Japanese Corporation raises stake ownership at Vinatex
Japanese trading firm Itochu spent about Y5 billion (US$46.9 million) to lift its stake in Vietnam National Textile and Garment Group, or Vinatex, to nearly 15%.
The company already had a roughly 5% interest, acquired in 2015. Following the recent move, Itochu has become Vinatex's second-largest stakeholder after the Vietnamese government, announced the former on its website.
Vinatex operates about 200 sewing factories in Vietnam.
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Since its 2015 investment, Itochu has collaborated with Vinatex on suits, shirts and functional undergarments for cold weather, for instance. It plans to boost production of high-performance apparel in Vietnam and export the output to Japan, Europe and the U.S. Itochu may have Vinatex produce such items as sportswear through collaboration with materials makers.
Itochu, one of the leading economic groups in Japan operating in various areas, including textiles and garment, has co-operated with some 100 textiles and garment companies of Viet Nam.
Itochu exports a little over Y60 billion (US$567 million) worth of apparel from Vietnam a year, with half of that produced by Vinatex. The company aims to increase outsourced production and raise exports to 100 billion yen by 2021.
Vietnam has a free trade agreement with the European Union, and is also participating in the Trans-Pacific Partnership, making it a suitable alternative as a manufacturing hub to China, where labor costs are climbing.
Vinatex's net revenue in 2017 is estimated at VND17.5 trillion (US$766 million), an increase of 13.2% over the last year, according to the company's recent consolidated financial statement.
Vinatex's net profit reached VND634 billion (US$27 million), up 9.5% year-on-year, following the company's net revenue in the fourth Quarter of 2017 of VND4.4 trillion (US$192 million), a slight increase of 0.7% compared to the same period of 2016.
In 2017, Vinatex recorded export value of over US$3 billion, increasing 10% over 2016, stated in the company's meeting reviewing its business result in 2017 and plans for 2018 on January 3.
The company set target of reaching VND48.5 trillion (US$2.1 billion) in revenue for 2018 and pre-tax profit of VND1.45 trillion (US$63 million), increasing 6.5% and 1.1% compared to 2017, respectively.
The global GDP in 2018 is expected to grow sustainably, but demand for textile & garment in international market will grow at modest rate of 1-2%.
Consequently, Vietnam’s textile and garment industry set the target of US$34 billion, up 10% over 2017.
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Vietnam news in brief - August 24
Read The Hanoi Times to stay up to date on developments in Vietnam.
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