|Workers produce clothes at the Korean invested Leojins Garment company in the northern province of Ha Nam. Investment opportunities in the garment industry are growing ahead of the TPP, which once signed would mean local companies would enjoy tax free exports to member countries. — VNA/VNS Photo Hong Ky
HA NOI (VNS)— Foreign companies are starting to pour money into Vietnam to take advantage of potential economic opportunities from future free trade agreements (FTA).
Viet Nam is negotiating important FTAs, including the Trans-Pacific Partnership (TPP), the Viet Nam-EU FTA, the Vietnam-Korea FTA and the ASEAN+6. Once these agreements are signed, companies will have the chance to offer products and services to more consumers and businesses.
Among the many sectors, garments and textiles, food, livestock and energy have received the most attention.
According to Tran Quang Nghi, general director of the Vietnam National Textile and Garment Group (Vinatex), more than a dozen foreign companies from mainland China, Japan, South Korea, Austria and Taiwan are planning to build fabric and dye factories in the country.
Nghi said foreign businesses were seeking investment opportunities in the garment industry to stay ahead of the TPP, which once signed would mean local companies would enjoy tax free exports to member countries.
China's Texhong Textile Group is expanding its presence in Viet Nam with a US$300 million fabric plant that will open in the northern province of Quang Ninh in May.
Yulun Jiangsu Textile and Garment has also received an investment certificate for a $680 million fibre production textile and dye factory in Bao Minh Industrial Zone in Nam Dinh Province.
In HCM City, Taiwanese Forever Glorious has committed to invest $50 million in a project to make high-end underwater sportswear, and China's Gain Lucky Ltd also plans to invest $140 million in a project to design and produce luxury garments.
The agricultural sector is also attracting foreign capital.
Last month, nearly 20 French companies visited Viet Nam to seek investment opportunities in the fields of machinery and technical skills in animal husbandry.
According to Nguyen Dang Vang, chairman of the Viet Nam Livestock Association, French businesses wanted to cash in on untapped potential markets as future FTAs would open bigger markets for livestock products along with the development of this sector.
Meanwhile, Japanese firms are keen on high-tech sector, with CEO of Sojitz Corporation Hideaki Kato revealing plans to invest in 3-4 industrial zones in Viet Nam in the areas of food, energy and electronics.
Vo Tri Thanh, deputy director of the Central Institute for Economic Management, said Viet Nam would benefit from foreign capital accompanied by cutting-edged technology and management skills.
However, he said domestic businesses remained the backbone of the economy and local companies should have rational development strategies to sharpen their competitiveness while being able to collaborate with foreign partners.
However, the Viet Nam Chamber of Commerce and Industry warned that Vietnam could become a "backyard" production target for foreign investors to outsource if local companies failed to up their game. — VNS