Vietnam'S Labor Costs Are Cheap, The Cost Of Clothing And Raw Materials Is High.

After the announcement of the signing of the p Pacific Partnership Agreement and the free trade agreement with the European Union and the Republic of Korea, many textile and garment investors want to take advantage of the benefits they bring.

Set up factories related to garment industry and make full use of the cheap labor force in Vietnam.

But investors say that the cost of investing in these garment production related projects, especially the cost of investing in raw material production projects, is extremely expensive.

According to the October 31st report, Vietnam's local clothing accounts for Vietnam.

The target of the Vietnamese authorities is to vigorously develop the local clothing industry and increase the proportion to 80% by 2020. The proportion is 45%.

However, only a small number of Vietnamese enterprises can carry out closed production on a full scale and independently complete all production processes from weaving to dyeing to finished garments and the last trimming ingredients.

In fact, Vietnam's local garment enterprises can independently handle all production stages.

Because many enterprises in Vietnam are small and medium-sized enterprises, which lack sufficient financial resources.

Investment

It costs much more than investing in garment factories.

An average of $2000-3000 million is needed to start a dyed textile mill, while the opening of a garment factory is only $6-11 million, and the cost of investment is quite different.

In terms of raw materials supply, Vietnamese farmers do not like to grow cotton, because without the support of Vietnamese authorities, it is difficult for local farmers to make profits from planting cotton.

Therefore, local cotton production efficiency is low, production is also low, and the price and imported cotton ratio is also less competitive.

Vietnam's local name is Thanh Cong Textile and Garment JSC, the chief executive of the enterprise Phan Thi Hue complained that although the company can carry out full line closed production, it still needs to import about 10% raw materials from Indonesia.

Vinatext, Vietnam's biggest textile and garment producer, said the biggest challenge facing Vietnamese enterprises is investment, technology, labor and consumption.

The higher cost of investment in garment raw material production plants is due in part to the high cost of building sewage treatment systems.

The high investment cost has made investors very cautious.

Because of the high cost of dyeing and weaving fabrics, it is difficult to run dyed weaving factories.

In addition, some Vietnamese provinces do not welcome the construction of textile and garment factories due to concerns about environmental pollution.

For example, some investors proposed the dyeing and weaving factory construction project was rejected by the Vietnamese local government, because investors can only build a sewage treatment level of B sewage treatment system, the factory disposed of water quality level of B discharge water can only be used to grow vegetables and fish, can not drink.

The Vietnamese authorities demand that the sewage treatment system must reach the level a and investors can not meet this requirement, so the project is rejected by the authorities.

Investment plans can only end in abortion.