vietnam textile and apparel industry report q2/2018 … · vietnam textile and apparel market 41...

VIETNAM TEXTILE AND APPAREL INDUSTRY REPORT Q2/2018

1

TABLE OF CONTENTS

2

Contents Page Contents Page

ABBREVIATIONS4

2. Vietnam textile and apparel market 41

SUMMARY 5 2.1. Vietnam textile and apparel market's overview 42

I. Business environment 7 2.2. Spinning 49

1. Macroeconomic situation 7 2.3. Textile dyeing 55

2. Legal framework 16 2.4. Apparel 61

II. Industry overview 21 III. Industry outlook and risk 67

1. World textile and apparel market 21 1.1. 5-forces analysis 68

1.1. Value chain of textile and apparel industry 23 1.2. SWOT analysis 71

1.3. Spinning 27 2. Industry outlook 73

1.4. Textile dyeing 30 2.1. Industry planning 74

1.5. Apparel 34

TABLE OF CONTENTS

3

Contents Page Contents Page

IV. Enterprise analysis 76

1. Garment enterprise analysis 77

2. Textile and fiber enterprise analysis 91

IV. Conclusion 104

ABBREVIATIONS

ABBREVIATIONS

4

Shortened

formFull form

Shortened

formFull form

CAGR Compounded Annual Growth Rate PET Polyethylene terephthalate

CMT Cut – Make – Trim GDVC General Department of Vietnam Customs

CNTAC China National Textile & Apparel Council GSO General Statistics Office of Vietnam

CPI Consumer Price Index CI Corporate Income

JCS Joint Stock Company Co., Ltd. Company Limited

NR Net Revenue FA Fixed Assets

EU European Union LTA Long-term Assets

GDP Gross Domestic Product LSA Short-term Assets

OBM Original brand manufacturer UAE The United Arab Emirates

ODM Original design manufacturer VCOSA Vietnam Cotton and Spinning Association

OEM Original Equipment Manufacturer VINATEX Vietnam Textile Corporation

VITAS Vietnam Textile and Apparel Association

SUMMARY

5

• The world textile and apparel industry is deeply influenced by

macroeconomic fluctuations.

• China, The United States, Germany and Japan are the largest textile

and apparel consuming countries in the world.

WORLD TEXTILE AND APPAREL MARKET

Content is intentionally removed for demo purpose

SUMMARY

6

• Textile and apparel industry is one of the key sectors of Vietnam and

has the second largest export turnover with export value contributing

10-15% to GDP.

• Vietnam is one of the top 10 textile and apparel exporting countries in

the world.

• Domestic textile and apparel enterprises are weak in the knowledge-

intensive stages such as building distribution system, exporting,

designing and branding..

VIETNAM TEXTILE AND APPAREL MARKET


TABLE OF CONTENTS

7

Part I. Business environment

1. Macroeconomic situation

2. Legal framework

8

Source: VIRAC, GSO

VND Trillion

GDP growth rate by quarter, 2015 – Q1/2018

GDP by current price and GDP per capita, 2013 – Q1/2018

Source: VIRAC, GSO


• Gross domestic product in the first quarter of 2018 is estimated to increase

by 7.38% , compared to the same period of 2017.

• In 2016, sales from the textile and apparel industry was 33 billion USD,

accounting for 16.7% GDP.



9

Sources: VIRAC, FIA

FDI capital, 2014 – Q1/208Billion USD

FDI attraction by sector, 2017

Sources: VIRAC, FIA




Foreign Direct Investment (FDI)

FDI attracted 618 new projects over the period from January to March 20, 2018.

10

Total value of exported and imported commodity of Vietnam in Q1/2018 reached 108.43 billion USD

Sources: VIRAC, GSO

Billion USDBillion USD

Imports and exports of commodity, 2015 – Q1/2018






Source: VIRAC

11

Source: VIRAC, GDVC

Source: VIRAC, GDVC

USD million

USD million

Main imported products from China, Q1/2018e

Main exported products to China, Q1/2018e VND/CNY exchange rate, 2/1016 – 3/2018




12

Source: VIRAC, SBV

VND/USD exchange rate, 2013-2017


The VND / USD exchange rate has been quite stable and still supported by a plentiful supply of foreign currencies


1. Macroeconomic situation – Impact of related sectors

Project LocationInvestment capital

(USD billion)

Capacity

(million tons/year)

Petrochemical refining projects being implemented in Vietnam

13

Source: VIRAC




• In the first three months of 2018, the total retail sales of consumer goods and services are estimated at 1.048 trillion VND

14

Source: VIRAC, GSO

Retail sales of goods, 2010 – Q1/2018


Brand Company

Number of storesRevenue

in

Q1/2018

(billion

VND)2011 2013 2015

Source: VIRAC, Retail Asia Publishing

Boom of modern retail systems:

(*) estimated



15


Leading retailers in Vietnam market, 2016 – Q1/2018

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16



2. Legal framework


2. Legal framework

Group of regulations and standards on textile and apparel production:

17


18

Group of policies and regulations affecting the industry

These regulations have an important influence on the sector of textile and apparel.


2. Legal framework


19


2. Legal framework



2. Legal framework

• Corporate Income Tax

20

Group of regulations on import and export:

Group of tax regulations:

• Import TaxContent is intentionally removed for demo purpose

TABLE OF CONTENTS

21

Part II. Industry overview

1. World textile and apparel market

1.1. Industry size

1.2. Value chain of global textile and apparel market

1.3. Spinning

1.4. Textile dyeing

1.5. Apparel


1.1 Industry size

• In 2017, the global textile and garment turnover is estimated at about USD 1,400 million.

22

Sources: VIRAC, Euromonitor Passport Data 2017

Revenue growth of global textile and apparel industry, 2012 – 2021f


TABLE OF CONTENTS

23



1.1. Industry size


1.3. Spinning

1.4. Textile dyeing

1.5. Apparel


1. World textile and apparel market – 1.2. Value chain of global textile and apparel market

24


Value chain of global textile and apparel industry is divided into 5 basic stages

25






CMT OEM/FOB

ODM

OBM

26


TABLE OF CONTENTS

27



1.1. Industry size


1.3. Spinning

1.4. Textile dyeing

1.5. Apparel


1. World textile and apparel market – 1.3. Spinning

Source: VIRAC, Statista

28

Source: VIRAC, The fiber year, FRED

Fiber consumption by type, 2017Million tons

Fiber production and consumption worldwide, 2000 – 2017e


World fiber import and export, 2010 - 2017e

Nguồn: VIRAC, CIRFS


1. World textile and apparel market – 1.3. Spinning

Cotton and polyester fibers are the two main types of fibers.

29

Global demand for types of fiber 1980 – 2030e

Source: VIRAC, PCI Fibres

Million tons

Source: VIRAC, ICAC, CIRFS, TFY, FEB

Global fiber consumption structure, 2016 Structure of global consumption purpose of fiber, 2014


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30



1.1. Industry size


1.3. Spinning

1.4. Textile dyeing

1.5. Apparel


1. World textile and apparel market – 1.4. Textile dyeing

Source: VIRAC, UNcomtrade

31

Global fiber and fabric production index, Q1/2015 –Q2/2017

billion USD

Source: VIRAC, ITMF

Global textile trade, 2010 – 2016e




32


33

Sources: VIRAC, WTO Secreteriat

Sources: VIRAC, WTO Secreteriat

In 2017, in terms of the textiles exports, China, EU28 and India are still the

three countries and regions with the largest export turnover,

Billion USD

billion USD

Top 10 largest textile exporters in the world, 2017e

Top 10 largest importers of textiles in the world, 2017e




TABLE OF CONTENTS

34



1.1. Industry size


1.3. Spinning

1.4. Textile dyeing

1.5. Apparel


1. World textile and apparel market – 1.5. Apparel

Source: VIRAC, Marketline

35

billion USD

Scale of global textile production 2014-2018e




Global textile and apparel trade is heavily influenced by major

economies such as Europe and the United States.

Source: VIRAC, UN Comtrade

36

billion USD

Global textile and apparel import and export value, 2010 – 2023e




Source: VIRAC, WTO Secreteriat

37

Source: VIRAC, WTO Secreteriat

billion USD

billion USD

World's top 10 largest apparel exporting countries,

2017e

World's top 10 largest apparel importing countries,

2017e





38


billion USD

Export structure of textile and apparel worldwide 2016e

Global apparel trade value 2003-2018F


There is a huge gap in annual spending on apparel per capita between

developing and developed countries.

39



billion USD

USD/year

Source: VIRAC, Euromonitor

Scale of global apparel market 2015-2025f

Spending on apparel per capita 2014-2019F


These days, EU, the USA, China and Japan are the biggest consumption

markets

Sale growth rates of developed markets such as EU, the USA and Japna

are relatively lower than sale growth rate of China.



40

• Currently, the textile and apparel industry is gradually improving, but there

are still big gap among countries.

Source: VIRAC, Jobstreet

Source: VIRAC, Jobsteet

USD/month

USD/month

Average wage of textile and apparel industry in some countries, 2016

Average wage in some countries, 2016


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41


2. Vietnam textile and apparel industry

2.1. Industry overview

2.2. Spinning

2.3. Textile dyeing

2.4. Apparel


2. Vietnam textile and apparel industry – 2.1. Industry overview

Indicator Value

INDUSTRY OVERVIEW

42


Number of enterprises of Vietnam textile and apparel industry, 2012 - 2016

43

Sectors 2012 2013 2014 2015 2016

Sources: VIRAC, GSO






The South East region is home for the largest number of textile and

apparel enterprises in the country with three major cities: Ho Chi

Minh City, Binh Duong and Dong Nai.

Source: VIRAC, MOIT

44

Textile and apparel enterprises distributed by region, 2016


At present, Vietnam has 8,149 private enterprises in the textile and apparel

industry, mainly located in the South East,

Sources: VIRAC, GSO

45

Sources: VIRAC, Enterprise Survey 2014

Textile and apparel private enterprises distributed by region, 2016

The proportion of turnover of types of apparel enterprises, 2014




Sources: VIRAC, GSO

Sectors 2012 2013 2014 2015 2016

Proportion of textile

and apparel sectors in

2016

Numbers of laborers in Vietnam textile and apparel industry, 2012 - 2016

46

Textile and apparel is currently the most labor-intensive industry. The labor force of the textile and apparel industry accounts for more than 20% of the

labor force in the industrial sector and nearly 5% of the total labor force.




• Textile and apparel industry responds to industrial revolution 4.0 :

47




The import-export balance of Vietnam's textile and apparel commodity,

2013 - 2017

48

No. Type 2013

(Million USD)

2014

(Million USD)

2015

(Million USD)

2016

(Million USD)

2017

(Million USD)

2017

compared to

2016 (%)

Sources: VIRAC, VITAS




TABLE OF CONTENTS

49




2.2. Spinning

2.3. Textile dyeing

2.4. Apparel


2. Vietnam textile and apparel industry – 2.2. Spinning

Source: VIRAC, GSO

50

Source: VIRAC, GSO

Thousand tons

Thousand tonsbillion VND

Yarn production volume, 2010 – Q1/2018e

Yarn volume and consumption value, 2010 – Q1/2018e


In Q1/2018, number of produced yarn is estimated about

549.1 thousand tons



Source: VIRAC, GDVC

51

million USD

Yarn import and export in Vietnam, 2010 – Q1/2018e




Source: VIRAC, GDVC

52

• In 2017, China is the main yarn export market of Vietnam,

Source: VIRAC, GDVC

Export structure of yarn by volume, Q1/2018e

Import structure of yarn by volume, Q1/2018e




Company name Capacity Product segment

Source: VIRAC, VITAS

53


Number of yarn piles and rotors in Vietnam yarn industry, 2010 – 2017e


Long fiber producing enterprises in Vietnam



54

Time Company name Country Investment Value (million USD) Location

Some fiber projects in Vietnam in the period 2014 - 2016

Source: VIRAC


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2.2. Spinning

2.3. Textile dyeing

2.4. Apparel


2. Vietnam textile and apparel industry – 2.3. Textile dyeing

Vietnam's fabric production only meets 15-16% of demand.

Source: VIRAC, GSO

56

Source: VIRAC, GSO

Source: VIRAC, GSO

Million m²

VND trillion

Fabric production volume in Vietnam, 2010 – Q1/2018e

Fabric consumption value, 2012 – Q1/2018e

Production structure of Vietnamese fabrics, 2012 – Q1/2018e




Source: VIRAC, GDVC

57

Source: VIRAC, GDVC

million USD

Fabric export-import turnover of Vietnam, 2011 – Q1/2018e Vietnam's fabric import market structure, Q1/2018e




Textile dyeing and finishing process

58




General assessment of textile machinery and technology in Vietnam

General assessment of dyeing technology in Vietnam

Material and power Unit Vietnam Germany Finland

Source: VIRAC

77




Causes leading to the nondevelopment of Vietnam textile dyeing industry:

60


TABLE OF CONTENTS

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2.2. Spinning

2.3. Textile dyeing

2.4. Apparel


2. Vietnam textile and apparel industry – 2.4. Apparel

Garment production volume is increasing but mostly for export.

Source: VIRAC, GSO

62

Million units

Apparel production volume, 2012 – Q1/2018e

Market share of domestic apparel market, 2016e




• In general, the domestic apparel market is still rather modest due

to people's low living standards.

63

million USD

Source: VIRAC, GDVC


Apparel exports (including fabric) of Vietnam, 2010 –

Q1/2018e

Structure of apparel for export, 6M/2017eContent is intentionally removed for demo purpose



• The United States, the EU, Japan, Korea are the four largest

importers of textiles and garments in Vietnam.

64

Source: VIRAC, GDVC

Source: VIRAC, GDVC

billion USD

Export market structure of textiles and apparel in Vietnam,

Q1/2018e

Export value of textiles and apparel to some countries, 2013 – Q1/2018e




65

Source: VIRAC, GDVC

billion USD

Textile and apparel exports of FDI enterprises and domestic

enterprises, Q1/2018e




66

Countries US EU Japan

China

India

Vietnam

Source: VIRAC, GSO

Source: VIRAC

Average time of order production in some countries (day)Average time of order production in Vietnam (day)

Inventory index of textile and apparel industry, 8/2016 -

12/2017


TABLE OF CONTENTS

67

Part III. Industry outlook and risk

1. Industry risk

1.1. Five Forces analysis

1.2. SWOT analysis

68

In general, competition in the textile and apparel industry in Vietnam

is high.

Factors Opinions Assessment

Sources: VIRAC collects

Competition level of textile and apparel industry in Vietnam


1. Industry risk – 1.1. Five Forces analysis


• Entrance barriers:

69






• Market competitiveness

• Bargaining power of customers

70






• Bargaining power of suppliers

• Threats of substitutes:

TABLE OF CONTENTS

71


1. Industry risk

1.1. Five Forces analysis

1.2. SWOT analysis

Strengths Weaknesses

Opportunities Threats

72


1. Industry risk – 1.2. SWOT analysis


73

TABLE OF CONTENTS


2. Industry outlook

2.1. Industry planning


2. Industry outlook – 2.1. Industry planning

74

On April 11, 2014, the Ministry of Industry and Trade issued Decision No. 3128/QD-BCT approving the master plan for the development of Vietnam's

textile and apparel industry to 2020 with a vision to 2030..



2. Industry outlook – 2.1. Industry planning

Indicator Unit 2015 2020 2030

75

Specific targets of the textile and apparel industry to 2030


TABLE OF CONTENTS

76

Part IV. Enterprise analysis

1. Garment enterprise analysis

2. Textile and fiber enterprise analysis



Top 8 enterprises in Vietnam apparel industry with the largest net revenue in 2017

Enterprise AddressNet revenue

(billion VND)

Total assets

(billion VND)

Viet Tien Garment Corporation

Nha Be Garment Corporation JSC

Hoa Tho Textile Garment JSC

Garment Corporation 10

TNG Investment and Trade JSC

Duc Giang Corporation

Sai Gon Garment Manufacturing Trade JSC

Dong Nai Garment Corporation

77




78

VIET TIEN GARMENT CORPORATION

Production capacity of Viet Tien Corporation

Source: VIRAC, Viet Tien Garment Company

Export market structure of Viet Tien, 2017




79

Production capacity of Hoa Tho Textile and Garment Corporation

HOA THO GARMENT CORPORATION

Source: VIRAC, Hoa Tho Textile and Garment JSC

Source: VIRAC, Hoa Tho Textile and Garment JSC

Textile export market structure of Hoa Tho, 2017




80

NHA BE GARMENT CORPORATION JSC

Structure of textile export market of Nhà Bè, 2017

Source: VIRAC, Nha Be Garment JSC

Source: VIRAC, Nha Be Garment JSC

USD million

Production capacity of Nha Be Garment JSC

Export turnover of Nha Be, 2011-2017




81

GARMENT CORPORATION 10

Production capacity of Garment Corporation 10

Source: VIRAC, Garment Corporation 10




82

Production capacity of Duc Giang Corporation

Duc Giang Corporation

Source: VIRAC, Duc Giang Garment Corporation

Structure of textile export market of Duc Giang, 2017




83

Production capacity of TNG, 2017

THAI NGUYEN INVESTMENT AND TRADING JOINT STOCK COMPANY

Source: VIRAC, TNG

Structure of textile export market of TNG, 2017Content is intentionally removed for demo purpose



84

SAI GON GARMENT MANUFACTURING TRADING JOINT STOCK COMPANY




85

Dong Nai Garment Corporation

Source: VIRAC, Dong Nai Garment JSC

Structure of textile export market of Dong Nai Garment,

2014


System of Machine of Dong Nai Garment, 2016



86

Source: VIRAC

billion VND

Net revenue, 2016 - 2017


• Viet Tien Garment Corporation had the highest net revenue in selected businesses.



87

Source: VIRAC

billion VNDGross profit margin, 2016 - 2017




Financial expenses of businesses tended to decrease in 2017.

88

Source: VIRAC

billion VND

Financial expenses and financial expenses/net revenue ratio, 6


The average financial expenses/ net revenue ratio of selected group was 1.2% in 2017.



89

Source: VIRAC

Debt/Equity ratio, 2016 - 2017


• The majority of garment businesses have high debt/equity ratio



90

Source: VIRAC

Source: VIRAC

%

Solvency ratio, 2016 - 2017

Profit Ratio, 2016 - 2017


TABLE OF CONTENTS

91






Vietnam's top 5 textile and yarn enterprises with the largest net revenue, 2017 (billion VND)

Enterprise AddressNet revenue

(billion VND)

Total assets

(billion VND)

92




93

Thanh Cong Textile Garment Investment Trading JSC

Source: VIRAC, TCG

Products UnitProduced,

2017

2017

compared to

2016

Production, 2017

Nguồn: VIRAC, TCGNguồn: VIRAC, TCG

Investment projects in 2017




94

Product Production capacity Machinery, input materials

Production capacity of Thanh Cong Textile Garment Investment Trading JSC




95

Production capacity of Phong Phu Corporation

Phong Phu Corporation

Source: VIRAC, Phong Phu Corp

Structure of textile export market of Phong Phú 2014




96

Product Description

Viet Thang Corporation




97

Hue Textile Garment JSC

Production capacity of Hue Textile Garment JSC




98

Century Synthetic Fiber Corporation

Source: VIRAC, Centery Fiber Source: VIRAC, Century Fiber

Ton

TonFiber consumption structure of Century Synthetic Fiber

Corporation, 2017

Fiber production of Century Fiber, 2017




99

Source: VIRAC

billion VNDNet revenue of textile and fiber enterprises, 2016 - 2017




100

Source: VIRAC

Source: VIRAC

billion VND

Gross profit margin, 2016 - 2017




101

Source: VIRAC

VND billion Financial expenses and financial expenses/ net profit, 2016 - 2017




102

Source: VIRAC

Source: VIRAC

Round

Day

Total asset turnover, 2016 - 2017

Days in inventory, 2016 - 2017




103

Source: VIRAC

Content is intentionally removed for demo purposeSource: VIRAC

Solvency Ratio, 2016 - 2017 Profit Ratio, 2016 - 2017

TABLE OF CONTENTS

Part V: Conclusion

104

Part V: Conclusion

105


REPORT DISCLAIMER

106

Report disclaimer

This document has been prepared in good faith on the basis of information available at the date of publication without any independent verification. VIRAC has

produced this report for private circulation to professional clients only. All information and statistical data herein have been obtained from sources we believe to

be reliable and made to ensure the accuracy of the contents of the pages of the report at the time of preparation. Such information has not been independently

verified and VIRAC makes no representation or warranty, whether express or implied, of any kind with respect to the document and its contents, information and

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use this report for any purpose that is unlawful and that you will not reproduce the report or redistribute it outside your organization, or place it on a website for

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vietnam textile and apparel industry report q2/2018 … · vietnam textile and apparel market 41...

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