Trans-Pacific Strategic Economic Partnership Agreement (TPP), more and more Chinese textile companies are increasing investment in Vietnam to avoid potential trade barriers. .
On Thursday evening, Jiansheng Group, which is mainly engaged in the production and sales of cotton socks, announced that it will increase its investment in its subsidiary Hong Kong Taiho International Co., Ltd. by US$75 million, and Taiho International Co., Ltd. will invest in the establishment of a wholly-owned subsidiary in Hai Duong Province, Vietnam. To produce and sell socks and upstream raw materials.
Jiansheng Group has previously invested in Vietnam, but as of the end of 2014, the investment had not yet generated profits. According to the company’s prospectus, Jiansheng Group invested US$14 million in March 2014 to build a “mid-to-high-end cotton socks production line project with an annual output of 36 million pairs” in the Singapore Industrial Park in Haiphong, Vietnam.
The company’s 2014 annual report shows that the first phase of Jiansheng Vietnam’s project has entered the equipment installation and commissioning stage, and trial production began in March this year. The second phase of civil engineering is expected to be completed in September this year.
Continuing to increase investment in a new country when investment projects have not yet generated profits means that investors are extremely optimistic about the development prospects of the region. In the announcement, Jiansheng Group stated that this increased investment in Vietnam can make full use of the advantages of Vietnamese factories in taxation, labor and customer import tariffs, and further enhance the competitiveness of the company’s products in the international market.
Since its main products are mainly exported, tariff concessions are quite attractive to Jiansheng Group. Jiansheng Group’s main products are currently mainly sold to Japan, Europe and Oceania markets. In recent years, the company’s export revenue has accounted for more than 85% of its main business revenue. The products produced by the company’s newly established Vietnam factory in 2014 are well received. Favored by customers in the US market.
Currently, Japan imposes a 7% tariff on textile imports from China, while imports from Vietnam are exempt from tariffs. At present, Vietnam is planning to join the Trans-Pacific Strategic Economic Partnership (TPP). Once it successfully joins, the United States will also be exempt from tariffs on textiles imported from Vietnam.
TPP, also known as “Economic NATO”, was initiated by New Zealand, Singapore, Chile and Brunei among the members of the Asia-Pacific Economic Cooperation Conference. It aims to promote trade liberalization in the Asia-Pacific region. The United States joined in 2008 and Japan joined the TTP in 2011. Negotiations, South Korea also joined the TPP negotiations in 2013, but China is not a member of the TPP.
According to the Wall Street Journal, U.S. trade negotiators will require Vietnam, a major clothing exporter, to reduce its dependence on Chinese textiles in exchange for preferential U.S. market access. China is the world’s largest textile producer and exporter, with a complete industrial chain. Although Vietnam is a major textile exporter, its industrial chain is not complete, and raw materials mainly come from China.
Lu Thai A is also interested in the preferential tariffs in the Vietnamese market. In March this year, Lu Thai A announced that its wholly-owned subsidiary Lu Thai (Hong Kong) Co., Ltd. planned to invest in establishing “Lu Thai (Vietnam) Co., Ltd.” in Vietnam, investing in the construction of 60,000 spindles of spinning and an annual output of 30 million meters of yarn-dyed fabrics. Production line project, with a total investment of US$150 million.
Lu Thai A said that investing in Vietnam can effectively avoid the impact of potential trade barriers and enhance the company’s international production scale. As an old textile company, Lutai A’s main income also comes from exports. The main export areas are Southeast Asia, Europe, the United States, Japan, South Korea and Hong Kong, China.
According to incomplete statistics from Panorama.com, among the current listed companies in the textile industry, in addition to the above two companies, Huafu Colored Textile, Blum Oriental, Lugang Technology, etc. have invested in building factories in Vietnam.
Blum Oriental stated in its 2014 annual report that in 2015 the company will continue to increase investment in Blum Vietnam and build the third phase of the Blum Vietnam project. After the capital increase, the registered capital of Blum Vietnam will be US$100 million, and the total investment will be US$300 million. After the second phase of Blum Vietnam is completed and put into operation, the total production capacity of Blum Vietnam accounts for approximately 30% of the company’s total production capacity.

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Author: clsrich

 
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