Technologies digital transformation

President Nguyen Xuan Phuc (Photo: VNA)

Hanoi (VNA) – State President Nguyen Xuan Phuc praised achievements of the Boao Forum for Asia over the past two decades in his video speech at the opening ceremony of the event held in Boao city of China’s Hainan province on April 20.

The President said he hopes the forum continue being a communications channel for politicians, scholars, and businesses regarding key matters in the region.

Amid unprecedented challenges facing the world, no country could solve these difficulties by itself, the President noted.

He went on stating that only cooperation and solidarity could bring about success and join actions of nations are needed for inclusive and sustainable growth that ensures safety for the people.

Phuc highlighted a number of issues that require special attention from countries. They included promoting cooperation in disease control and prevention; ensuring opportunities to access vaccines at reasonable costs; maintaining macroeconomic stability and facilitating trade and investment; mobilising resources for sustainable and inclusive economic development towards the realisation of the 2030 sustainable development goals; and building synchronous infrastructure and developing human resources for digital transformation.

On Vietnam – China cooperation , he highlighted the two countries’ collaboration in containing COVID-19 and sustaining economic growth to become bright spots in the region and in the world.

The President affirmed Vietnam’s wish for comprehensive, effective, and equal cooperation with China for mutual benefits so that the two could together overcome the pandemic, maintain an environment of peace and stability, and push for the strong growth of their ties.

The Boao Forum for Asia Annual Conference 2021 (AC2021) is set to run from April 18 to 21 under the theme of “A World in Change: Join Hands to Strengthen Global Governance and Advance Belt and Road Cooperation”.

It consists of six modules – “Explore China”, “Understand the Changing World”, “Belt and Road Initiative Cooperation”, “Embrace the Industrial Changes”, “Dance with New Technologies” and “Development for All”./.

Short- and long-term weaknesses of painting the M&A target on select Vietnamese textile and garment producers

Nguyen Thi Tuyet Mai, general secretary of the Vietnam Textile and Apparel Association, said that foreign investors are purchasing shares and making capital contributions into Vietnamese textile companies to capitalise on the global textile and garment market. Given the impact of COVID-19 and their long-standing weaknesses, several Vietnamese textile enterprises are struggling, setting them up as potential M&A targets.

At present, Vietnam is home to 7,000 textile and garment companies. Over 80 per cent of whom are small- and medium-sized enterprises limited by a lack of capital, technology, skilled workforce and good governance. Meanwhile, foreign-invested companies are equipped with modern technology, experts, strong financial capability, and have a stable market for their projects.

Meanwhile, Vu Kim Hanh, chairwoman of the Vietnam High-Quality Goods Association said that Vietnamese textile and garment firms have yet to catch up with the digitalisation trend. Many are confused about digital marketing and online sale. Due to their small scale, local firms cannot fulfil large orders. They remain weak in design and branding, making it difficult to increase added value and raise the competitiveness in the market.

She expected that the participation of strategic investors via M&A will help Vietnamese firms address the challenges and scale up in the future.

E-Land, Korea’s first and largest integrated fashion and retail company, has been a strategic partner of Thanh Cong Textile Garment Investment Trading JSC for over the past 10 years by holding a 30 per cent stake at the local firm.

E-Land has steadily increased its ownership to 43.26 per cent to become the largest foreign strategic investor in Thanh Cong Textile, making significant contributions to improving corporate restructuring and governance. Thanh Cong Textile has seen its after-tax profit growing six-fold since E-Land’s investment.

In 2018, Japanese trading house Itochu has increased its stakes in Vietnam National Textile and Garment Group (Vinatex) to nearly 15 per cent by investing $46.9 million with an aim to turn the country into a textile export hub for Europe. Itochu is now the second-largest stakeholder in Vinatex after the Vietnamese government.

Itochu exports a little over ¥60 billion ($553 million) worth of apparel from Vietnam a year, half of which is produced by Vinatex. The company aims to raise outsourced production and exports to ¥100 billion ($922 million) by 2021.

The outlook for Vietnam’s textile and garment exports is brighter in 2021 as the EU-Vietnam Free Trade Agreement has taken effect. There is also a higher demand for “Made in Vietnam” fabrics as big brands are increasingly sourcing fabrics from Vietnam than China. The fabric prices are steadily increasing this year, improving the profit margins of local firms.

In the past two years, there have not been so many M&A deals in the textile and garment industry. The majority of buyers scooped up around 10-15 per cent stake in Vietnamese companies as an investment rather than holding a controlling stake.