Fiber industry may collapse without bank support: Vinatex chairman

By Dinh Vu, Minh Hue
Fri, March 15, 2024 | 10:19 am GMT+7

Vietnam’s textile and garment sector is facing huge difficulties caused by the global situation and domestic interest and exchange rate policies, with the fiber industry likely to disappear in the near future without bank support, said Le Tien Truong, chairman of Vietnam's largest garment maker Vinatex.

Speaking at a Thursday conference on monetary policy management to facilitate production and business in 2024 chaired by Prime Minister Pham Minh Chinh, he said Vinatex accounts for 5% and 8% of the entire textile and garment industry's workforce and export turnover, respectively.

Le Tien Truong, chairman of Vietnam's largest garment maker Vinatex, speaks at a conference on monetary policy management to facilitate production and business in Hanoi, March 14, 2024. Photo courtesy of the government's news portal.

Le Tien Truong, chairman of Vietnam's largest garment maker Vinatex, speaks at a conference on monetary policy management to facilitate production and business in Hanoi, March 14, 2024. Photo courtesy of the government's news portal.

“However, Vinatex and the textile and garment export industry are facing many difficulties from both interest rate and exchange rate policies,” he noted.

In 2022-2023, the world’s top five textile and garment exporters, including China, Vietnam, India, Bangladesh and Turkey, all tried to stimulate exports by sharply weakening the value of their currencies.

While Turkey had its currency devalued by 50%, Bangladesh 21%, and China 11%, the Vietnamese dong, the local currency, decreased by only 5% in value in the past two years, according to Truong.

"In terms of exchange rate, Vietnam's textile and garment products were about 15% more expensive than others in the top five," he said, explaining this was also one of the reasons why Vietnam’s textile and garment exports declined 10% in the period, the sharpest fall among the five countries in the industry.

Regarding interest rate and credit policies, the Vinatex chairman commented that lending interest rates in other countries are at about 3.5%, while in Vietnam, Vinatex is borrowing money at a rate of 7-9%.

The interest Vinatex paid to banks in 2023 increased by 10% compared to 2022, while the total outstanding debt decreased by 11%, Truong cited his company’s consolidated financial statement, saying it meant the capital cost was more expensive.

Suffering fiber industry

The fiber industry is losing on a global scale, not just in Vietnam. In 2024, fiber producers are facing enormous obstacles in accessing capital as most banks have cut credit quotas or require collateral which is equal to the value of the loan.

According to the Vinatex chairman, while other countries such as China and Bangladesh maintain strong support policies for the fiber industry, Vietnam has not.

“Vietnam will lose its fiber industry without support from banks, the government, and relevant ministries and agencies,” he stressed.

Warning about the risks facing the industry, Truong said the value of new investment assets in the fiber industry is about $6 billion while the remaining value is about $3 billion, but it has to pay banks about $300 million in interest each year. With fewer bank loans, fiber firms have to narrow production, causing uncertainty in the long term as they have no money to repay debts.

Besides, the fiber industry spends about $1 billion paying salaries for 150,000 workers, and $500 million on electricity bills a year, he added.

"We need to continue supporting fiber businesses in 2024 to help them maintain production," Truong stressed.

Comments (0)
  • Read More
Vietnam's agri major Hoang Anh Gia Lai fined for bond information disclosure failure

Vietnam's agri major Hoang Anh Gia Lai fined for bond information disclosure failure

Vietnam's agri major Hoang Anh Gia Lai JSC has been fined VND92.5 million ($3,528) for failing to disclose bond-related information as required by law.

Companies - Thu, August 7, 2025 | 4:31 pm GMT+7

Northern Vietnam province accelerates $2.2 bln LNG-to-power project

Northern Vietnam province accelerates $2.2 bln LNG-to-power project

Quang Ninh province will hand over 4.9 hectares of reclaimed land to the Quang Ninh LNG-fuelled power plant project before August 11, local authorities stated at a meeting on Wednesday.

Energy - Thu, August 7, 2025 | 4:17 pm GMT+7

Vietnam's seafood firms ride profit wave ahead of US tariff hike

Vietnam's seafood firms ride profit wave ahead of US tariff hike

Vietnam’s seafood companies reported surging profits in Q2/2025, driven by importers ramping up purchases ahead of new U.S. reciprocal tariffs.

Economy - Thu, August 7, 2025 | 2:21 pm GMT+7

Le Anh Tuan appointed new CEO of Dragon Capital Vietfund Management JSC

Le Anh Tuan appointed new CEO of Dragon Capital Vietfund Management JSC

Dragon Capital Group, Vietnam's largest asset manager, has appointed Le Anh Tuan as CEO of its arm Dragon Capital Vietfund Management Joint Stock Company (DCVFM), starting from October 1, 2025.

Companies - Thu, August 7, 2025 | 2:01 pm GMT+7

Indonesia, Malaysia, Thailand expand local currency transaction network

Indonesia, Malaysia, Thailand expand local currency transaction network

Bank Indonesia, Bank Negara Malaysia, and Bank of Thailand have added new Appointed Cross Currency Dealer (ACCD) participating banks to broaden services for bilateral transactions in local currencies across the three nations, Bank Indonesia said in a statement on Tuesday.

Southeast Asia - Thu, August 7, 2025 | 12:48 pm GMT+7

ASEAN to sign MoU on regional power grid implementation

ASEAN to sign MoU on regional power grid implementation

ASEAN member states are set to sign an MoU on the implementation of the ASEAN Power Grid during the bloc’s Energy Ministers’ Meeting this October.

Southeast Asia - Thu, August 7, 2025 | 12:43 pm GMT+7

Vietnam overtakes Thailand to become world's second-largest rice exporter

Vietnam overtakes Thailand to become world's second-largest rice exporter

Vietnam has outranked Thailand as the world’s second-largest rice exporter in the first half of 2025, Thai PBS reported on August 3, citing the Thai Rice Exporters Association.

Companies - Thu, August 7, 2025 | 12:41 pm GMT+7

Vietnam posts trade surplus of $10.18 bln in 7 months

Vietnam posts trade surplus of $10.18 bln in 7 months

Vietnam’s export earnings grew by 14.8% to $262.44 billion in the first seven months of this year, while its import turnover rose by 17.9% to $252.26 billion, resulting in a trade surplus of $10.18 billion.

Economy - Thu, August 7, 2025 | 12:19 pm GMT+7

Malaysia pledges big purchases, investments with US

Malaysia pledges big purchases, investments with US

Malaysia has agreed to buy and invest over $240 billion (MYR1.02 trillion) in the U.S. to help reduce the trade gap between the two countries.

Southeast Asia - Thu, August 7, 2025 | 12:08 pm GMT+7

Vietnam's leading property developer Novaland to issue 152 mln shares to settle $229 mln debt

Vietnam's leading property developer Novaland to issue 152 mln shares to settle $229 mln debt

Novaland, a major real estate developer in Vietnam, plans to issue nearly 152 million new shares to swap more than VND6 trillion ($228.8 million) worth of bond principal.

Companies - Thu, August 7, 2025 | 10:11 am GMT+7

Vietnam's FDI capital disbursement hits five-year record high despite US tariff turmoil

Vietnam's FDI capital disbursement hits five-year record high despite US tariff turmoil

Disbursed foreign direct investment (FDI) capital in Vietnam reached $13.6 billion in Jan-July, up 8.4% year-on-year, despite U.S. tariff concerns.

Economy - Thu, August 7, 2025 | 9:57 am GMT+7

Malaysia steps up efforts to explore nuclear energy potential

Malaysia steps up efforts to explore nuclear energy potential

Malaysia’s Minister of Science, Technology and Innovation Chang Lih Kang on Wednesday reaffirmed his ministry’s commitment to enhancing cooperation with the Ministry of Energy Transition and Water Transformation (PETRA) in exploring the potential of nuclear energy.

Southeast Asia - Thu, August 7, 2025 | 8:10 am GMT+7

Indonesia's economy grows faster than expected

Indonesia's economy grows faster than expected

Indonesia's economy expanded by 5.12% year-on-year in Q2/2025, up from 4.87% in the previous quarter, exceeding the forecasts of many economic organizations, which had previously projected a rate of less than 5%, according to Statistics Indonesia (BPS).

Southeast Asia - Thu, August 7, 2025 | 8:07 am GMT+7

Philippine energy group eyes investment in Vietnam’s power sector

Philippine energy group eyes investment in Vietnam’s power sector

AboitizPower wants to invest in Vietnam’s electricity industry, especially in transmission infrastructure, said Danel Aboitiz, executive director of the corporation.

Energy - Wed, August 6, 2025 | 11:11 pm GMT+7

Vietnam seeks 8.3-8.5% economic expansion for 2025

Vietnam seeks 8.3-8.5% economic expansion for 2025

The Government has requested the State Bank of Vietnam to proactively adjust the credit growth aim for this year in line with a GDP expansion target of 8.3-8.5%.

Economy - Wed, August 6, 2025 | 10:41 pm GMT+7

Japanese investment in Vietnam shifts toward service, trade, and technology: bank exec

Japanese investment in Vietnam shifts toward service, trade, and technology: bank exec

Japanese investment in Vietnam is seeing a notable shift, with sharp increases in the services, trade, and technology sectors, while investment in manufacturing has slowed, said Abe Ryota, a senior economist at Sumitomo Mitsui Banking Corporation (SMBC).

Economy - Wed, August 6, 2025 | 4:06 pm GMT+7