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HANOI – New figures suggest government agencies in Vietnam have become reluctant to license textile dyeing and finishing projects due to concerns about environmental pollution. Statistics on foreign direct investment (FDI) show that 90 per cent of investments in the textile industry are now in garment production-only projects, with many authorities concerned that they don’t have the wastewater treatment capacity to handle dyeing and finishing projects. The unexpected stance from Vietnam reflects concerns by government officials about the experiences of China, where years of rampant pollution from textile dyeing created a devastating pollution landscape which the country is still trying to tackle.

While good news for environmentalists, policy makers are concerned that Vietnam may not be able to take advantage of CPTPP and other free trade agreement set requirements on the proportion of materials made in Vietnam and FTA-member countries. Also, many investors seek to develop vertically integrated operations incorporating all stages of textile processing in order to secure efficiency and economy of scale benefits.

Three years ago, Da Nang authorities unexpectedly refused a US$200m textile, dyeing and garment project registered by a Chinese enterprise, while Dong Nai and Ba Ria-Vung Tau provinces in the south have listed textile and dyeing as business fields in which they don’t encourage investment.

Meanwhile, most recently, a US$350 million textile and dyeing project registered by the huge Hong Kong-based TAL Group is said to still be on the table of Vinh Phuc and it is unclear if the project will get the green light by authorities.

Despite all of this, the textiles and garment industry in Vietnam gained the second-largest export value in the first four months of this year, after the export value of phones and their components, according to the Ministry of Industry and Trade.

The export value of textiles and garments in the first four months was estimated at US$8.6bn, an annual increase of 15.7 per cent.

The ministry said that, in the first three months of the year, the United States ranked first, with the export value of textiles and garments from Vietnam reaching US$3.04bn, an annual increase of 11.6 per cent and accounting for 47.3 per cent of the total garment export value.

The value of exports to the European Union rose by 11.8 per cent to reach US$806.23m, while the ASEAN market increased by 26 per cent to US$228.36m against the same period last year.

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