Garment firms queue up for TPP tariff incentives

Polytex Far Eastern Vietnam, a subsidiary of the Far Eastern New Century Corporation (FENC) from Taiwan, has received an investment certificate from the People’s Committee of the southern province of Binh Duong to invest US$274 million into building a textile and garment production site.

The 99-hectare project adds to FENC’s existing Apparel Far Eastern garment production facility established in 2007 in Vietnam Singapore Industrial Park I, also in Binh Duong.

This investment is specifically aimed at exploiting business opportunities presented by the Trans Pacific Partnership (TPP). The upcoming vertically-integrated production site for yarn, fabrics, dyeing and apparel aims to meet the TPP’s yarn forward rule.

FENC expects to invest up to US$320 million in the project, and turn Vietnam into its third vertically-integrated production site, after China mainland and Taiwan.

FENC is among foreign enterprises ramping up their investments in order to enjoy the zero tariff rate offered by the TPP.

Vietnam has recently received big garment and textile projects with combined capital of US$2.27 billion invested by Hong Kong-based companies Tal, Crystal Pacific, Bros Eastern, and Haputex, and China mainland-based Texhong and Shengzhou.

Meanwhile, state-run Vietnam Textile and Garment Group (Vinatex) is also pushing its game to prepare for the potential signing of the TPP. Earlier this year, Vinatex announced it would invest in more than 30 major projects to develop supply chain links among its subsidiaries between 2015 and 2017.

The group recently got permission from Nam Dinh provincial People’s Committee to build the US$400 million Rang Dong Industrial Park (IP) for integrated textile and garment supply in the province.