GENEVA – A World Bank-funded programme to boost sustainability in Vietnam textile mills has announced US$24m in energy, water and chemicals savings across 70 participatory factories since 2016. IFC, the World Bank arm leading the programme, says it has enabled the factories to invest US$26m in more sustainable and efficient methods of production. The IFC says when the programme‘s recommendations are fully implemented over the next three years, the US$40m capital investment – required for retrofits and more efficient equipment – could collectively save four million cubic metres of water and curb 788,500 tons of greenhouse gas emissions annually. To offer perspective, this is equivalent to removing 1.1 million new cars from the road – an achievement which is remarkable on the one hand but which also shows just how resource-intensive the textile supply chain is.
The 70 factories working in the programme supply large retailers and clothing companies including VF Corp., Target Corp., Puma, New Balance, and Adidas.
It is claimed that energy consumption in Vietnam textile sector alone could decrease nationwide by 30 per cent with technology upgrades and improved efficiency, with Vietnam one of the ten largest exporters of textiles and garments globally. With more than $30 billion in these exports annually, the sector contributes significantly to the country’s economy, however, the sector is the second-biggest water polluting source in the country. Vietnam’s textile and garment factories are also among the world’s most energy-intensive, using up one tenth of the total energy consumed by all industries in the country.
Among participatory companies in IFC’s Vietnam Improvement Programme are Phong Phu International (PPJ). Initially, IFC assessed PPJ’s potential to achieve optimal energy and water efficiency, before helping the company adopt emerging technologies and good practices. With 20 factories and 14,000 workers supplying denim, knit, and woven apparel to global brands, the company first implemented several resource-efficient solutions at its Thanh Chau wash factory in 2016 and 2017.
Apart from landing more orders, the measures helped PPJ slash its energy consumption by almost seven million kilowatt hours per year, and use 200,000 cubic metres less water annually. This allows it to save as much as US$700,000 a year, while also – the company suggests – paying workers a salary that encourages them to remain with the company.
In terms of actual measures, PPJ initially replaced its low-efficiency boiler with a high-efficiency one. It also achieved significant water efficiency by recycling 80 per cent of wastewater. For higher resource efficiency and better productivity, PPJ replaced a manual denim process with laser machines, and switched from traditional washing machines to modern ozone machines.
“Improved efficiency and increased output have helped us attract new buyers who are in search of suppliers with global standards,” said PPJ’s vice general director Nguyen Thi Lien. She also believes increased profit leads to better salary for employees.
“A salary of US$400 allows me to save, send money home for my sister’s education, and pay for my parents’ medical treatment,” one employee noted.
The company has rolled out similar upgrades in all its factories throughout 2018. As productivity grows by at least 30 per cent, PPJ is expecting a turnover of US$300m in 2018—a 30 per cent increase compared to 2017. Operating costs have decreased by 20 per cent and PPJ has said it plans to set up a sophisticated automatic garment factory in Asia by next year.