Korean Companies Invest More in Vietnamese Textile and Apparel Sector

In what can be termed as growing interest by Korean companies in investing in the textile and apparel sector in Vietnam, a new fibre manufacturing plant with Korean investment has been launched this month in Vietnam’s southern province of Dong Nai, reports Vietnam Investment Review.

The US$ 52 million project was launched by Dong-IL Vietnam Limited, a subsidiary of Seoul-based Dong-IL Corporation, in Dong Nai province’s Loc An-Binh Son Industrial Park.

The textile plant is expected to become operational by mid-2015 and would have an estimated annual capacity to produce 9,000 tons of fibre.

With the entry of Dong-IL, more Korean companies are likely to consider Vietnam for their investment.

However, Dong-IL is not the first Korean firm to set up manufacturing facility in Vietnam. SEA-A Group has been operating in Vietnam for nearly six years. Winners Vina Limited, a subsidiary of SEA-A runs a garment plant in Vietnam’s north-central province of Thanh Hoa, employing about 3,000 people.

Winners Vina is now considering establishment of a second garment manufacturing unit in Vietnam at a cost of $15 million.

The rise in Korean investment has helped in strengthening Vietnam’s textile and garment industry, and has also served to increase the export value to Korea. As a result, Korea has now become the fourth largest export market for Vietnamese textiles and clothing in terms of value, after the US, the EU and Japan.

From less than $300 million worth of Vietnamese textile and apparel exports to Korea in 2009, they have jumped to nearly $1.2 billion in 2013.

Currently, negotiations for the Vietnam-Korea free trade agreement (FTA) are on and are expected to conclude by October this year. The ratification of FTA is expected to further boost Korean investment in Vietnam, according to the Vietnam Textile and Apparel Association (VITAS).