World textile & garment (T&G) industry is greatly affected by economic conditions. After a decline in 2009 due to the global economic crisis, the textile & garment industry is on the rebound and expected to grow continuously at a rate of 6% in the coming years.

China, the United State,  Germany and Japan are the  four  largest apparel T&G markets. Large T&G market size in developing countries is mainly contributed by their large population. Expenditure per capita spent on garment shows disparity between the developed and developing countries.

Textile and garment industry is one of the leading sectors of Vietnam. According to the Vietnam Textile and Apparel Association, by the end of 2014, Vietnam had 5,214 textile & garment companies, a majority of them are in medium or small size. Workforce in T&G sector accounts for over 20% of employment in the industrial sector and nearly 5% of the total national workforce.

Vietnam is among the top 5 T&G exporters in the world with market share of 3.1% in 2014. The United States, EU, Japan, and Korea are our main export markets.

Currently, Vietnam mainly operates in sewing, which creates the lowest added value and exports processed clothes, thus the value added is very limited. Vietnam’s garment sector is still dependent on raw materials (70-80%) imported mainly from China, Taiwan and Korea.

Domestic T&G market is relatively small, only around USD 3 billion with the low expenditure on T&G per capita. Vietnamese companies face severe competition from foreign brands, counterfeits and illegally imported clothes. Domestic enterprises are yet to focus on skill and knowledge-intensive stages of production, for example: distributing, exporting, designing, and branding. Viet Tien, Nha Be, May 10,… are a few successful enterprises in brand building and marketing.

The Free Trade Agreement, especially VKFTA, EVFTA and TPP, can open up many export opportunities for T&G sector. Some optimistic forecasts state that Vietnam could strive to USD 50-55 billion by 2025.

The industry made up of SMEs with low financial strengths and competitiveness will face challenges in the open economy. However, in the long run the FTAs will drive the industry to move to higher stages in the value chain, deeply integrate into global economy.

1.                   Business environment 7
1.1 Macroeconomic situation 7

Figure 1. GDP growth rate by quarters

Figure 2. Vietnam’s GDP per capita 2010 – 2016E

Figure 3. Vietnam’s import value

Figure 4. Vietnam’s export value

Figure 5. Main export products to China, H1/2016

Figure 6. Main products imported from China, H1/2016

Figure 7. VND/CNY exchange rate

Figure 8. VND/USD exchange rate

Table 1. Oil refine projects currently built in VN

Figure 9. Vietnam’s retail sales

Table 2. Top retailers in Vietnam market

 
1.2 . Government Policies Relating to the industry 15
Table 3. Vietnam’s import tariff before and after WTO  
1.3 Foreign Trade Agreements 18
1.4 Trans-Pacific Partnership Agreement 22

Figure 10. Textile imports and exports among 12 TPP countries

Figure 11. Vietnam’s imports and exports with other 11 TPP countries in 2014

Figure 12. Main T&G import markets of the US in 2015

Figure 13. Average textile import tax of TPP countries

Table 4. Estimated effects of TPP on Vietnam’s T&G industry 2020

Figure 14. Vietnam’s yarn import by countries in 2014

Figure 15. Vietnam’s fabric import by countries in 2014

Table 5. Vietnam import from TPP in 2015

Table 6. Estimated effects of TPP on Vietnam’S T&G industry (with and without ROO) in 2020

Figure 16. Forecast of Vietnam’s textile import after TPP

Table 7. FDI in textile industry in 2014 and first 5 months of 2015

Figure 17. FDI structure in textile industry in 2014 – May 2015

Table 8. FDI projects in H1/2016

Figure 18. Impacts of TPP on textile export to the US

Figure 19. VINATEX’s investment structure in 2015

 
2.                   Industry overviews 41
2.1 Global Textile and Garment Industry 41
2.1.1 Global Textile and Garment Value Chain 41
2.1.2  Raw materials 45

Figure 20. World’s cotton price

Figure 21. MEG price movements

Figure 22. Price movement index of Synthetic fiber, raw materials and oil up to 4/2016

Figure 23. PTA price movements

Figure 24. World’s monthly cotton production

Figure 25. World’s monthly cotton consumption

Figure 26. Cotton yield by countries

Figure 27. Impact of China’s policies on cotton price

Figure 28.World’s cotton export 11/12-14/15

Figure 29.World’s cotton import 11/12-14/15

 
2.1.3 Spinning 52

Figure 30. Global yarn production and consumption

Figure 31. Fibers and oil price movement index up to 4/2016

Figure 32. Fiber applications of the world in 2014

Figure 33. World’s top 10 largest fibers exporters, 2015

Figure 34. World’s top 10 largest textiles importers 2015

 
2.1.4 Weaving, dyeing and finishing 56

Figure 35. Global yarn and fabric production index Q3/2013 – Q1/2016

Figure 36. World fabric trade in 2010-2014

 
2.1.5 Sewing 59

Figure 37. Global textile and apparel market size

Figure 38. Global Textile and Apparel trade

Figure 39. Top 10 largest apparel exporters, 2015

Figure 40. Top 10 largest apparel importers, 2015

Figure 41. Global T&A trade breakdown

Figure 42. Global apparel trade

Figure 43.  Apparel market size by countries

Figure 44. Spending on apparel per capita

Figure 45. Average wage in textile sector 2014

Figure 46. Minimum wage 2016

 
2.1.6 Distribution and export 66

Figure 48. World’s apparel retail revenue 2014-2019

 
2.1.7 Textile Machine Industry 68

Figure 49. 10 biggest textile machinery importers

Figure 50. 10 biggest textile machinery exporters

Table 9. World’s largest textile machinery manufacturers

 
2.2 Vietnam’s Textile and Garment Industry 71
2.2.1 Overview 76

Table 10. General Information of Vietnam’s T&G industry

Table 11. Textile and garment enterprises of Vietnam

Figure 51. Geographical distribution of textile businesses

 
2. 2.2. Raw materials 76

Figure 52. Vietnam cotton production and crop area

Figure 53. Cotton area in some major regions

Table 12. Vietnam’s cotton area

Figure 54. Vietnam’s cotton consumption 10/11-14/15

Figure 55. Vietnam’s cotton import, 2010 – H1/2016

Figure 56. Average cotton import price

Figure 57. Vietnam cotton import by countries in H1 2016

 
2. 2.3. Spinning 78

Figure 58. Fiber production in 2010-2014

Figure 59. Fiber consumption volume and value in 2010-2014

Figure 60. Vietnam fiber and yarn exports

Figure 61. Yarn and fiber export value by countries H1/2016

Figure 62. Number of spindles, rotors of Vietnam

Figure 63. Vietnam’s synthetic fibers companies

Table. 13. Some spinning projects in Vietnam, 2014 – 2016

 
2. 2.4. Weaving, dying and finishing 87

Figure 64. Vietnam’s fabric production during 2010-7M/2015

Figure 65. Vietnam fabric consumption

Figure 66. Vietnam fabric production by inputs

Figure 67. Fabric import by countries/regions

Figure 68. Vietnam fabric export and import

Table 14. Selected Textile Dyeing Wastewater indicators

 
2. 2.5. Sewing 93

Figure 69. Apparel production

Figure 70. Domestic apparel market share

Figure 71. Vietnam apparel export

Figure 72. Apparel exports of FDI and domestic businesses

Figure 73. Apparel export structure in 2014

Table 16. Shipment/delivery periods of selected countries

Figure 74. Inventory indexes of textile and apparel industry

 
2. 2.6. Distribution and export 99
3.                   Industry’s potential and risk analysis 103
3.1 Risk analysis 103
3.1.1 Five Forces Analysis 103
3. 1.2. SWOT Analysis 104
3. 1.3. Risk analysis 106
3. 2. Potential analysis 109
3. 2.1. Industry’s development plan 109
Table 17. Some criteria of T&G industry’s development plan  
3.2.2. Forecast and potential assessment 111

Figure 75. Vietnam T&G export turnover forecast

 
4.                    Industry’s key players 114
4.1. Key players in Garment Industry 114

Table 18. Top 8 enterprises with the highest Total asset value of Vietnamese textile industry

Table 19. Production capacity of Viet Tien Garment Corporation

Figure 76. Export market of Viet Tien in 2014

Figure 77. Export turnover of Nha Be

Table 20. The production capacity of NHABE Garment Corporation

Figure 78. Export market of Nha Be in 2014

Table 21. Production capacity of Hoa Tho Corp

Figure 79.Export market of Hoa Tho in 2014

Figure 80. Export turnover of Song Hong

Table 22. Production capacity of Song Hong Garment JSC

Figure 81. Export market of Song Hong in 2014

Table 23. Production capacity of Garment 10 Corporation – JSC

Table 24. Production capacity of Duc Giang JSC

Figure 82. Export market of Duc Giang in 2014

Table 25. Production capacity of TNG

Figure 83. Export market of TNG in 2014

Figure 84. Export market of Dong Nai in 2014

Figure 85. Net revenue 2014 – 2015

Figure 86. Gross profit and gross profit margin, 2015

Figure 87. Net profit and net profit margin 2015

Figure 88. Financial expenses 2015

Figure 89. Selling expense 2015

Figure 90. General and administrative expenses 2015

Figure 91. Asset structure

Figure 92. Capital source structure 2013 – 2014

Figure 93. Account Receivables

Figure 94. Inventories

Table 26. Liquidity and Profitability of nine selected garment enterprises

 
4. 2. Key players in Textile Industry 133

Table 27. Top 05 textile enterprises of Vietnam with largest net revenue in 2015

Table 28. Production capacity of Phong Phu Corporation

Figure 95. Export market of Phong Phu in 2014

Table 29. Yarn quality of Thanh Cong Textile Garment Investment Trading JSC

Figure 96. Export market of TCG in 2014

Table 30. Production capacity of Thanh Cong Textile Garment Investment Trading JSC

Figure 97. Consumption market of Century

Figure 98. Production of Century

Table 31. Production capacity of Hue Textile Garment JSC

Figure 99. Net revenue

Figure 100.Gross profit

Figure 101. After-tax profit

Figure 102. Financial expenses

Figure 103. Selling expenses

Figure 104. General and administrative expense

Figure 105. Asset structure

Figure 106. Liabilities structure

Figure 107. Account receivables

Figure 108. Inventories

Table 32. Liquidity and Profitability of five selected textile enterprises

 
5.                   Conclusion 150
Appendix 154
Table 33. Top largest Garment Exporters in 2014  

– Viet Tien Corporation
– Nha Be Garment Corporation
– Hoa Tho Textile and Garment Corporation
– Song Hong Garment JSC
– May 10 Corporation
– Duc Giang Corporation
– TNG Investment and Trading JSC
–  Sai Gon Garment Trading Manufacturing JSC
– Dong Nai Garment Corporation
– Phong Phu Corporation
– Thanh Cong Textile Garment – Investment – Trading JSC
– Viet Thang Corporation
– Century Synthetic Fiber Corporation
– Hue Textile Garment JSC