Itochu increases investment ratio in Vietnam National Textile and Apparel Group
It was reported on April 3 that Itochu Corporation increased its investment ratio in Vietnamese state-owned textile enterprises. Itochu invested approximately 5 billion yen to acquire more shares, becoming the second largest shareholder after the Vietnamese government. Due to factors such as rising labor costs in China, Itochu hopes to cultivate Vietnam as an export base for high-performance clothing. It plans to increase Vietnam’s exports to Japan, the United States and Europe to 100 billion yen by 2021, 1.5 times the current level, and is particularly committed to expanding exports to Europe, which has signed a free trade agreement (FTA) with Vietnam.
Itochu has increased its investment ratio in Vietnam National Textile and Apparel Group (Vinatex), Vietnam’s largest state-owned garment sewing company, to nearly 15%. Itochu acquired about 5% of the company in 2015. In Vietnam, it is rare for foreign-invested enterprises to invest more than 10% in state-owned enterprises.
The Vietnam National Textile and Apparel Group has about 200 sewing factories. In the past three years, it has invested about 20 billion yen in adding equipment for the production of silk and fabrics and building a one-stop business system from textiles to sewing.
After Itochu invested in 2015, it has cooperated with the company in the sewing of suits, shirts and other clothing and the production of thermal underwear. In the future, we will expand the production of high-performance products and export them to Japan, Europe and the United States. Discussions are underway to allow Japanese raw material manufacturers to cooperate with the company to produce high-performance clothing such as sportswear.
Itochu’s overseas apparel exports from Vietnam now exceed 60 billion yen per year. Half of them are entrusted to the Vietnam National Textile and Garment Group for production. Itochu will further expand contracted production and expand exports to 100 billion yen by 2021.
In the textile industry, due to factors such as rising labor costs in China, factories are being built in Vietnam one after another. Fast Retailing, which operates Uniqlo, has also increased its factories in Vietnam to about 40 in the past year. (Title: Itochu increases investment ratio in Vietnam National Textile and Apparel Group)
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