DECISION

APPROVING THE PROGRAM ON PRODUCTION OF SHUTTLE-WOVEN FABRICS FOR EXPORT UP TO 2015

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to the Governments Decree No. 189/2007/ND-CP of December 27, 2007. defining the functions, tasks, powers and organizational structure of the Ministry of Industry- and Trade;
Pursuant to the Prime Ministers Decision No. 36/2008/QD-TTg of March 10, 2008, approving the Strategy on development of Vietnams textile and garment industry up to 2015 and orientations to 2020;
At the proposal of Vietnam Textile and Garment Group (VINATEX) in Report No. 1116/TDDM-KHDT of October 22, 2008, on approval of the Program on production of shuttle-woven fabrics for export up to 2015;
At the proposal of the director of the Light Industry Department,

DECIDES:

Article 1. To approve the Program on production of shuttle-woven fabrics for export up to 2015 of Vietnams textile and garment industry, with the following principal contents:

I. DEVELOPMENT VIEWPOINTS AND OBJECTIVES

1. Viewpoints

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b/To concentrate on the production of raw and auxiliary materials, reduce trade deficit and increase the added value of textile and garment products,

c/To encourage and mobilize resources from various economic sectors and boost the attraction of foreign investment to develop the production of raw and auxiliary materials for the textile and garment industry.

2. Objectives

a/To concentrate on the production of shuttle-woven fabrics for export in order to meet market and customer demands along the line of sustainable development and improvement of economic efficiency and product quality;

b/ To strive to produce 1 billion m2 and 1.5 billion m2 of shuttle-woven fabrics by 2010 and 2015, of which 0.5 billion m2 and 1 billion m2 will be for export, respectively. Specifically:

Category

Unit of calculation

2007 figures

Objectives

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VINATEX

The whole industry

VINATEX

For 2010

For 2015

For 2010

For 2015

Demand for shuttle-woven fabrics

Million m2

...

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...

-

3,500

4,600

-

-

Production of shuttle-woven fabrics

Million m2

610.7

170

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...

1,500

300

450

Shuttle-woven fabrics for export

Million m2

155

18

500

1,000

...

...

...

300

II. DEVELOPMENT ORIENTATIONS

1. To focus on developing the production of key and common goods items for which export garment enterprises have high demand such as dressmaking cotton fabrics and polyester cotton fabrics and fabrics for household use.

2. To build a number of large textile dyeing centers in order to raise quality, reduce production costs and meet environmental standards.

a/ Building textile dyeing centers in industrial parks with adequate electricity and water supply and wastewater treatment facilities;

b/ Investing in textile dyeing and finishing centers in association with market preparation and development of human resources for the management and operation of equipment, technology transfer and environmental treatment. Attaching importance to the development of textile factories in order to provide high-quality plain fabrics for the dyeing and finishing process.

3. To invest in the textile dyeing sector on the basis of international cooperation in order to get access to capital sources, market, technology and managerial experience of countries with a developed textile industry and relocation trends such as Taiwan, the Republic of Korea, the United States of America, Japan, etc.

4. To diversity forms of ownership and reorganize dyeing factories after the model of joint-stock company, cooperative group and joint venture in which VINATEX will play the core role.

III. IMPLEMENTATION POLICIES AND SOLUTIONS

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a/ Building specialized textile dyeing industrial parks and clusters

- To invest in the construction of specialized textile dyeing industrial parks and clusters with adequate electricity and water supply and wastewater treatment facilities, meeting requirements on environment and trainable labor so as to attract investment in the textile dyeing sector;

- Vietnam Textile and Garment Group shall complete technical infrastructure systems to ensure stable supply of electricity and water and wastewater treatment up to national standards in existing industrial parks in Hoa Xa in Nam Dinh province, Hoa Khanh in Da Nang city, and Pho Noi B in Hung Yen province;

- Vietnam Textile and Garment Group shall act as the core in building electricity and water supply and wastewater treatment facilities in new textile dyeing industrial parks and clusters so as to attract domestic and foreign investment to meet the development objectives up to 2015 laid down in this Program. Vietnam Textile and Garment Group shall set up joint-stock companies operating in textile dyeing industrial parks and clusters in which the dominant shares will be held by the Group while the remaining shares will go to domestic and foreign partners. During 2008-2012, to invest in the construction of textile dyeing industrial parks and clusters in Thai Binh, Ninh Binh, Nghe An, Khanh Hoa, Binh Thuan and Long An provinces. In the 2012-2015 period, to invest in the construction of textile-dyeing industrial parks and clusters in Ha Tinh, Quang Tri, Tien Giang and Tra Vinh provinces;

b/ Vietnam Textile and Garment Group shall act as the core in the implementation of five key textile dyeing projects in the 2007-2012 period, including:

- The project on Teachang-Vina dyeing plant (a joint venture between VINATEX and Korean Thien Nam and Teachang companies) with a dyeing capacity of 42 million m2/year in the post-investment period and 63 million m3/year by 2009 in Yen My ;

- The project on a joint-venture enterprise between VINATEX and Korean Thien Nam and Teachang companies specialized in producing denim fabrics with a dyeing capacity of 45 million m2/year in the post-investment period in Hoa Xa (Nam Dinh province):

- The project to relocate and upgrade the dyeing factory of Nam Dinh Textile Joint-Stock company to produce dressmaking fabrics from cotton fabrics and polyester cotton fabrics of 42 million m2/year by 2010;

- The joint-venture project with the ITG group (USA) to produce trouser-making fabrics with a textile dyeing capacity of 38 million m2/year in the post-investment period and 76 million m2/year by 2010 in Son Tra;

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c/ Vietnam Textile and Garment Group shall act as the core in the implementation of projects to support the production of shuttle-woven fabrics:

- The project on establishing a textile-garment and fashion college in the form of joint-venture or joint-stock company in Thuan Thanh, Bac Ninh province;

- The project on a textile-garment ecological laboratory and a fabric designing center invested with ODA capital and state budget funds;

- The project on building two raw and auxiliary material centers in Hanoi and Ho Chi Minh City;

d/ Vietnam Textile and Garment Group shall formulate new textile dyeing projects to call for domestic and foreign investment in the period from now to 2015.

2. Policies and solutions on human resources development

a/ To adopt the program on training human resources for the textile and garment industry, prioritizing the training of economic-technical managers and salespersons in the textile and garment industry and technicians and skilled workers for key textile dyeing projects;

b/ To associate with foreign partners in training model and fabric designers.

3. Science and technology policies and solutions

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b/ To research and apply new technologies and raw materials for turning out textile products with particular properties, cleaner production technologies, energy-saving technologies and application of software to designing and management of textile and garment production and quality;

c/ To formulate a system of standards on textile and garment products in conformity and harmony with international standards. To support the upgrading of centers for verification and examination of the quality of textile and garment products in order to support textile and garment enterprises in managing product quality and dealing with technical barriers;

d/ During 2008-2010, to build a textile and garment eco-laboratory and a fabric development center with an investment capital of VND 48 billion from ODA and state budget funds;

e/ To build a textile and garment database and improve the website quality.

4. Market policies and solutions

a/ Vietnam Textile and Garment Group shall act as the sole agency in coordinating with the Ministry of Planning and Investment and the Ministry of Industry and Trade in organizing programs on calling for and encouraging enterprises from countries with textile dyeing traditions to invest in Vietnam. To help enterprises participate in domestic and foreign trade fairs, exhibitions and product displays;

b/ Textile and garment enterprises shall accelerate programs on building of their brands and images among domestic consumers and international partners;

c/ To enhance consultancy on international trade laws and, at the same time, make careful preparations for dealing with new barriers set by importing countries;

d/ To enhance cooperation with big foreign importers:

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5. Financial policies and solutions

a/ To raise investment capital from various economic sectors at home and abroad through business cooperation, joint venture, business association, equitization of enterprises or setting up enterprises with 100% foreign capital. To encourage enterprises to raise capital on the securities market or get commercial loans with or without the Governments guarantee;

b/ To work out scientific research plans, plans on human resource training and investment and trade promotion plans for reporting to the State to receive state budget supports under the Prime Ministers Decision approving the Strategy on development of Vietnams textile and gannent industry up to 2015 and orientations toward 2020.

IV. FUNDS FOR THE IMPLEMENTATION OF THE PROGRAM

1. Investment capital demand

Capital demand for the implementation of the Program during 2008-2015 is USD 2,570.8 million, in which:

a/ Capital for textile dyeing industrial parks and clusters and projects on textile dyeing yrns is USD 2,464 million:

b/ Capital for the project to produce PES fiber is USD 56.5 million;

c/ Capital for other supporting programs is USD 50.3 million.

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Project

Unit of calculation

Number of investment projects up to 2015

Investment capital for each project (million USD)

Total investment capital (million USD)

Textile dyeing industrial parks and clusters

parks, clusters

7

352

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PES fiber-producing factory

tons/day

120

0.47

56.5

Other supporting programs

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Textile and Garment College

college

1

12.5

12.5

Model center and eco-laboratory

center

1

6

...

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Raw and auxiliary material center

center

2

9

18

Training

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Implementation studies

3.6

Trade promotion

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Total

2,570.8

The mobilization of capital for the implementation of Program is decisive to the fulfillment of development objectives of Vietnams textile and garment industry. Capital will be mobilized mainly from foreign investors, loans of investment funds, ODA capital, proceeds from the transfer of land use rights after relocation of factories and capital from the issuance of shares and bonds on the securities market.

2. Investment capital structure

a/ Capital mobilized by VINATEX and its partners: 20-30%.

b/ Capital borrowed from credit institutions and other financial organizations: 70-80%.

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1. The Light Industry Department shall assume the prime responsibility for, and coordinate with relevant agencies, units and localities in, directing Vietnam Textile and Garment Association and Vietnam Textile and Garment Group to organize the implementation of this Program.

2. Vietnam Textile and Garment Group shall act the core in collaborating with Vietnam Textile and Garment Association in:

a/ Coordinating with localities in building textile dyeing industrial parks and clusters with adequate electricity and water supply and wastewater treatment facilities, creating favorable conditions for investment in textile dyeing projects and reporting them to the Ministry of Industry and Trade for negotiation and decision on their locations;

b/ Directly implementing some key textile dyeing projects in service of the Program on produc-tion of shuttle-woven fabrics for export up to 2015;

c/ Implementing the program on human resource training for the textile and garment industry and the program on building the image of Vietnam textile and garment industry.

Article 3. This Decision takes effect 15 days after its publication in CONG BAO.

Article 4. The director of the Ministrys Office, the directors of the Departments of Light Industry; Planning; Finance; Science and Technology; and Import and Export, the chairman of the Board of Directors and the director general of Vietnam Textile and Garment Group, and the Vietnam Textile and Garment Association shall implement this Decision.

FOR THE MINISTER OF INDUSTRY AND TRADE
VICE MINISTER




Bui Xuan Khu

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