Vietnam’s spinning and textile industries have seen phenomenal expansion during the last several years, as the country’s garment and apparel sectors have implemented a concerted growth plan with the goal of becoming a global top 10 textile apparel exporting country. For the first half of 2007, Vietnam’s textile apparel exports totaled $3.4 billion (USD), an approximate 25% increase from the same time in 2006.

Even with this growth, Vietnam missed its 2007 middle-of-the-year goal by 3%, and exports could slow during the second half of 2007 due primarily to anti-dumping duties threatened by the U.S. Fewer textile orders from the U.S. have been placed for the remainder of 2007, as many American importers wait for the decision of U.S. policy makers.

Even with the current market down-turn and questions for the remainder of 2007, leaders of the Vietnamese textile and garment industries remain very positive. During the congress of the Vietnam Apparel and Textile Association held in May, leaders discussed several goals for the next term, which lasts until 2010. Leaders want to focus on increasing Vietnam’s cotton production, as the country currently imports 95% of all cotton consumed. Other goals include improving infrastructure – including machinery, facilities and output capabilities – as well as increasing human resources in areas of fashion design, marketing and technology.

Long-Term Indicators

Several key demographic aspects indicate that Vietnam should see success in its efforts to consume more cotton and produce better quality finished goods in the near future. Its growing population not only creates a domestic market ($1.8 billion in 2006), but also is a low-cost workforce that keeps operational expense down. Minimized operating costs combined with a Vietnamese economy that has skyrocketed with record gains in recent years have attracted capital investment in the textile and garment manufacturing industries.

While Vietnam’s long-term outlook is positive, some issues must be addressed for the country to reach its full potential. Mill technology will need even more investment to compete with China and Vietnam’s neighbors in Southeast Asia. More privatization of government and parastatal firms is also a necessity to invigorate production. Creativity and innovation – qualities responsible for Vietnam’s current success – will have to be increased and utilized in the future.