With Vietnam’s textile exports reaching $1.89 billion in June, overtaking phones as the most profitable export sector for the country, and a renewed interest across the Vietnamese government, businesses and consumers in producing products for home markets, the Vietnam National Textile and Garment Group (Vinatex) has transformed this once modest apparel manufacturing complex into a major player with the potential to crack the world’s top ten textile and garment consortiums.
High quality, reliable shipping and delivery, and competitive costs have spurred this burgeoning sector of the Vietnam economy, and plans to raise more cash for expansion are now on the Vinatex agenda with an initial public offering (IPO) scheduled for September.
The IPO was originally scheduled for July 22, however, it was rescheduled to allow investors additional time to evaluate the company’s prospects. The IPO of Hanoi-based Vinatex is widely seen as one of the more attractive in the communist country, where the government is reforming a largely inefficient state sector that accounts for about half of the country’s debt, Reuters reported.
According to a statement from Vinatex, proceeds from the IPO will be used for growth opportunities and to capitalize the upcoming Trans-Pacific Trade Pact (TPP). Vinatex posted a healthy 12 percent year-over-year increase in 2013 exports, valued at $3 billion. Reported earnings were $1.05 billion, a 15 percent increase over the same period a year earlier.
The group also plans to expand its domestic market as the national economy improves. Vinatex members operated 4,125 stores and dealerships in 2013, with an anticipated increase of 3.9% to 4,286 in 2014.
In a move to significantly boost sales and cut delivery times and related costs, Vinatex announced its interest in setting up a textile and apparel factory in a Moscow suburb. Moscow region’s Minister of Investments and Innovations has met with Vinatex representatives to discuss the idea.
Among other accomplishments of Vinatex over the past half-decade is its integrated supply-production chain across the country and an increase in raw material production. Vinatex membership includes some 120 textile- and garment-making subsidiaries and more than 120 stock companies.