Textile & Garment Industry in Vietnam
Research on Garment Producers in Vietnam International Business Research Vietnam 2008
Ms. L. Buisman Ms. G.J. Wielenga Groningen August 15th, 2008 University of Groningen, Faculty of Economics and Business
International Business Research Vietnam 2008 – Bandolera 1
Vietnam is known to have an impressive and quickly developing textile and garment industry and low labor costs. These factors make it a possible interesting and attractive market for Dutch garment and fashion brands such as Bandolera. Bandolera is a Dutch fashion brand for women of 25‐60 years. Her collections are designed with special care, made out of high‐quality fabrics and use many details and accessories to provide women with trendy clothing. For her production she is already settled in China and India and now looking for extra sourcing possibilities in Vietnam. The goal of this report is to give an answer to the main question whether it is interesting for Bandolera to produce their garment in Vietnam. From February till August 2008, the International Business Research Project of the University of Groningen contained market research in Vietnam by order of Bandolera. The research was executed by 2 selected business students of the Faculty of Economics and Business and supported by two assistant‐professors. To get detailed information on all important aspects, both desk‐ and field research was executed, of which the later took place in Vietnam (May – June 2008). To decide whether it is interesting for Bandolera to let their garment be produced in Vietnam, three requirements are of main importance. First of all, the fabrics Bandolera wants to use should be available in Vietnam and of good quality. Secondly, the local garment producers have to be capable of producing fashionable garment with many details, for low order quantities ranging from 300 – 3.000 pieces and deliver everything within 90 days in the depot in The Netherlands. Third and last of all, Vietnamese legislations should not restrain the export of garment and good logistic services of should well represented for both shipment and airmail. The fabrics available in Vietnam are mainly cotton, followed by polyester and silk. The garment sector needs up to 200.000 tonnes of cotton for its export plans. The current production does not meet more than 2% of this demand. Despite big investments by the government, the production of cotton is decreasing in the last couple of years due to low economic efficiency. The production of polyester only meets 4% of the national demand. Recently, big investments have been made in the polyester plants which should be able provide in 50% of the national demand by 2012. The silk production in Vietnam is small and still in a traditional way. Compared to Japanese silk the quality is low. It turns out that Vietnam does not have the machinery and capacity to produce silk for the industry to export. Overall, different sources confirm that the Vietnamese production of fabrics is insufficient to provide in the sector’s demand, making it dependent on import. In terms of quality, Vietnam can provide in low‐to‐mid level quality, but high quality fabrics still need to be imported from China, Taiwan, etc. It has to be noted that Vietnam is heavily investing in its fabric production capacity, but the focus is first of all on quantities and these plans also cope with many difficulties. In general, most garment companies (70%) are located in the south of Vietnam, near the harbor and airport of Ho Chi Minh City. In total we visited 17 garment companies in Vietnam. These company visits clarified that the focus of the sector is on massive quantities of low to mid‐level quality. These massive quantities are needed because the main reason for customers to go to Vietnam for production of garment is its low pricing. There are a lot of big quantities orders of low quality fabrics available for low prices, which has the interest of huge corporations mostly from the US. Although the machinery in Vietnamese factories is new and advanced, there is little market for the production of small, fashionable orders. Often Vietnamese garment producers will not accept low order quantities, because they need to keep their machines running and do not have the time to instruct the sewers on different production lines how to create many details. They realize high turnovers by producing large, simple orders for low prices. None of the companies we visited could meet all requirements of Bandolera. The Vietnamese government is promoting the export of garment and therefore there is no restriction on the export of garment and very little legislation influences the delivery times of garment orders. Next to that, logistic services in Vietnam are well represented and accommodated. However, there
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are some setbacks concerning the pricing methods. Bandolera prefers pricing on Cost & Freight (C&F), in which the producer takes care of all logistic matters until the delivery in the customers’ depot. One step down is pricing on Freight on Board (FOB), in which the producer takes care of the goods until they are on board of the ship. Pricing on FOB is becoming more common in Vietnam, but is still considered as a risky business. We have not found any producer willing to deliver orders on C&F base. Other barriers exist in the more informal aspects such as language and communication problems. These barriers make it necessary for a company such as Bandolera to, when producing in Vietnam, keep a close eye on the production to prevent mistakes and misunderstandings. Based on the requirements of Bandolera it is difficult to find a fitting garment producer in Vietnam. Vietnamese fabric plants are not able to produce middle‐to‐high quality fabrics, and often the quality is not stable. Next to supplying fabrics from other foreign countries buttons, sewing threads, interlining, shoulder pads, and other embroidery are imported as well. Due to the fact that most must be sourced from other Asian countries, the lead/delivery time of garment as well as the cost price of garment increases. Furthermore, Vietnamese garment companies are not specialized in the production of detailed, fashionable garment and also do not prefer this kind of orders. At this moment there is much competition in the textile and garment industry and there are many big quantity orders available, guaranteeing salary and employment. Because of the bad fit on two of the three investigated aspects, we can answer our main question negatively. All together, Vietnam does not appear as an interesting market for Bandolera to invest her time and energy in.
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dr. we would like to thank our assistant‐professors Mr. To do this. the international borders were officially opened and in that same year the amount of foreign investments doubled to 7. We hope you will find the information you are looking for. Nghiem Lien Huong and Mr. Many thanks for all their help.8 billion US dollars.W. we have put much effort in writing this report as clear and pleasant as possible. Vietnam has become a great potential for foreign investors because of its crude oil production. Since the adoption of the doi moi (“renewal”) policy in the late 1980s. Nguyen Thuy Vy and Ms. A last word to all readers of this report. K. Jos Langens for their help and hospitality during our stay in HCMC. without them we could not have gathered as much information as we have. and (3) the influence of legislations and the availability of logistic services. we otherwise would not have been able to find. They have guided us through many difficulties during our research and supported us with the writing of the report. Alsem and Mr. Preface
There is no doubt about it. The research was executed by 2 selected business students of the Faculty of Economics and Business and supported by two assistant‐professors. Groningen. From them we received many important additional information. its richness in natural gas reserves and its hardworking workforce with low labor costs. Finally we would like to thank Mrs. Vietnam’s economy has shown remarkable growth. we looked at three aspects: (1) the availability of fabrics in Vietnam. In Vietnam we had many help when communicating with Vietnamese companies from our interpreters. Nguyen Hong Chinh. Numerous economic progressions have transformed the centrally planned economy into a market‐based one. From February till August 2008. The results of our research are represented in this report. Vietnam is booming.” This makes it an interesting business opportunity for Dutch companies. Goal of this report is to give an answer to the question whether it is interesting for Bandolera to produce their garment in Vietnam. dr. To get detailed information on all three aspects. Lisette Buisman and Gerda Wielenga
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. Ms. During our stay in Vietnam we visited both state‐owned and private companies and held interviews with different experts and agents.J. The report in front of you is the result of the research for one of those companies: Bandolera. both desk‐ and field research was executed. T. All together. Vietnam has become one of Asia’s best economic performers and is often described as the “new China. de Boer. (2) visiting and evaluating local garment producers on capability. Enjoy! August 2008. the International Business Research Project of the University of Groningen contained market research in Vietnam for 11 Dutch companies. For all the help we received during the research and the writing of the report. Over the last five years Vietnam reached a steady average economic growth of 8 percent. When Vietnam joined the World Trade Organization in 2007. a Dutch fashionable garment brand for women. of which the later took place in Vietnam (May – June 2008).
........................................................................ 35 Excluded garment producers .......3 1.............................................................................................5 5... 21 Overview of companies..................................................................................... 7 Purpose of research and research questions............................................................................................................................................................................................................................................................................... 2 Preface Content Chapter 1 1................................ 10 Methodology ........................... 20 Export of textile and garment ................6 Chapter 6 6......................................................................................... 37 Logistics and Legislation............................................................................................................ 9 Report set up ................................................. 22 Evaluation of Garment Producers .... 391 Logistic service companies Vietnam – The Netherlands ........................................................... 21 The Vietnam Textile and Apparel Association ....................... 22 Future plans ...................................................................1 1................................................3 5............................ 391 Pricing and payment .............................. 16 Overview main domestic production of fabrics.............................................. 11 Decision Tree ..........................Content
Executive Summary..................................1 2.............................. 24 Final evaluation of garment producers........ 391 Legislation and rules about exporting garment to the EU .......3 Chapter 4 4................................................................................... 11 General methodology .................................................................................................................................................1 6............. 8 Conceptual Model............................. 35 Experts and agents...................................... 24 Description of visited garment companies and factories..............................................4 4..........................2 5............................................................................................................................................................4 Chapter 2 2..........3 4..........................................................................................................1 3..........4 5.....2 1.................................................................................................. 36 Conclusion .............5 Chapter 5 5................................................... 20 Economy .......................1 4.................................................................................. 14 The Vietnamese Fabric Market ............................................................................................... 17 Conclusion ..................................................................................... 41
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............. 16 Current situation and trends in the Vietnamese fabric market ................... 40 Informal trade barriers in the Vietnamese garment industry ...................1 5......................3 6............................................................................. 7 Bandolera.......................................................... 11 Criteria for selection of new garment producers...................................3 Chapter 3 3...................................4 4 5 Introduction................ 32 Comparisons to current producers of Bandolera................2 4..............................................................................2 6.............................................2 2...... 18 The Vietnamese Garment Industry ..........................................................................................................2 3.................
...............................1... 43 Recommendation... 48 Appendix 2 Process of Fabric Production............................. 526 Appendix 4.......................................................................................................................... Contact Details 55 Appendix 6 List of Rejected Garment Companies .................................. 46 Overview of Appendixes ...................................................6.......................................................................................................................................................................................................2 .........................................................................................................................................................................1 ........................................1 7................................................................................................................. Agenda in Vietnam 54 Appendix 5....... 47 Appendix 1 Abbreviation List...................................................................................................................................................... 49 Appendix 3 Process of Garment Production .......................................... 42 Conclusion and Recommendation ........................................................................................ 44
References ..................................................................................................Provinces of Vietnam 52 Appendix 4............................................................2
Conclusion ............................ 43 Conclusion .................................................................5 Chapter 7 7.. 62
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...................................................... 59 Appendix 7 Checklist ....................................................................................... 51 Appendix 4 Maps of Vietnam ....... Industrial zones of Vietnam 53 Appendix 5 Agenda in Vietnam and Contact Details................................. 54 Appendix 5...................................................................................................................................................2 ................................................................................................
In total.com. In relationship terms this is still short. Bandolera has 51 mono‐brand Bandolera stores and NTS shops. The production of these is still cheaper and better in Turkey then in Asia. making of patterns. followed by Belgium and Norway. P. Philosophy and market positioning Bandolera focuses on the young dynamic woman who leads an active life. For the NTS brand. The brand Bandolera is sold in 40 different countries and Not The Same (NTS. the Netherlands still takes care of the biggest part of the turnover. India and China Bandolera is already working with garment producers in Turkey. shrinkage and wear ability. The company started with establishing its own stores three years ago. more than 60% is exported to 25 countries. which is a flexible way for the styling department to keep close track of the trends and share them with Bandolera’s customers. but also take care of small problems at the scene when these occur (for instance local logistic problems). 50% is produced in Turkey. but Bandolera also has selling points in the United States (US) and Canada. the turnover rate growth was 30%. Of the total turnover of 2007. planning and supervision of production all takes place at the head office in Rotterdam. We conclude the chapter with an outline of the set up of the report. This is further illustrated with a conceptual model. 4 March 2008
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. Bandolera sells over 1. In short. Bandolera’s head of purchase (Mrs. Over 2007. Worldwide Bandolera has more than 2. Next to that. The designing.1 Bandolera
Bandolera was established in 1985 as an original wholesaler. To keep close track on fashion trends. With 40%. In this first chapter we will give more information about the company and what she is precisely looking for. Bandolera is co‐ owner of this factory. The Netherlands. Bandolera therefore needs to retain control over the whole process from designing to 1 logistics . They have the longest and strongest relationship with the factory in Ünlu. We will continue with clarifying the purpose of the research and its research questions. Bandolera offers 16 collections a year. Turkey. Bandolera has its own trend watchers who are following the international fashion scene. For Bandolera they mainly produce suits (blazers. 20% of the production of this factory is for Bandolera. including several Bandolera stand‐alone or franchised shops and several shops incorporated within department stores. Bandolera’s collection aims to create a distinctive image which is trend following. representing a yearly turnover over € 50 million (year 2007). they do not just produce the garment. Bandolera tries to combine high quality and service with a strong. China and India. One of the difficulties with finding a new
www. Their main market lies in Europe. The relationship with this factory is strong. This is mainly to check the processes and to fit the fitting samples. possibly in Vietnam. all garments are produced in Asia. Bandolera is cooperating with India and China for about 3½ years. The factory in Ünlu (Turkey) has 800 sewers. Of the whole Bandolera collection. the need for precise delivery dates and quick supply re‐orders is very high.bandolera. All materials are tested for quality.Chapter 1 Introduction Bandolera is a Dutch fashion brand for women of 25 – 60 years. trend following image. Over the last 20 years. Quality management is very important for the company. but still providing an elegant and feminine feeling. an independent coordinated casual line of Bandolera) is available in 30 countries.400 points of sale. The company is searching for new attractive sourcing places to improve her production process. Bandolera has grown to an international ladies fashion brand. Bandolera has worked with them since they started. Punt‐ Oldenhof) visits this factory together with a stylist every two weeks. while offering the possibility of multiple combinations. To keep the ability of bringing out 16 collections per year. buying of materials.
1. Sourcing: suppliers in Turkey. pants.5 million garments annually. confection).
garment producer in Asian countries is the difference in language and culture. The Asian way of doing business is not always as straight forward as the Western way of doing business. Samples that are shown by producers, for example, could be models that they do not make anymore, or even have not produced in their own factory. It has taken Bandolera 2 years to establish a real open, trustful relationship with their current producers in China and India. They visit the companies in China 2 to 3 times per year. First Bandolera visits the factory, after that the factory will send the samples to the Netherlands where they will be checked on fit size. The factories in China are in Hongzou, ShangHai, Beijng and Hong Kong. They have the fastest delivery times and have the most and newest materials. The factories in China and India usually have about 50/100 sewers. A lot of jackets are produced in Asia. For the fitting of the garment from Asia, the samples are flown in by air. Fitting ladies in the Netherlands will check if the sizes are correct. After that the samples are sent back to the factory. The usual process is that samples from Asia are sent forth and back by air, while the real production order is shipped over sea. This is necessary to catch the deadline of total delivery time of 90 days, but also results in € 400.000 ‐ 500.000 UPS costs per year. The total delivery time of 90 days is very tight and important for Bandolera to be able to bring out 16 collections per year. These 16 collections per year mean that they offer a new collection every 2/3 weeks. Therefore the first delivery time is usually the tightest and is sometimes send by air. In general, orders are placed per size and per color. Sizes range from 36 – 46. The average quantity per model of an order from Bandolera is 1.500 pieces (with ranges between 300 – 3.000 pieces, with pikes to 200 or 5.000 pieces). This order size does not differ over the different product groups (pants, blouses, etc.). Patterns are designed by Bandolera and send to the producer digitally. Future plans In the first half year of 2008, 20 new mono brand stores are opened in the Netherlands, Belgium, Germany, Poland and Turkey. The brand has also announced a new start in the United States. Bandolera hopes that the development of activities in the US will lead to an important contribution to a quick growth of the company worldwide. In the second half of this year another 20 stores are planned to open. As every company, Bandolera is looking for new ways to improve its production process. Because of the great development of the textile industry and the low labor costs in Vietnam, Bandolera is hoping for a new sourcing place to support its future plans.
Purpose of research and research questions
The purpose of this research is to provide Bandolera a solid report on base of which Bandolera will make a well‐considered decision whether to produce garment in Vietnam. At the same time the report will provide practical information about doing business in Vietnam (i.e. governmental laws and policy with regard to production and export of garment), which is relevant for Bandolera when she decides to enter the Vietnamese fabrics and garment market. We are looking for the opportunities for Bandolera to produce middle‐to‐high quality garment in Vietnam. Main aspects are whether fabrics are available in Vietnam (homemade), investigating which producers are able to produce the required garment of Bandolera, and also enquire practical things which are concerned with entering the Vietnamese market. The above mentioned leads to the following problem statement: Is it interesting for Bandolera to produce their garment in Vietnam? To answer this question, we divided the subject in 3 main research questions (RQ). Each of them is divided in several sub questions (SQ) which we will try to answer in this investigation. The research questions are also summarized in a conceptual model at the end of this paragraph. RQ1 What is the availability of fabrics in Vietnam? This research question provides insight in the different kinds of fabrics (yarns, fabrics, accessory, embroidery) used for production of garment products of Bandolera. Bandolera has provided the research time information about the characteristics of the different kinds of yarns and fabrics which are used in their production/fashion line. Also an overview is given about the fabrics that are available in Vietnam, which of these are homemade and which of these are imported.
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SQ1.1 What kind of fabrics does Bandolera in general use for the production of her collections? SQ1.2 What kinds of fabrics are available in Vietnam (divided by homemade fabrics and imported fabrics)? SQ1.3 What is the delivery time of the homemade and imported fabrics? SQ1.4 How can fabrics in Vietnam be characterized in terms of quality compared to surrounding exporting Asian countries? RQ2 Can Vietnamese garment producers meet the selection criteria provided by Bandolera? This research question provides insight in the Vietnamese market of fabrics and garment producers. An extensive list of Vietnamese textile and garment producers will be put together. A checklist is used to evaluate each producer whether it is an interesting company for Bandolera to do business with. This checklist uses grades to assess for example the capacity, quality, references and the level of English of the local producer. The companies with the most potential are visited in Vietnam and again evaluated with a checklist of criteria. Contact information of the visited companies is included in Appendix 5.2 of this report. SQ2.1 Which local producers are advised to us by our contact persons? SQ2.2 Do Vietnamese garment producers have the capacity, machinery, experience and certificates to produce for Bandolera? SQ2.3 Are Vietnamese garment producers able to produce fashionable garment products similar to the current Bandolera collection? SQ2.4 Are additional items and accessories (such as buttons and YKK‐zippers) available in Vietnam? SQ2.5 What is the production time and estimated price of counter and fitting samples? SQ2.6 With which lead times and payment terms for complete orders do Vietnamese garment producers in general work? RQ3 Which Vietnamese legislations and logistic services influence the export of garment to The Netherlands? This research question provides insight into the practical execution of the research in the case that Bandolera wants to do business with a Vietnamese producer. SQ3.1 What do Vietnamese legislations specify about the export of different kinds of Vietnamese garment products to the EU? SQ3.2 Which local producers are available to facilitate in matters of logistics? For example, are Western companies such as UPS/DHL represented in Vietnam? SQ3.4 What are the costs and delivery times of logistic services from Vietnam to the Netherlands? (Airmail and shipping?)
To mark the boundaries of our research, we created a conceptual model (see figure 1.1 below) in which we simplify the Vietnamese textile and garment market. The conceptual model represents the main concepts and their relationships which are of significance to Bandolera and about which we collected information. The model can be read from left to right, divided in three parts. Starting at the left side of the model, we begin our research with the availability of fabrics, yarn and accessories (RQ1). The second ‘column’ focuses on the Vietnamese production lines (RQ2). The third column represents the subject of RQ3 where the influence of legislations and the availability of logistic services are attended.
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Fabric Yarn Accessories
Sample(s) Production lines Order
Airmail Bandolera Shipment
Report set up
The report is divided in 7 chapters, of which the first gives an introduction of the purpose of the research. In chapter 2 the general methodology and the specific manner of data collection is described. The 3rd chapter describes the availability and quality of fabrics and fabric production in Vietnam. In chapter 4 we give a description of the general Vietnamese garment industry with current statistics and future plans. Chapter 5 gives an overview of the relevant company visits, compared with Bandolera’s current suppliers and some main conclusions about the availability of potential garment producers in Vietnam. In the 6th chapter we give more information about logistics and legislation concerning the export of garment from Vietnam to The Netherlands. We end the report with conclusions and recommendations for Bandolera in chapter 7.
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export experience and certificates (ISO) of the company will give details about the company’s business. Because the quantity of Bandolera orders lie within the range of 300 – 3. The focus was on the areas in or nearby the centers of both cities. We also received information from Mr. A first selection of garment producers was made through the use of 5 different lists2 of garment producers. knitting machines. Machinery: The kind of machinery that is used in the factory shows what skills the company has inside and which kind of activities they have to outsource. the desk research in the Netherlands and the field research in Vietnam. machinery.1
The research was conducted in two phases. Binh Duong (and Long An). one in HCMC and one in Hanoi. Based on the information in these profiles. With both contact persons we made appointments in Vietnam. Data collection: During the interview questions are asked about the capacity per model. it is more important whether they can make 10. though which we reached two old PhD‐students. These criteria are demands Bandolera sets for all her producers and which producers should be able to fulfill. Through this way we reached out to 80 companies. we received information from Mr.000 pieces per month (minimum requirement). In Hanoi this contained the province Hanoi and some surrounding provinces.500 pieces. The desk research was executed from February 2008 till May 2008. During these visits the criteria discussed below were checked. the number of workers in the factories and the number of production lines.000 pieces. the size of current orders.2
Criteria for selection of new garment producers
Bandolera provided the research team with criteria selections to search for potential suppliers. weaving looms. a telephone call was made to get in contact with the companies. Vrieswijk about their experience with export and logistic matters from Vietnam to The Netherlands. sewing machines and embroidery machines show which kind of fabric and garment can be made. The average per model is 1.Chapter 2 Methodology
2. Westland and Mr. In this part of the research information about the Vietnamese textile and garment industry was collected on the internet. it is important that producers are able to produce these small orders. Marsman about his experience with importing garment from Vietnam. In this part of the research data was collected through interviews with garment producers and experts. A different way to get more knowledge about the Vietnamese textile and garment industry was to build relationships with useful contact persons and experts. the presence of spinning lines. of which 20 responded and 17 appointments were made. and through company and factory visits of selected garment producers. dyeing machines. the capacity per month or year of the factories. Below.
See references Chapter 8
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. From the 5th of May 2008 till the 06th of June 2008 field research was executed in Ho Chi Minh City (3 weeks) and Hanoi (2 weeks). In total we were able to build relationships with 11 contact persons and experts who lead us to 17 possibly interesting companies. the criteria and how these are evaluated during a company visit are discussed. These producers were e‐mailed and if no response was received. In total we visited 17 companies and interviewed 7 contact persons or experts. For example. In HCMC this contains the provinces Ho Chi Minh. companies were selected for a company and factory visit. Company profile Capacity: The maximum capacity of a producer is not very important. which can be used to make price comparisons. These are usually displayed in the company’s profile.
2. Of these we were able to contact 11 companies. In desk research phase of the research we were able to get in touch with 5 contact persons and experts in Vietnam and 3 in The Netherlands. at least within 2 hours driving. General criteria such as the capacity. In the Netherlands. Furthermore we found two theses. We also got in contact with the University of HCMC and a Dutch garment producer that has been active in the Vietnamese garment industry since 1986.
because Bandolera often uses her own dyeing colors. The brands of these machines are written down. (3) keeping adequate records. with appropriate and corrective action where necessary. (2) monitoring processes to ensure they are effective. questions will be asked about which kind of fabrics the companies work with and where they get there fabrics from. (4) checking output for defects. It is a bad signal if there is. blouses. because then they are not familiar with the process of exporting and dealing with English speaking customers. questions are asked for which customers they produce and to which countries they export. Data collection: When visiting the companies. The ability to work with foreign countries also becomes clear in how well the communication is going during the interview. In a later stadium. The processing of good fabrics is more complex. labels of garment are checked for familiar brands. then these will be separate divisions with a different manager you have to deal with. Every factory is usually specialized in one product group. While walking around in the factory and looking at samples in the showroom. Some of the requirements in ISO 9001 include (1) a set of procedures that cover all key processes in the business. ISO 9001 and SA 8000 certificates. it takes at least a few days to cross the border. The focus thus lies on good quality fabrics. not at the budget‐end and also not at the high‐end price level. Next to that it is important to check what kind of machinery they have and use. We check this by judging the grade of English of the contact person and whether or not it is necessary to use a linguist ISO norms: The ISO 9001 certificate is a standard to check the organization of the company. take pieces of fabric and we also ask if quality of the fabrics is stable. Some companies use the ISO 9001 certification as a marketing tool. ISO 9000 is maintained by the International Organization for Standardization and is administered by accreditation and certification bodies. If factories make many different product groups. The producers have to be able to show with what kind of fabric they are working with and can find. fabrics should be available in just a few days. Data collection: During the interview. Strong requirement is that producers work with middle‐to‐high quality fabrics and can supply these fabrics. Another important aspect of fabrics is the quality. jeans. they stress on precise delivery dates and quick supply re‐orders. Export experience: The experience of Vietnamese companies with exporting to western countries (preferably they export to the EU. The quality Bandolera is looking for is middle price level. high quality. Therefore we ask questions. t‐shirts. therefore fabrics have to be dyed specially for Bandolera´s production. If fabric has to be imported. Garment Bandolera is looking for the production of all kinds of product groups. Because delivery times are short. it is also very important that the quality of the fabrics is stable. Usually certificates like ISO are publicly displayed. They almost never have fabrics in stock. for example. ISO 9001 certification does not guarantee that the company delivers products of superior (or even decent) quality. etc. Bandolera starts her process of designing a new collection with the fabric. what explanation this has. To have short delivery times. The fabric is the first input and with this fabric they design a new model. It just certifies that the company engages internally in paperwork prescribed by the standard.Data collection: When visiting the factory. (5) regularly reviewing individual processes and the quality system itself for effectiveness. When asking about the delivery times of the fabrics. machines are checked whether they are fully used and if not. The only garment product group Bandolera is not interested in is underwear. these fabrics can be re‐checked for quality by Bandolera. But if they can make blazers. but the use of it should not be overestimated. and (6) facilitating continual improvement. this is difficult to check. Fabrics In the research we search for all kind of fabrics and garment.
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. ISO 9001 is one of the standards in the ISO 9000 family of standards for quality management systems. Next to that. the focus lies on fabric from scratch (before the dyeing takes place). preferably. fabrics should be produced in Vietnam and not imported from China. Therefore Bandolera is searching for special fabrics of good to. Because Bandolera works with a tight schedule. they usually also are able to produce blouses. Producers that do not already export are not potential. Bandolera mostly uses its own colors. but if not they should at least export to the US). questions are asked about the presence of ISO 9000. a layer of dust on the machinery. Data collection: In the interview. for example they are only specialized in making jeans. not cheap ones.
Important delivery times are the delivery times of the fabric. but also the zippers and the buttons. These are the only zippers which can be guaranteed to work correctly. Data collection: When visiting the factory. Therefore the products are very labor intense. the samples are delivered/send by air. Furthermore it is important to ask for a sample book of the buttons the company is working with. if they have their own laundry and also if they are able to print digitally sent patterns. Pricing on FOB base means free on board. Accessories Not only the fabrics should be available. the products can be flown in by air but the question is if this is affordable. Data collection: Different questions are asked about the delivery times during the interview. Zippers have to be from the brand YKK. The experience of Bandolera with Asian suppliers is that they usually do not charge costs for the first sample. this means that the producer will deliver until the Vietnamese border. Furthermore questions are asked about which brands of yarn. During the visiting of the factory. This sample should be without costs. Producers have to already be familiar with the kind of garment products that Bandolera is looking for. It is a prior requirement that they work with YKK zippers. Bandolera requires C&F pricing. we also ask for an estimation of the production price. Furthermore we ask if they have a separate sample room and if yes.Bandolera collections are not simple. The making of the first sample (proto‐type) usually takes 21 days. A good brand for yarn is COATS. Usually every producer has its own brand and there is no well known brand of buttons. Before a whole order is placed. If the delivery time cannot be handled. Interesting is whether Vietnamese garment producers are specialized in one specific garment group and if this fits with the Bandolera style. we check with what kind of machines the embroidery and prints are made. shoulder pads and workmanship. After this the proto‐sales take place in about 2 months. Data collection: As mentioned most companies specialize in one kind of product group. within which the garment should be delivered in stock in Rotterdam.
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. what is the capacity and the number of employees working there. The making of the first sample (the proto‐type) usually takes about 21 days. With blazers it is important to ask what kind of shoulder pads they use. interlining and shoulder pads they work with. Delivery times The lead time of Bandolera’s production order has a maximum of 90 days. They arrange all distribution within the Netherlands. Some embroidery has to be done by hand. Samples For fitting of the garment from Asia. Usually the costs of these samples should be about 150% of the production price. but this can also be copied. but mainly have detailed and complex designs. Therefore all logistics from producer until the Netherlands should be arranged by the supplier. which they can produce and which they produce at the moment. this includes freight until Bandolera’s stock in Rotterdam. it should be possible to ask whether a B‐choice (a rejected product) can be given to us. There are different prices in which deals and contracts can be made. The buttons Bandolera is working with varies with the season. Best would be to get a sample book of buttons. A good tool to judge a company is to check whether they understand the product specifications of Bandolera. For embroidery and prints we ask whether the company can make them in their own factories or if they have to outsource them. they should not have to develop it. Bandolera asks for 50 salesroom samples. shoulder pads interlining they work with. Before a whole order is placed. The samples of Bandolera will be demonstrated at the end of the interview. Bandolera asks for 50 salesroom samples. Pricing on CMPT base only includes the price of total product. On average it takes 2 weeks (14 days) to produce the fabric and 4 weeks (28 days) to ship the garment. sewing thread. Data collection: During the interview questions are asked with what kind of accessories the company is working. When looking at samples in the showroom it is important to ask whether they made a production order of these samples and if this took place recently. That leaves 48 days to finish the garment. inclusive fabric. In the Netherlands. buttons and sewing of the garment. Producers should be able to show what kind of buttons. Bandolera works with the logistics company Unique Logistics. Important is what kind of garment the company is specialized in. We will use these to ask them if they can make similar garment and if yes. When visiting the factory and judging samples from the showroom a better insight can be given of the quality of lining.
From left to right these pink boxes relatively represent the research questions 1‐3. To give a positive answer on the main question.
2.of the proto‐type and also that of the total production order.
International Business Research Vietnam 2008 – Bandolera 14
. pricing and exporting. all questions in the pink boxes below should be answered with a ‘yes’. Furthermore we ask questions about the manner of logistics. The tree is divided in 3 hierarchies. The answers given on these questions depend on the information found about the questions in the green boxes in the lowest level of the tree.3
To give an answer to the main question whether it is interesting for Bandolera to produce their garment in Vietnam. we created a ‘decision tree’ (see below). These usually are expressed in CMPT. FOB and C&F prices. depicted with 3 different colors.
Decision tree research Bandolera – ‘Is it interesting for Bandolera to produce their garment in Vietnam?’
International Business Research Vietnam 2008 – Bandolera 15
The largest foreign investor in the Vietnamese textile and clothing industry is Taiwan.284 4.784 5.300 2.357 The textile and clothing industry has also managed to attract a substantial amount of foreign investment. In the weaving sector the industry added 6. Compared to the 1. fabrics and garment accessories. However.720 Open‐end Rotors 19. of which 1.000) Import/Year 2000 2004 2006 Fibers.000 Machinery investments – Investment in modern machinery has increased in recent years.089 3. Therefore the production of fabrics at the beginning was poor. fabrics and garment accessories. yarns.784 open‐end rotors were obtained. fabrics and garment accessories reached 4.just‐style.012 shuttle less looms during 1997‐2006. Table 3.722 million USD in 2006. These massive quantities and the economic growth in general have helped the Vietnamese garment industry to expand (and keep expanding) rapidly.954. 9 June 2008
International Business Research Vietnam 2008 – Bandolera 16
.954 million USD.1 we start with an overview of the current situation and trends in the Vietnamese fabric market.
3. “Vietnam did not export garment until there was an open policy in 1986.com. The Vietnamese government has a clear strategy of increasing the supply of domestically produced inputs such as raw cotton.089 million USD worth of imports in 2000. During 2006 the industry added 171.2 Machinery investments per year (US dollars) Investments / Year 1997 ‐ 2006 2005 2006 Spindles 840.722 Fabrics 761.284 million USD worth of these imports in 2000. The most important import item is fabric. which is more than double the 2. the imports of cotton. In this chapter we give insight in the availability of fabrics in Vietnam. when 840. the production started to increase bit by bit. Fabric imports rose in value by 288 percent over the six‐year period. Fabric and accessories 2. Table 3. looking at the total foreign direct investment (FDI)
http://www. As explained more clearly by Mr. We end the chapter with a conclusion in which we give answer to research question 1.840 Shuttle less Looms 6. In 2004 the value of imports of fibers.2 which shows that Vietnam is moving towards more modern manufacturing technology. But the production is mainly for massive quantities. yarns.012 476 1. followed by South Korea and Hong Kong. These figures are summarized in table 3. Vietnam’s 3 overall aim is to reduce the import content to less than 25 percent by 2010 .720 new spindles and 5. Bandolera is looking for all kinds of high‐quality fabrics. yarn and fabrics 1.132 171. In paragraph 3. This followed an extended period of expansion during the ten‐year period of 1997‐2006. In 2006 fabric imports were worth 2.1
Current situation and trends in the Vietnamese fabric market
The Vietnamese textile and garment industry has long time been under influence of the communistic system. yarns.2 we will discuss the fabric production of three main fabrics in Vietnam. yarn and fabrics tripled to 3.357 alone were added to the industry's capacity in 2006 following the addition of 476 looms in 2005. After the open policy.132 spindles and 19. Yarn.840 open‐end rotors. compared with only 761.3 million USD in 2000. dollars (USD). In paragraph 3. Currently Vietnam still relies on substantial imports of fibers.Chapter 3 The Vietnamese Fabric Market
As mentioned in chapter 1.S. which are needed because the main reason for customers to go to Vietnam for production of garment is its low pricing”.1 Import value per year (US dollars x 1.601 million U.601 Cotton. Its current situation and the trends in the industry are influenced by their relatively late international start. upon which Vietnam's garment industry is heavily dependent. Toan (owner of Yen Bien Company in Hanoi).
19 May 2008 8 th www. The main cause of the continuing shrinkage in the cotton acreage is its low economic efficiency. The Dak Lak province for example. These plans have great difficulty reaching their goal. informed us that cotton is the main fabric available in Vietnam.in Vietnam. At macro scale.000ha. This is a year‐on‐year rise of almost 39 percent5.S. Cotton Three out of the four agents and experts we interviewed. The garment sector’s demand is about 160. Most of the foreign investments are made in Vietnam’s crude oil fields and the Vietnamese finance and banking industry4. the sector spent 5.000 tonnes of cotton and needs up to 200. the supply of polyester fiber produced by foreign‐invested and private factories nationwide only meets around 4 percent of the Vietnamese demand. owner of apparel agency/supplier Indo Pride International in HCMC. owner of Yen Bien Company in Hanoi). To realize this goal. which should produce approximately 80. Vietnam’s cotton acreage has been reduced in 2008 to 6.000 tonnes. followed by polyester and silk” (Mr. At present (2008). the polyester production in Vietnam is increasing and big investments are made.5‐4 million Vietnamese Dong (VND) to invest in 1ha of cotton to yield a ton of seeds and earn just 3 million VND. The Trade Information Center estimates a 1. On the question where to find fabrics in Vietnam.000ha by 2010. Meanwhile. Toan. However. according to the report of the Voice of Vietnam (VOV).000 ha and only produces 2. we received the answer from Mr.000ha to 50.600 tonnes7.S. On average.vn. the Vietnamese Textile and Garment Group (VINATEX) set its mind to create 45.000 tonnes for its export plans. Farmers are selecting other short‐term cash crops of higher economic values to grow. they can earn up to 10 million VND.com. In the meantime.600 tonnes therefore doesn’t even meet more than 2 percent of the garment sector’s demand. most fabric is to be found in South Vietnam.3 billion U. dollars from exports in 2007.000ha in 2003.7 billion U.com. Below we will discuss the production and availability of these three types of fabrics in Vietnam separately.vietnamnet.000ha in 2004 and still decreased after 2004. 4.peopledaily.
3. Despite these difficulties. 19 May 2008 7 th http://english. the demand for cotton has increased drastically.” Different sources have independently informed us that “the fabrics available in Vietnam are mainly cotton. cotton growers need 3. 10 June 2008 6 th http://english. They plan to meet 15‐20 percent of the national demand for polyester fiber by 2009 and 50 percent by 2012. Manning. 10 June 2008 th http://english. The current production of 2. the garment sector copes with a chronic shortage of materials for its production. the acreage has downsized from 16. Dak Lak.000ha in 2002 to 9.S. The VINATEX and
http://www. The 2001‐2010 cotton development program has been set up to expand the cotton acreage to 150. such as maize and soybeans rather than cotton.vn.com. when they grow maize. Quang Ngai and Dong Nai provinces8.vietpartners.vinatex.000 new hectares of cotton growing area by 2010.vietnamnet. 19 May 2008
International Business Research Vietnam 2008 – Bandolera 17
. they developed cotton plantations in Ninh Thuan. Due to the rapid development of the Vietnamese garment sector. dollars export of Vietnamese textile and garment during the first 4 months of 2008. He informed us that “all fabrics can be found within 2 hours drive from HCMC.cn. which yields 5 tonnes/ha. In 2004 the Vietnam Cotton Company even proposed that the government should stop cultivating cotton in the flood‐prone Mekong River delta and adjust the cotton acreage from 80. Garment experts say that to earn 7. However.7 billion U. Binh Thuan. The VINATEX and the Vietnam National Oil and Gas Group (PetroVietnam) recently have jointly poured over 125 million USD into the development of facilities for producing polyester fiber from petrochemical products at the Hai Phong‐based Dinh Vu Industrial Park. has a large acreage under cotton cultivation in the Central Highlands.000‐50.2
Overview main domestic production of fabrics
The Vietnamese export of textiles and garment continues to grow. the textile and clothing industry only gets a very small piece of it. The cotton acreage has been shrinking year on year. dollars importing raw materials6. Polyester/synthetic fibers According to different news articles.
Many shops sell garment. ‘White yarn/silk’ costs about 150. Cocoons are sourced from the Ha Dong province: Dan Phuong (Hoai Duc). now has 730 households with 1. The question is “What kind of fabrics are available in Vietnam? Which are produced domestically and which have to be imported?” Concluding from the information as described in this chapter we can conclude that most common fabric found in Vietnam is cotton. but this market is very narrow. but there is not much and the quality is worse than that of competing. Sub question 1.600 people earning a living by weaving silk. The most popular and biggest village was and still is Van Phuc. the craft village can create more than 1. Fabric made of 50% silk. but still in a traditional way and of low quality. Their capacity is 15 million meters fabric per year with 1. make 4.6 million USD and make up 63% of the commune's economy each year.1 (What kind of fabrics does Bandolera in general use for the production of her collections?) has been discussed in chapter 2. Vietnam’s province Ha Tay.000 VND (9 USD) per meter. spandex and viscose.3
The first research question considers the availability of fabrics in Vietnam. owner of Yen Bien Company in Hanoi. There is a small silk production in Vietnam. it is important that the quality of the fabrics is stable. Vietnam does not have the machinery and capacity to produce silk for the industry to export. Silk The Vietnamese silk production has a long history in which Vietnamese silk was produced locally for royal families or people of rank. The sub question 1. of which most is exported to surrounding Asian countries. He told us that “Taiwanese and Malaysian manufacturers produce polyester in Vietnam but only for reason of export. Japanese silk has higher quality because they have thinner yarn and better machines. Silk from the Van Phuc village is not exported for commercial ends. in Vietnam you can find “…some silk. was known as the biggest and oldest silk production centre in Vietnam. surrounding Asian countries.PetroVietnam have called for foreign investors to build three polyester fiber factories in southern Dong Nai and Binh Duong provinces.000 jobs each year9. Furthermore. He told us that. Plus it’s more difficult to put on a role. In Vietnam the company is well known for its production of polyester fabrics. The village stocks a wide variety of silk products. but their fabric is expensive in local terms.
3. There is some production of polyester and silk. Thai Tuan is a well known fabric producer in Vietnam (mainly for polyester).e. In this conclusion we try to answer this question and its sub questions. In high peaks in the business the delivery can take about 70 days. These findings were in line with what we already heard during our interview with Mr.2 discussed the availability of fabrics in Vietnam. and ships goods all over Vietnam. which is more expensive because more cocoons and more labor are needed for production. plain from polyester. Thai Tuan supplies a variety of fabrics. They specialize in producing jacquard. The delivery time of their fabrics is 50‐60 days by ship. Given that each power‐loom generates one weaving job. In the village we visited 2 homes where we were showed the process of making silk and the silk market. We visited Van Phuc on the 3rd of June.” We visited the Thai Tuan Textile and Garment Corporation at the 9th of May 2008. 10 km south of the centre of Hanoi. The average Vietnamese does not buy silk (to expensive) and the silk is not as fine as that from Japan or even as that from china. We received more information about the production of polyester from Mr. as well as exported overseas. All fabrics that can’t be bought from the local market are imported. This concerns the thicker silk. ties.343 households in Van Phuc commune take part in the craft.5 meters (is 9 roles of yarn) per day.vietnamnet. Their product capacity is not high. Bandolera design process starts with special fabrics of preferably high quality.500 workers employed. Statistics show that 785 of all 1. using technologies transferred from Japan and the EU. Manning (owner of apparel agency/supplier Indo Pride International in HCMC). and other accessories.vn. Van Phuc Village. Toan. We took different samples with us to give Bandolera insight in the Vietnamese level of quality. 27 May 2008
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. they can i. This certainly counts for high quality fabrics
http://english. 75% silk or 100% silk is priced depending on the quality of pattern and fabric thickness. Silk sales generate about 1.
Korea. Sub question 1. In general the delivery time of fabrics imported from China. The information we conducted during our literature study as well as the information we received in Vietnam self points to a low‐to‐mid level quality fabrics. high quantity fabrics is much bigger than the request for special fabrics of good quality. Taiwan. the time to produce them is on average 21‐28 days. Vietnamese fabrics are of lesser quality.which still need to be imported from countries like Thailand. etc. etc is 4‐10 days if the fabric is available. We have little information about the delivery time of domestically produced fabric.
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. Furthermore. Compared to surrounding Asian countries. Although Vietnam is heavily investing in its fabric production capacity.3 discussed the delivery times of the fabrics. compared to the surrounding exporting Asian countries. Taiwan. but the best estimation is about 2‐5 days if the fabric is available. the demand for low quality. Vietnam cannot compete with countries such as China. When companies also produce their own fabrics. Taiwan or Japan. these still face many difficulties and the market is unstable. The last sub question focuses on the comparison of the quality of fabrics produced in Vietnam. Although the government plans to expand the production of fabrics with incentives the production of cotton is decreasing due to low economic efficiency. Information about delivery times were received during company visits. In terms of quality.
labor costs are becoming more competitive. However the WTO brings opportunities to enter markets of all countries. Given the current trend of economic globalization and integration of countries around the world. and labor skills. Over many years.000 companies who have in total more than 2 million workers. Besides this. the competition is hard in gaining market share. Vietnam textile and garment industry has witnessed strong development.6 a short conclusion will be given about the Vietnamese garment industry.4 and 4. The first is the transition of central planning to an open‐market system and the second is the increasing integration between regions and countries by becoming a member of the Association of Southeast Asian Nations (ASEAN).vn/biz. Vietnam actively participated in all activities of this organization and step by step integrated into the regional and global economy for the benefit of the country (and region). this chapter focuses on the Vietnamese garment industry.1
Over the last many years.
www. On the other side. The export values increased rapidly.com. The industry employs a large labor force. Many enterprises are member of the VITAS: a non‐governmental umbrella association working in the field of textile and garment industry in Vietnam. and this sector is one of the industries that is for many consecutive years ranked very high in terms of key export products. There are many workers in this sector. thanks to the above mentioned factors and the political stability. The industry counts near 2. and therefore competition among the exporters is becoming tougher. Vietnam became a member of the Association of Southeast Asian Nations (ASEAN). Products made in Vietnam have penetrated to the world market.english.1 we give a general overview of the Vietnamese economy. However. 5 June 2008 th www. In general there are two major factors which contribute to Vietnam’s remarkable performance.vietnamnet. In 1995.3 we give a rough overview of the textile and garment enterprises settled in Vietnam. Their roles and future plans will be described in paragraphs 4.Chapter 4 The Vietnamese Garment Industry
With a good insight in the Vietnamese fabrics industry.5%11). They are not restricted anymore by export quota’s (quantity restriction). In that period all tariff on textile and garment products is down to 0 – 5% only. In 4. it could be possible that in future labor costs are getting less important when there is more demand for technical skills. the industry continuously invested and changed equipment and technology to meet the market demand and to improve its competiveness.iht. In paragraph 4.
4. thus it was contributing to the economic development of the country. Vietnam (and other developing countries) has to cope with many difficulties: it is currently less developed in terms of machinery and equipment. On 1 January 1996 Vietnam officially joined the Commonly Effective Preferential Tariff (CEPT) and implemented the AFTA with the roadmap of ten years (1996 – 2006). so companies compete with each other to get (the best) workers.2. In 4. nowadays economies of scale play an important role in all of these activities. The Vietnamese textile and garment industry made significant achievements. This paragraph is followed by a focus on the export of the textile and garment industry in 4.5. Other difficulty is the high inflation (2007: 16%10) and economic growth (2007: 8. These 2 factors are strongly related to each other. with low labor cost. Vietnam’s accession to the WTO on 11 January 2007 brings significant opportunities to the garment exporters. the government of Vietnam took bold reform measures to promote the economic development of the country. 5 June 2008
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. Thanks to the open door policy. technology. ASEAN Free Trade Area (AFTA) and the World Trade Organization (WTO).
351 0. In the North are (near Hanoi) 10% of the companies located. It was particularly strong in 2003 at 33% and in 2002 at 40%.5% to the country’s export turnover for the year of 2006.9 Vietnam Textile and Apparel Association.747 29.3 2003 3.752 40.8 billion in 2005 to USD 10 billion. Vietnam’s textile and garment industry plans to achieve these targets by streamlining production and thereby reducing unit costs to boost international competitiveness. Vietnamese exports soared by 20.838 10. The remaining enterprises are (foreign) investment projects and joint ventures.3
Overview of companies
As mentioned before there are on average 2.654 2.654 32.3 2000 1. joint stock companies. with the result that buyers returned to Vietnam.0 2005 4. p.7 2002 2.8 2004 4.just‐style.2 Textile and Garment Export (by market)13
2006 2005 2004 2003 2002 EU 21% 16% 18% 18% US 52% 56% 57% 55% Japan 11% 13% 13% 14% Others 16% 15% 12% 13% Total USD (million) 5.2 an overview is given of the export divided to several markets: EU. Quality – Credibility.834 million. In 2006. or other countries.4.3 1998 1. In Table 4. the industry contributes 8. 5 billion USD or 16.836 3. 4 June 2008 (article of 8 August 2007)
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.3 2001 1. Directory 2006. With nearly 2 million people involved. US retail buyers therefore turned to countries such as China and India for their clothing.962 3.2
Export of textile and garment
In short. In Appendix 4 a map of the provinces of Vietnam is attached. Table 4.892 8. In Vietnam are 50 state‐ owned companies. At the same time it hopes to double the number of people working in the industry from 2 million to 4 million workers. the textile and garment sector has made a remarkable contribution to the economic development of Vietnam.349 17. In table 4.6% to USD 5.
Vietnam Textile and Apparel Association. The removal of quotas boosted US demand for Vietnamese clothing.834 4. As mentioned before Vietnam joined the WTO in 2007. especially for lower‐end products. On the way towards achieving its 2010 objective. As a result. US. but imports from Vietnam into the USA ‐ Vietnam's largest export market ‐ were still subject to quotas. the USA implemented safeguard quotas on several categories of Chinese textiles and clothing.6
Export growth since 2001 has been steep.000 textile and garment companies in Vietnam.3 an overview is given of the companies split up by locations or by product categories. This was due mainly to the fact that quotas restricting imports from other Asian countries were eliminated at the beginning of the year.838 4.752
Vietnam plans to double the value of its textile and garment exports from USD 4. according to a new report by Textiles Intelligence.1 an overview of the total textile and garment export of Vietnam is given.386 20.
4. In table 4. the industry has set an export target for 2007 of USD 7 billion14. and private companies (on average 1. Japan. Table 4. 2007 14 th th www. Especially in the South of Vietnam (near HCMC) most enterprises (70%) are established.com.834 20. and the USA was obliged to remove all quotas on textile and clothing imports from the country.3 2006 5.1 1999 1.2% to Vietnam’s industrial value. the others are limited liability companies. however. and in the rest and Central Vietnam the other 20% are established.1 Total Textile and Garment Export 1997 – 200612
Value (USD million) Growth rate (%) 1997 1. but growth slowed in 2005 to just 10%.500).
like less hierarchy. Furthermore. between members. In state‐owned companies the decision‐making is rather slow. and that there is much more hierarchy than in private companies. In these enterprises there is more decentralization. 200 million pieces of garment. The government has also identified three other aims for the industry:
Vietnam Textile and Apparel Association.000 tons of spun yarn. faster decision‐ making process. One of the biggest members of VITAS is The Vietnam Textile and Garment Group (VINATEX). That is a main reason why companies have subcontracts and why they are more dependent of each other.
4. and 15.3 Number of enterprises (updated 2006)15 By location By product categories Ho Chi Minh City 1090 Materials and spinning 96 Hanoi City 157 Woven 382 Dong Nai province 142 Non‐woven 6 Binh Duong province 116 Garment 1446 Long An province 27 Accessories 35 Da Nang city and surroundings 55 Services 265 Others 364 The main difference between state‐owned companies and private companies is the decision‐making process and the size of the company. Many garment factories cooperate with another factory. In the next paragraph those plans are described.Table 4. VITAS represents its members and consults the State and Government bodies that are relevant and comforting policies and mechanisms relating to the development of the Textile and Garment industry in Vietnam. To achieve those goals the government came up with two main policy objectives: (1) shift the focus in garment manufacturing from CMT (cut. and having the possibility to decide on your own. They have ‘subcontracts’. Quality – Credibility. These members account for 70% of the total capacity of the industry. 250 million square meters of fabrics. The VITAS is representing the Vietnam textile and garment industry in international organizations and tries to be a bridge of cooperation between the domestic industry and the outside world. The VITAS gives advice to the government. Quality – Credibility. and export. They have 15 branches in Vietnam and in total 635 members.4
The Vietnam Textile and Apparel Association
The Vietnam Textile and Apparel Association (VITAS) is a non‐governmental umbrella association working in the field of textile and garment industry in Vietnam. 350 million pieces of woven garment. The VITAS also supports foreign companies in looking for Vietnamese textile and garment producers. and together with the big stakeholders they set some plans for future to increase development. It has over 90 member companies in Vietnam which together cover activities from spinning. which is the biggest group of companies in the field of textile and garment in Vietnam. and (2) increase the domestic content of garment production by investing in cotton production.000 employees and another 35. and the outside.000 employees work in joint‐ventures with foreign and local partners. The production capacity of the VINATEX is 100. knitting. Together with the VITAS the government made investment plans to increase exports. 2007 Vietnam Textile and Apparel Association. make and trim) to FOB (free on board) production. 2007
International Business Research Vietnam 2008 – Bandolera 22
. weaving. 80 million pieces of knitting.000 tons of raw cotton (data from 200616). The role of VITAS is to promote business and investment cooperation as well as exchanging information among members. competition. Most factories cannot do every activity to finish a garment product. and dyeing to finishing. and in spinning and weaving facilities. This is because these companies are really big. The total labor force of the VINATEX is nearly 100.
The industry needs government support to accelerate its development to shorten the gap to other large exporters in the world.
‐ implementing more efficient import sourcing methods. Meanwhile.
The industry must build on its existing reputation for high quality by moving from the lower end of the market to the mid‐range and the high end of the market.1. One sector targeted for expansion is raw cotton production. ‐ Investment in environment protection and social responsibility. ‐ Investment in producing synthetic cloth. The industry must become more efficient in the sourcing of materials.
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. ‐ achieving further vertical integration by adding upstream capacity. causing logistic difficulties. These programs include: ‐ Investment in raw material development. However.
The government is planning to invest around USD 3 billion in developing the textile and garment sector during the run‐up to 2010. ‐ Investment in developing color printing. ‐ Investment in fiber production. USD 443 million on garment projects. ‐ Investment in producing industrial textiles. 2.
3. These special programs are in line with the industrial strategies and the WTO‐framework. The investments of the government and the low labor costs attract many foreign investors and customers. training and development. Further down the supply chain. ‐ Investment in knitting development. VINATEX plans to invest USD 26. dyeing and finishing. earlier investment plans of the Vietnamese government have often shown to go wrong or get mixed up at the implementation phase due to lack of funds or planning and communication problems. USD 2. This should be achieved by: ‐ increasing Vietnamese fabrics production. ‐ Investment in producing garment accessories.7 million in the construction of five new cotton processing mills during the next two years in a bid to satisfy demand for raw materials from the country's textile producers. According to VINATEX. It is envisaged that USD 180 million will be spent on projects to expand raw material supplies. Another problem is that many industries in Vietnam are developing faster than the infrastructure. The competency and productivity of the industry must be increased by enhancing research. VINATEX expects to produce over 400 million square meters of fabric per annum by 2010. The Vietnamese textile and garment sector is rapidly catching up with surrounding countries such as China and Taiwan.27 billion on textile and dyeing projects. To process the additional cotton produced. ‐ Investment in mechanical industry for textile and garment. There are also projects of the industry with the goal to invest in upgrading the productivity. fashion design and infrastructure. these projects aim to develop production and distribution systems. ‐ Investment in cloth weaving. At the moment high inflations and economic growth are affecting the Vietnamese industries negatively. state‐owned VINATEX plans to invest over USD 1 billion in 24 key expansion projects from 2006 to 2010. including 270 million square meters for export. and USD 200 million on trade centers and personnel training.
3 with Bandolera’s current producers. Firstly. they are specialized in making jackets. shoulder pads (UK). we did not take the price level in consideration in this evaluation.500 employees.
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. Trousers and pants (2 million pcs/ per year). Interlining: 15 days. they dye high quality wool. Production of proto‐type takes 5 – 7 days. Uniform (3 million sets/ per year). Complete reports of interviews/observations are on the attached DVD. It must be noticed that a couple of companies miss some details on which they will be compared to others. small orders are more easily accepted by private companies which are more flexible in making detailed garment. In paragraph 5. T/C. they have a weaving capacity to make high quality wool. and about 10% to other Asian countries.e. established in 1975. T/R. In the first paragraph we give a description of the visited companies. certificates. In paragraph 5. In HCMC they have 6 factories. The chapter ends with a general conclusion on the Vietnamese garment market. polyester and woolen yarn are imported from Korea. AGTEX 28 COMPANY Agtex is a state owned company. their export experience. 20% to the EU. buttons sourced local Delivery times: micro fibers: 30 days. production lead time is 30 days. T/C. 60% is exported to the US. Factory: spinning. And last of all.4 we shortly discuss the excluded companies and the reason for rejection. and the kind of garment products they (can) make. Alfred Dunner (jackets) and Dorthoty Perkins (jackets for USD $10‐12). there were some company visits during which the companies were not able to answer all of our questions. factory capability. 100% cotton yarn is produced in own factory. In general. weaving. In general state‐owned companies have a very large production capacity and most of the times they only produce basic garment (with less details and embroidery). minimum order quantity). The washing of garment is outsourced. As mentioned before we visited 17 companies both state‐owned and private companies. finishing Other materials: interlining (Korea). Of the fabric production they have a spinning capacity of 100% cotton combed yarn. There are three main reasons why this happened. For the garment. Men’s and ladies’ suit (1 million sets/ per year) and Sport suit (500. At Agtex they make fabrics and garment. customers. the fabrics they work with. After that we give a short summary of the key details of the company: capacity.
5. cutting. including the directories of this presented report. wool blend. 1.1 Description of visited garment companies and factories
Of each garment producer we give a short overview of the company visit in which we first discuss a few details about the establishment of the company. General price comparisons are made in paragraph 5. lady suits and blazers. 100% cotton fabric. Shoulder pads: 20 days.2 we evaluate the companies potentiality based on 5 prior requirements. They can produce fine fabrics until a weight of 500 gram. We conclude every company description with the payment terms and minimum order quantity they and a conclusion. T/C yarn. Micro‐fibers are imported from Thailand. Furthermore. Dyeing is done in their own fabric. in total they have 5. use of other materials and delivery times. wool blend.Chapter 5 Evaluation of Garment Producers In this chapter we will give an overview of the visited garment producers in Vietnam. sewing. Capacity: men’s shirts and ladies’ blouses (3 million pcs/per year). Because we did not have price estimations from all companies for all samples. dyeing. Of the total production.000 sets/per year Certificates: ISO 9001:2000 Customers: United Colours of Beneton (pants). there were some selection criteria of Bandolera that we received after we already visited some companies (i. T/R and 100% cotton fabric. production of fitting sample 2 days. trousers. Another reason is that during some company visits there was simply no time to ask about all criteria selections. YKK and YBS zippers.
but can also be done on CMP (20%). They will expand the sewing factory to have a total of 3 factories. Minimum order quantity of trousers is 6. They import MELAND YARN from Korea. but we have not seen very special fabrics or embroidery machines. Wallmart. spandex. Making proto sample takes 3‐7 days. washing are all subcontracted. Conclusion: this is possibly a potential company because of the jackets and suits they can make. For high quality fabrics. belongs for 50% to the government and is for 50% a joint stock company. CHOLIMEX GARMENT JOINTSTOCK COMPANY Established in 1986. 2. established in 1973. Steve & Barry´s denim. Capacity: 3. Pricing is usually on FOB (80%). EU 30%: Germany (2 customers). 3. sewing Other materials: YKK zippers Customers: Nike. They have 500 workers in 1 factory. SA8000 Factory: printing. C&L. Other information not available They usually work with CMPT prices.They mainly work with FOB pricing. They export to the US 40%. They think that an order of 5. Russia. JC Penney. (The Netherlands. For the garment. Dickies. Pierre Cardin Delivery times: normally it takes 40 days to import fabric from China. Bulgaria). They have sent us fabrics which we will send to Bandolera for further judgment.000 pcs. They export to Europe. Accessories are bought from local market. but they also work with FOB pricing. Holland. Main garment products are knitted products like t‐shirts.000 meters of fabric. the US.000 pcs with 2 or 3 colors is very small. Holland: TNT (polo‐shirts).000 pcs. and also import from China. embroidery. and dyeing & sewing. Germany. First (sample) order: 30 days. knitting. because their minimum order quantity is too high. They produce both fabrics and garment. Adidas. but they also have subcontracts with other factories. Conclusion: this is not a potential company. raider jean co. They are specialized in sewing (they have 800 sewing machines). they mainly produce pants. They source it partly local. Lee sports. cotton. polo‐shirts. Capacity: 1 line/400 pcs/day Certificates: ISO 9001:2000. The fabrics they produce are elasthan. With 4 colors and 6 sizes it takes 90 days for the first part of the order. They can also do on C&F/CIF (they did this before for the US). DONG PHUONG KNITTING COMPANY (DOPIMEX) DOPIMEX is a state‐owned company.
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. weaving.000. Factory: cutting. Current number of employees is 700. dyeing. Most of the yarns are sourced in Vietnam. the customer has to supply the fabric. minimum per color is 1. Minimum order quantity is 1. Also this is a state‐owned company which usually guarantees that they only take big orders. In HCMC they have 2 factories. Next parts of the order take 60 days. Now they have 2 factories: knitting. Sometimes it is imported from Korea (higher quality). sewing Other materials: YKK zippers. in total 700/800 workers. Canada and some Asian countries. France. jeans and also shirts. and polyester. and uniforms. Minimum order quantity is 30. Meland Yarn Delivery times: Meland Yarn import from Korea takes 20 days. England.000 pcs. Printing. Hungary.000 pcs/year (sewing capacity) Certificates: ISO 9001:2000 Customers: US: Target. next orders 40‐60 days per part. Main fabrics they work with are cotton and denim. The fabrics they produce are of middle‐quality. Switzerland. fleece.
The minimum order quantity is 3. They have 2 factories and about 700 workers in factory. cutting. Vanity. because Bandolera is not interested in underwear. The visited factory has 5 lines. but prefer pants. Fabrics they are working with are denim. This company supplies garment to the local market and export it mainly to the US. This company produces underwear for men and women and also underwear dresses. They produce underwear for the higher segment of the industry. and sometimes silk. Some of their products are produced for the local market. 70% before shipment. This private company is established in 1990. if fabric in store shipment takes 9/10 days
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.000 pcs with a minimum of 1. HOA MY TRADING‐SERVICE & MANUFACTURE COMPANY. 4. LTD. of which 3 lines are reserved for Japan and the other 7 are used for the US customer.000 pcs fabric delivery (Taiwan/China) takes 1 month. MAI LAN ANH GARMENT AND TRADING CO. Main fabrics they use for the production of underwear is cotton and polyester. Production of complete order depends on the quantity. finishing. Main product we saw are shirts. Capacity: 500. 2AmazeU Factory: weaving. US (50%) and Japan (20%). The capacity of their factory is about 20. elasthan and polyester. They have about 50 employees working in their factory. 30‐60‐90 days (fabric+ CMPT+ thread + button+ printing+ packing). we haven’t seen any detailed fashionable garment. Hong Kong and some from Taiwan (higher quality and higher price). DUY THINH COMPANY. but do also import the fabrics from China and Thailand (higher quality). knitting Other materials: YKK zippers. spinning. They also have their own cutting room and a design team of about 8 people. The home made fabrics are of moderate and not always stable quality. They do also khaki trousers. LTD. Capacity: 100. also many accessory sourced local Delivery times: based on 5. buttons imported from China. Pricing is done on FOB terms. The largest part of their products is sold in big warehouses in Japan..Conclusion: based on the above mentioned this is not a potential company because their minimum order quantity is too high.000 pcs/month Certificates: no ISO norms Customers: C&A (Germany) Factory: cutting. LTD This company has in total 3 factories and about 750 workers. To place an order customers have to book space in advance: 3 – 6 months before. 6. This is because many buyers from China move their production order to Vietnam. which is imported from China. At the moment their factory capacity is occupied until September 2008. They can weave the yarns to fabrics. They do not export to the US or the EU. sewing. They produce mainly pants for women: denim jeans. sewing. but they also have offices in Shanghai and Thailand. 5. Conclusion: this is not a potential company.000 pcs/month (shirts) no ISO norms Certificates: Customers: mainly warehouses. Conclusion: this company is only potential for production of simple shirts in larger quantities. Embroidery and washing/laundry is done by sub‐contractor. COATS. They can make denim jackets. buttons sourced local Delivery times: 7‐10 days to make counter sample. The other has 10. They only make garment. Fabrics they use are cotton (20/40 gms). They source the fabrics local. The head office is in HCMC. They mainly import their fabrics from Taiwan and for the rest use some local fabric suppliers. Mai Lan Anh exports to the EU (30%). Their Payment term is T/T 30% deposit. printing Other materials: YKK zippers.000 pieces per week.000pcs/color.
Zara. Colombia Sportswear. MINH ANH CORPORATION Company established in 2001 (renamed in 2007). Perry Ellis. NewLook. C. 5. Not from Korea. jackets and coats per year.000 pcs/month. They mainly produce simple. Some is imported from China and Taiwan. However. but C&F is possible. Wallmart Factory: cutting. They have a laundry factory (washing) at 1. They also source fabrics local. because delivery times are too high. EU export countries are Germany.5 hours driving from HCMC. Interlining sourced local Delivery times: proto sample 1 day. YKK and YCC zippers. import of fabrics from China takes 2 months. They export to EU (35‐45%). Japan (15%) and local market. buttons of Ruby and sourced local from many suppliers Delivery times: import of fabrics takes 50 days. sample lead time is 1 week. Korea. Picardie and PCC (local interlining is used for simple not important parts of the garment). detailed orders because they have to keep the machinery running and buy bigger quantities of fabric. Tayroma. Fabrics used are polyester (imported and local). finishing. sewing and finishing Other materials: COATS (sourced from Phong Phu).. Canada Houses Factory: cutting. sewing. rest in provinces which are 1 – 4 hours driving from HCMC). The minimum order quantity is 5. ISO‐9002 Customers: C&A.
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. it is just ‘acceptable’. Conclusion: this is not a potential company.000‐400. these are not of high quality. Pakistan) and knitted fabrics.Pricing is on CMPT. NHA BE GARMENT JOINT‐STOCK COMPANY (NHABECO) The joint‐stock company is established in 1957. non‐basic garment 100. shoulderpads: HELSA. Turnover of 2007 was 170 million USD. washing Other materials: COATS. Capacity: basic garment 200. Quality of the used fabrics is stable. France and UK. but they say that pricing on C&F base is also possible. Freudenberg.K. They have over 12.000 pcs/month Certificates: no ISO norms Customers: JC Penny. 8. Fabrics are imported from China. They do not work with polyester anymore. basic garment like polo’s and shirts. SANKEI (Japan) and local. Interlining: Kufner.000 workers and 27 factories (15 in HCMC. required lead time is 30 days They mostly work on FOB base. Polo. Minimum order quantity is 2. Pakistan. Paris.000 pcs/model. YKK. Italy. US (45‐50%). because the minimum order quantity is too high. polar fleece. Taiwan. Most of the fabrics are bought from a fabric supplier in Vietnam.000 pcs. They export to US (35%). Capacity: 5 million pcs of shirts. They do not make small. dyeing yarn takes 45 days. They have 1 factory with 150 workers and they use 8 workshops outside their factory for extra sewing of garment. Taiwan and Europe (40%). The printing and embroidery is done by subcontractor. The (cotton) rib they use is 1x1 and 2x2. FOB or C&F. 1 million sets of ladies and men’s suit per year. Fifth Avenue. In Europe they export to Spain. Japan (20%). Main used fabrics are spandex and cotton.5 million fashion garment per year Certificates: ISO 9001:2000. NHA BE is mainly specialized in suits and pants for suits. They only work with knitted fabric. Bangladesh and sometimes even Italy. They only do FOB prices. 7. Conclusion: this could possibly be a potential company if Bandolera is willing to do an order for suits or pants for suits without too many details. cotton (local and imported from Bangladesh. Belgium. Conclusion: this is not a potential company because they do not have ISO norms and do not produce detailed clothes. product lead time is 30‐ 45 days.
They make pants. Since 1988 they have a joint‐venture with COATS Plt of England. Worthington. The level of English speaking was below average. ISO 9001:2000. However. Otherwise it could have been a potential company. ProJob (Sweden). jackets and dresses (small orders). garments and sewing threads of all kinds. PHONG PHU CORPORATION Phong Phu Corporation is established in 1968. France and Belgium. Boys Scouts of America. finishing. Wool Italy. straight denim.000 pcs and 1. PerryEllis. making proto sample 1 week. polyester and 100% nylon. Located in HCMC. Exporting countries in the EU are Germany. 70% cotton/30% polyester. Main garment product is basic denim jeans (cotton denim. We did not see them producing it all. making sample 5 days.9. They do only cutting and sewing. after approval it takes 10 days to start the order which takes 15‐30 days to cut and sew only. They do not work with wool and silk.000 workers. Chiros. finishing and dyeing (1) and make garment (2). OKD Delivery times: garment production 30 days if fabric available. weaving (2. Minimum order quantity is 10. In future they want to expand and keep 1‐2 lines for fashionable orders. khaki. YKK zippers Customers: Nike ACG. In total they have 8 factories (3. they do not print on denim. Fabric is imported (60%) from China. but they do not have experience with exporting small fashionable orders.
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. SA8000 Factory: cutting. They produce yarns. YKK zippers Customers: DKNY. Grand Slam. They only work with woven fabrics. for 50 pcs this is 1‐2 weeks Pricing is on C&M. their minimum order requirement is too high for Bandolera. Other materials: COATS. shipment to The Netherlands 25 days The pricing for export is based on FOB and C&F. because the manager was not available. They also have a modern spinning mill with the technologies of Muratec and Rieter. They do not import fabrics. Columbia Sports. towels. and for washing (also stonewashing) they have subcontract with Do Thanh Company. calico) with specializations in manufacturing denim with fashion values as slub. Minimum order quantity is 3.500 machines) and they have 1 factory for women’s fashion. sewing. 1 for fabric and 1 for furry towels). PHUONG DONG GARMENT JOINT‐STOCK COMPANY Phuong Dong was established 10 years ago and is a member of the VINATEX.000 or 20. denim fabrics. ENYU. About linen they are not sure. Accessories and elastics are sourced local. Fabric suppliers are Tung Shin Fabric Company. Benneton. and nearly 80 million USD of annual sales turnover. Conclusion: Phong Phu is a company which offers high quality products. Malaysia. crosshatch and jacquard. It is a state‐owned company and is one of the biggest textile companies in the industry with 5. skirts. LA Conduct (kids) Delivery time: importing fabric from China to HCMC by sea 1‐2 months. Printing inside and subcontract Other materials: COATS. Chargeur. CMT. Capacity: large Certificates. They have export experience of 5 years. They say that the quality of fabric used is stable.000. Danang and Nha Trang. Capacity: 6 million jeans/year Certificates: ISO 9001:2000. For dyeing it is not clear. Fabrics which they source local (40%) is 100% cotton. shirts. shoulderpads: local. Pakistan. SJB Active. but is probably no activity of Phuong Dong because they only produce garment. NF EN ISO 9002:1994 Factory: spinning (3 factories). Hanoi. Interlining: PCC. 10. 50% to US and 10% to other countries. twill.000 workers. Imported fabrics are mainly cotton. Taiwan. FOB and C&F.000 pcs/color. Indonesia and Sweden. They have 4. spandex and elasthan. Nautica. They cannot do a lot of detail. They export for 30‐40 % to Japan. Titanium. 45‐60 days including fabric production. Kuffner. Eddie Bauer. delivery time when not in stock is 15 days.
mainly for males. casual jeans 180. UK. YKK and HKK zippers. They have excellent work conditions and all new employees get a training of 35 days in their own training institute. Abercrombie. Express. Also for women. They prefer to make pants with a maximum of 5 pockets. They do not have experience with C&F. SAIGON 3 GARMENT JOINT‐STOCK COMPANY (GATEXIM) Saigon 3 is established in 1986. but outside (subcontract). Otherwise it is too detailed.Conclusion: this company is only potential for basic cloths or suits 11. no knitted fabrics. From that time they focused on jackets and sportswear. but now their main focus is on making (denim) jeans and (khaki) pants.600 machines). COATS Customers: Marks & Spencer. Fabric is imported (80%) from Japan. Japan and Taiwan. khaki. They export 10 million pcs/year. They only work with woven fabrics. They can also do small orders. We saw big stocks of fabric. mainly jeans and pants. glitters). JC Penney. Local fabric suppliers in Vietnam are TCE. Fabrics are imported from Korea. Express design studio. There is less export to Europe because customers in Europe order too small and too detailed quantities. This company only makes garment. Capacity: 600. polyester and denim. They showed very good samples (brand names: Marveus.000 pcs/month. BCC. also located in Italy and Sweden)
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. Saigon 3 Garment Company has a fashion centre: they design garment for local market. Vilene (all imported) and some local. They are specialized in woven products and focus mainly on jeans.000 pcs/month Certificates: ISO 9001:2000 Factory: cutting. China. sewing. They only work with woven fabrics like cotton. They export to the US (30%: AMF.000 pcs/month Certificates: ISO 9001:2000 Factory: cutting. We saw production of rib trousers (Abercrombie) and blouses (Marks & Spencer). casual pants and shirts. Pacific Sunwear). They source a little local. Sears. Capacity: jeans 200. There is no minimum order quantity (from 100 – 200 pcs to 1 million). They have 2. embroidery Other materials: YKK zippers. Conclusion: this could be a potential company for Bandolera. This washing company is 15 minutes driving from Protrade. but only when it is simple/basic. but maybe can do in future. 12. shirts 300. Japan 50% and 5% to others. Also lining and interlining are of good quality. Decathlon. Lei denim jeans) including many details (belt. Protrade has a partnership with Alan lee Washing Company LTD. They have in total 6 (sewing) factories with 33 sewing lines (2. EU 5%. and Sweden. Garment Export Enterprise situated in the Binh Duong Province. PROTRADE GARMENT CORPORATION LTD. They have 2.000 pcs/month. Tchibo. Haggar Delivery times: no information available at the moment of the interview. Pangnim. Also shirts are produced here. COATS (delivered by Phong Phu). Kohl’s. You have to reserve production lines for 6 months or you have to place order 6 months in advance. designing. because the interview was part of the visit of the University of HCMC at this company Pricing is based on FOB. France. Choorgnaw (all Korean of origin) and Phong Phu (company we also visited). finishing Other materials: interlining: Kufner.500 workers. They export to USA 40%. poplin). Refuge. buttons sourced from Hong Kong (Kudhom. finishing. Hong Kong. NF Polyester. They can do embroidery. Walt Disney. Production of denim jeans (including embroidery) looks really good.800 workers in factory. canvas. sewing. Local (20%) they supply the same fabrics but with less quality. Most of the time fabrics are in stock. Taiwan (denim. Exporting countries in the EU (65%) are Germany. They have many factories and each has its own specialization. prints. The factories are divided between different customers. They have good specialties in embroidery.
000 pcs. other exporting countries are Island. Style up. They have 3 factories and there are working on average 1. C&A. Their recent turnover is USD 65 million/year. UniQLO . Melcosa. 3rd producer of Thang Loi). and Hong Kong. Making first sample 4 days (including washing subcontract).500) Pricing is mostly on FOB.000 pcs/color. Levi’s (for many years). H. Tropical Sportswear Delivery times: import fabrics from China or Taiwan takes 4 days by sea. dyeing. polyester/viscose yarn. Chance exists that they don’t want to produce for Bandolera. Haggar. Duy Thai of HCMC University the quality of fabrics is mid‐level. shirts. but cannot make woven garment because they do not have the machinery for that. polyester. and to the EU for 30% (mainly Germany. EU (15%) and Japan (25%). In total they have 7 factories and 5. They use many fabrics: combed cotton. Hughes. Customers: EU: EDC. pants. Usually the orders of Europe are smaller because of the many details. and nurse uniforms. dyeing takes 3 days. jackets (Dockers). JC Penney Delivery times: if fabric not in stock at supplier delivery time is 60 days. finishing. Interlining: Freudenberg. DKNY. Making fitting samples 4‐14 days The pricing is only on CMP and FOB. Canada House. Minimum order quantity is 1.500 workers. They only can make garment of knitted fabrics. Cotton is the main fabric for garment. OE 100% cotton yarn. bed sheets. Vilene. Japan. viscose.
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. TC/CVC.T. If supplier does not have fabrics in stock it takes an extra 2 weeks. weaving looms. They say that quality of the fabrics is stable.Arizona. but they also export (is increasing). Minimum order quantity is 5. They cannot make jeans. and slub yarn for giving special effects on fabrics. Esprit/EDC. others are sourced local.000 pcs is 4 weeks. Conclusion: this company is interesting for shirts like EDC/Esprit. proto‐ types 3 days if fabric is available (capacity sample room 300 pcs/month). This is the finest they can do. Visconti. 14. Thanh Cong produces fabrics and garment. SA8000 Factory: spinning lines. embroidery Other materials: YKK zippers. Printing and washing is subcontracted. knitted uniforms. US: Columbia. Fabrics they import are mostly from COOLMARK® (Taiwan).000‐20. but only for pants without too many details. They also sell at local market.050 employees. Most garment is sold on the local market. product lead time 45 days till shipment (based on 1. Smaller orders are acceptable when you also place orders of >5. They are a state‐owned company and the main products they offer are woven fabrics. According to Mr. Emilio Shorts. The weight of the fabrics they produce is from 20‐60 gms.000 pcs per style/color. Nike. Marubeni. Stockholm (Sweden). Production lead time for 20. Accessories are sourced at the local market. but we haven’t seen anything with many details and according to our contact person quality of the fabrics is mid‐level. They can make woven fabrics and knitted fabrics. Conclusion: this can be a potential company for Bandolera. Capacity: large Certificates: ISO 9001:2000. Boy Friend Jeans. because the orders are too small. JC Penney. However they can only do simple design printing. knitting machines. The knitted fabric for EDC is imported from Hong Kong. Shipment 30 days (costs are USD 2. C&F is possible in future when relationship is established. THANH CONG TEXTILE GARMENT JS COMPANY This company is established in 1976. Garment they make are mainly shirts. They export to the US market for 60/70%. Buttons are imported and dyed in their own company. Columbia. They export to the US (60%). Eddie Bauer.000 pcs). sewing. THANG LOI INTERNATIONAL GARMENT JSC (VIGATEXCO) This company is established in 1959. They export mainly shirts (like EDC/Esprit). 13. but C&F is also possible.
2‐1. Printing is outsourced. Spain and Germany) and 40% to the US. 16. They export about 30% to the EU (UK. sewing. They especially do CMPT price. Main fabrics are imported with stable quality. but in future they will do FOB.
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. They do not do C&F. of which 600 in factory. The order repeats all the time.e. lables.000 pcs. interlining. They mainly use fabrics like denim. They have 6 factories. PNG. Furthermore they import from China. 2F street ) which has 13 production lines.4 million pcs/year Certificates: no certificates Factory: cutting. This company is leading the Vietnamese fashion (casual wear. Thailand and Korea.000 pcs/month Capacity: Certificates: ISO 9002:1994.Thang Loi only makes woven fabrics themselves. VIET THANG GARMENT JOINT‐STOCK COMPANY (VIGACO) Viet Thang was established in 1991 and became a private company in 2005. embroidery Other materials: YKK zippers. They can make everything: of simple pieces they can make 2. buttons all sourced local Customers: Dockers. has 64 shops in Vietnam and 2 shops in the US. Korea.500 workers. They want to open shops in foreign countries but they also want to produce fashion cloths for other companies without using their brand name. one for spinning and weaving. Viet Thang mainly produces wrinkle free pants and shirts and blouses for men. polyester and linen. but they can attach pearls by tailor. SA 8000:1997 Factory: cutting. Mervin. Hangar. Hong Kong and some are sourced local.000 pcs/week. Pacific Trail Delivery times 7 days to import fabrics (20. t‐shirts. They are mainly specialized in uniforms and don’t have experience with producing fashionable (women’s) fashion. It takes 7 days to import fabrics from Thailand to HCMC. accessories. district Vinh Loc. Fabrics are imported from Thailand. Their brand is the most used and sold in Vietnam. finishing Other materials: YKK zippers. Capacity: 1. 22% market share) industry. Quality of fabrics is very good because they have a reputation of the best. of complex pieces (i. The different factories work together but do not belong to the same company. Nautica. sewing thread. cotton.000 pcs/week. Dickies.000 pcs. the black/white dress of Bandolera summer 2008 collection) they can make 2. buttons local sourced.000 meters. sewing. Ninomaxx wants to produce for other brands and she is developing this for the near future. one for dyeing and finishing and 4 for garment.000‐3. They import pro‐material from Africa. casual wear. Now they already deliver for other brands in Germany and Italy since 2006. from Thailand). Customers: O’Neill (sport clothes). Conclusion: this company can be interesting because they already produce fashionable garment for women with some details. but they can also do orders ranging from 500‐3. They import 20. established in 1998. They are specialized in women’s fashion. Ninomaxx has a factory in HCMC. 247. leading garment fashion store in the industry in Vietnam. Viet Thang has 1. and is still expanding. Minimum order quantity is 1. but maybe in future when they have more experience with exporting. They do embroideries in own factory. Downside is that their main business is producing and selling their own brand in Vietnam. They mainly sell jeans. VIET FASHION COMPANY (NINOMAXX) This fashion company. 15.000 workers. finishing.000m. Conclusion: this is not a potential company. They have 1. Puma. industrial zone (C18 Vinh Loc Industrial zone. GIODANO in Italy (jeans & khaki pants) Delivery times: no information available Pricing is on FOB. They want to be less dependent on the customer and provide the fabrics by their selves.
ISO 14100. and Japan. Canada (C&A). No Boudaries L/G. delivery imported fabrics 3 weeks. because it is hard to get workers in HCMC. They have over 30 sub‐factories. John Harris. Sweden. making fabric) 5. because they produce only large batches and were not able to show production of garment for women. However. dyeing. Communication The grade/level of English of the contact person we spoke of the garment company. but the employment is not stable. polyester. Hong Kong (30%). T/R.
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. product lead time 30‐45 days Pricing is on CMPT or FOB. printing and accessories are done in different sub‐factories. Thailand. Piere Cardin. wool and linen. shirts and pullovers. Korea. 600. dyeing fabric 2 weeks. accessory sourced local. but only for local market and they do not want to export these kind of garment. and sourced local (70%). Capacity: 5. The minimum order quantity is 1. import fabric from China 30 days.000 pcs in 3 months.000 pcs in 2 months. Brazil and a little to Japan.1. Lonneker Textiles BV (The Netherlands). blouses and pants. 1. Capacity: 300. 17. sewing. weaving. They work with knitted fabrics: cotton and khaki. At this moment they produce shirts. proto 1 week. In future they are going to work with elasthan. than it is required that there is placed an order of at least 5. product lead time (incl. but then pricing is higher. 10. They do produce fashionable garment. many activities are outsourced and the level of English is poor. they cannot make knitted garment.000 pcs. Ruehl no 925 Greenwich St. Good quality fabrics are imported from China.000 pcs/year Certificates: no ISO norms (expected next year) Factory: cutting. 5 can be regarded as prior conditions. New Mix USA.They can produce fabrics until weight 50 grams. The washing. Of these criteria.000 shirts/month. The grade of English ranges from: ‐‐ (poorly) to ++ (very good). Gimeno (Spain). Fabrics they work with are cotton. In this paragraph the garment producers will be evaluated on these prior conditions and their potential. SA 8000 Customers: Jack Wolfskin. Vossen & Co (Belgium). cutting. Fabrics they use are imported from Taiwan. metal buttons imported Delivery times: fit sample 1 week (if fabric available). At the moment Viet Thy Fashion exports to Spain. Wendler (Hong Kong).500) Conclusion: this is not a potential company. Pahladium Sweden. Mainly knitted products: knitted shirts and khaki trousers.500 pcs/color. They can also do C&F. They only work with woven fabrics.2
Final evaluation of garment producers
Bandolera has given many criteria to select potential garment producers. We will discuss these 5 conditions and summarize the scores of the companies in table 5.000‐10. I&A (Vietnam) Customers: New Portland. Interlining: Freudenberg. LTD This company is established in 1995. New York City. finishing Other materials: YKK zippers. Yarn is imported from Korea (Toonkook). Conclusion: this is not a potential company. They do not use silk. Korea. VIET THY FASHION COMPANY.000 pcs is possible. finishing Other materials: COATS. shipment 5 months (costs USD 1. Gruppo Coin Spa (Italy) Factory: spinning. Garment products they make are children’s wear. Seiden Sticker. Bibitas Delivery times: make fabrics takes 3‐4 weeks. They are not able to do stonewashing for the trousers. buttons sourced local. Asia Bay (USA).
5. because the company is not able to make very fashionable garment.000 pcs/month Certificates: ISO 9001:2000. 3. They have 100 workers. sewing.
2. In table 5.1 the following abbreviations are used: D : dyeing W : washing E : embroidery : attaching buttons/zippers A P : printing 4. embroidery.
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. attaching buttons and zippers. especially Europe and the US. This could include dyeing (if they also produce their own fabric). Quantities showed in the column are ‘per style/model’. In table 5. Export experience Strong requirement in evaluating garment producers is that they have experience with exporting to foreign countries. In the column we show the number of sources who recommended the garment producer. and printing. Minimum order quantity Each garment factory has a minimum order quantity which judges if an order will be accepted. Capability of factory Most visited garment producers outsource several activities related to finishing the garment product. This column is followed by another one which contains the names of the persons who recommended the garment producer. washing.1 is showed the percentage of export to the EU and the US. 3.
000 5. 12 Saigon 3 Garment Joint‐Stock Company (GATEXIM) 13 Thanh Cong Textile Garment JS Company 14 Thang Loi International Garment JSC (VIGATEXCO) 15 Viet Fashion Company (Ninomaxx) 16 Viet Thang Garment Joint‐Stock Company (VIGACO) 17 Viet Thy Fashion Company.000 1.
‐ ++ ‐ ++ ++ + ++ ‐ + ++ ++ + + + ‐
30.000 10.000 6. 6 Mai Lan Anh Garment and Trading Company 7 Minh Anh Corporation 8 Nhabe Garment Company (NHABECO) 9 Phong Phu Corporation 10 Phuong Dong 11 Protrade Garment Company. ltd. VITAS University Interpreter University
30% 50% 35% 40% 40% 50% + + + +
65% 30% 5% 40%
15% 60% 30% 65% 100% 0% 30% 40% ‐ ‐
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.000 3. 5 Hoa My Trading‐Service & Manufacture Company. ltd.ltd.000 Capability of factory D + ‐ W ‐ E ‐ A + + P ‐ + Export EU USA 60% 20% + + Recommended by number of contact persons 0 1 Potential company Y N University
1 28 Company / AGTEX28 2 Cholimex Garment Joinstock Company / Trading ‐ Service Enterprise 3 Dong Phuong Knitting Company (DOPIMEX) 4 Duy Thinh Company.000 2. Huong University VITAS Mrs. Huong University Interpreter. Huong University.1 Judgment of Vietnamese garment producers
Communication Minimum order quantity 1.000 3.000 or 20.000 500 or 1. ltd.000 100‐200 5.Table 5.000
+ + ‐ ‐ ‐ ‐ + + ‐
‐ ‐ ‐ ‐ ‐ + ‐ ‐ ‐ ‐ ‐ ‐ ‐
‐ + ‐ ‐ + ‐ ‐ + ‐ + + ‐ ‐
+ + + + + + + + + +
‐ + ‐ ‐ ‐ + +
40% 30% + ‐ + ‐
0 0 1 1 1 1 1 2 1 2 1 0 1 1 0
N N N N N Y N N Y Y Y N Y N N
University Mrs. Mrs.
and due to the economies of scale factories have because of the large productions. they should import the fabrics. 2. As mentioned in chapter 3. compared to China and India. E‐mails failed to be delivered. because this factory is situated in a total different area. In The Netherlands main reasons were that we cannot communicate with the companies because they do not speak English. 3. Comparisons will be made on availability of fabrics. When we noticed that it is not a potential company for Bandolera we did not show samples and did not ask price estimations.3. It happened many times that producers just can make one piece (shirt or trouser / knitted or woven) of garment. Most fabrics are imported from other Asian countries such as China (Hong Kong). quality and price. If Bandolera has the intention to let their garment be produced in Vietnam. Concluding. Therefore the industry stays dependent of other foreign fabric suppliers.3 is that the price level of Vietnamese garment producers is significantly lower than the prices of Bandolera’s current producers. websites did not work. Also should be taken in consideration that the above mentioned FOB prices are estimations based on the minimum order quantities of the companies. Pricing of garment products We asked the visited garment producers to estimate the FOB price of some samples of Bandolera. homemade fabrics are of less and unstable quality. Probably this is due to the low labor costs of Vietnamese workers. The mainly used fabrics. A weakness of the Vietnamese textile and garment industry is that there is such a small production of (middle‐to‐high quality) fabrics. so they cannot estimate prices of all samples. Nowadays Bandolera’s garment is produced in China and India. They also have a factory in Turkey. for export as well as local market. Also the exchange rate euro – USD is very positive for Europe.2 Price comparisons (in USD) of Bandolera garment (non‐disclosure) Table 5.4
Excluded garment producers
During our desk research in The Netherlands as well as our field research in Vietnam we excluded many garment factories from our research.3
Comparisons to current producers of Bandolera
In this paragraph the visited garment companies are compared to the current garment producers of Bandolera. spandex/elasthan. more stable quality than the homemade fabrics (low‐to‐middle level quality).
International Business Research Vietnam 2008 – Bandolera 35
.3 Price comparisons (in USD) of NTS garment (non‐disclosure) Although we do not have price estimations from every company or for every sample. or we could not get in contact with them. 4. and has also indirect (positive) effects on the FOB prices for Bandolera. because we do not have price estimations of all factories of all items: 1. but we do not compare with this country. denim.2 and for the NTS garment it is showed in table 5. less and less fabrics are produced in Vietnam. This is probably due to the less advanced machinery and the low production of fabric sources in Vietnam.2 and 5. Price estimations of Bandolera garment is showed in table 5. This is because the fabrics abroad are of higher. and polyester. are cotton.5. the general conclusion that we can draw from table 5.
5. In total we excluded 50 companies during our desk research. Having short time resulted in not being able to ask price estimations. There must be made some remarks before showing the tables. During the first week we had just 3 samples to show to the producer. For local market sometimes linen and silk are also used. However. during the desk research companies were rejected because they have no experience with women fashion or export. Table 5. and we also cannot reach them by phone. Taiwan. Korea or Japan.
In total we rejected 65 companies during our desk and field research. He started his business in Vietnam 25 years ago and knows the business quite well. To produce fashionable orders of small size. If their minimum order quantity is above 1.S. This is in big contrast to most European companies who experience great difficulty looking for a producer that will produce small quantities of high quality for them. but they still buy the fabrics in China”. He explains that the production is “mainly for massive quantities of low to mid‐level quality. He stopped producing fashion orders. this should not be a problem”. He provided us with general. During our stay in Ho Chi Minh City we contacted lecturer Duy Thai. Mr. we also interviewed several experts and agents about the Vietnamese garment industry. Somers (owner of private company Venture International in Hanoi). recommended by experts/agents. including middle‐to‐high quality fabrics and accessories. Concluding. but these will be private. “Vietnamese garment producers can produce the garment of Bandolera. He already warned us at day one that “…it is a difficult process to find a garment producer. which has the interest of huge corporations mostly from the US”. There are a lot of big quantities of low quality fabrics available for low prices.e. We interviewed Mr. but they will not have experience with export.5
Experts and agents
Besides the company visits..
5. Factories cannot offer everything. In Appendix 6 there is a list of the companies we excluded.1. the agents and experts that we contacted paint a similar picture. “…you have to look for a small private entrepreneur (max. Vietnamese producers cannot guarantee that the quality will be stable”. Next to that. because of its need for high quantities for low prices.000 we did not visit the companies. From a more formal perspective. Our interpreter helped us in selecting the right companies by calling. we spoke with Mr. small companies in which they often do not speak English and which need all materials to be delivered”. because “you mainly cope with the small quantities and quick turns around. fitting garment producer for fashionable garment is constraint by aspects as quantity. 250 machines) and you should not work with a state‐owned company because everything where is dealt with goes very slowly”. Many big companies move to Vietnam because of the low labor costs (selling prices). If Bandolera can tell the companies where to buy the fabric from. Overall. The search for a good. These massive quantities are needed because the main reason for customers to go to Vietnam for production of garment is its low pricing. Usually there will be maybe one or two who can speak a little English. macro information about the textile and garment sector. the lead time is longer because you have to supply a lot. Huge American corporations even go factory hopping to search for the cheapest producer. Toan (owner of Yen Bien Company) in Hanoi. especially when you want to use local fabrics. main reasons of exclusions are the same as the criteria displayed in table 5. We checked some rejected companies of the desk research and checked new companies which were i. In this interview it became clear that Vietnam is especially interesting for the U. (un)stable quality and import of fabrics and accessories. According to him. Toan has and sometimes still cooperates with Mr. He warned us that “…fabrics of middle‐to‐ high quality still need to be imported. The most important aspect in this search is finding and sustaining a good relationship with the factory. He helped us finding and visiting different garment producers. Le Van Dao (vice chairman of the VITAS). of the department of Textile Engineering at the University of Technology in HCMC.000 – 2. price. for example fabrics and buttons”. J.During the field research we excluded many garment factories based on their minimum order quantity. He has 13 years of business experience and gives us more information about where to find a producer for the production of fashionable orders.
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. “If Bandolera wants to let their garment be produced in Vietnam they should find someone who can arrange the right companies for them and also the materials.
However. Sub question 2. Bandolera is used to work with payment terms on C&F based pricing. experience and certificates to produce for Bandolera.000 is possible. more research
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. Looking at the market trends and the economic development of this industry in Vietnam. the Vietnamese market shows a very interesting picture. (un)stable quality and import of fabrics and accessories play a main role in deciding and finding a garment producer in Vietnam. but items such as fashionable buttons are still mainly imported from China or Taiwan.4 focuses on the availability of additional items and accessories. To make valid price comparisons. Taiwan and Korea. Producing fashionable cloths take a longer production time. Vietnamese garment producers source all kind of accessory. Besides that fabrics of middle‐to‐high quality should be imported. We have not visited companies that were already producing garment similar to Bandolera’s collections.2 and 5. but we have not seen them producing it. The ‘minimum order quantity’ is of decisive influence in determining which company could be potential for Bandolera. was already answered in table 5. Sub question 2. and often rejected. for example YKK has an office in Vietnam. On average the production time is within the time limit of 60 days and estimated prices are lower than Bandolera’s current prices. Importing the fabrics or making the fabrics ranges from 5–30 days. Sub question 2. They want the machines keep running and therefore detailed garment is not preferable.1. such as buttons and YKK‐zippers. Their opinions are in line with the findings of the factory visits. This gives partly answer to sub question 2. Most payment terms Vietnamese garment producers work with are CMPT or FOB prices. This is highly unusual in Vietnam. COATS (sewing thread). but Vietnamese garment producers also use (and import) international brands as YKK zippers.6
Summarizing Chapter 5 it can be stated that the fabrics made in Vietnam are of low‐to‐medium quality. but the order size is of decisive influence in accepting an order (minimum order quantity of Bandolera is 500 pcs/model). In paragraph 5. There are many high (technical) skilled people who can make the garment. price. Hong Kong. In general Vietnamese garment producers do have the capacity and machinery to produce fashionable cloths. Vietnamese garment may be able to produce fashionable garment products similar to the current Bandolera collection. machinery. We can conclude that additional items are available.000 – 10.5 experts and agents generally concluded that quantity. Vietnamese garment producers are able to deliver the products in time. In general the production lead time of garment is about 30 – 45 days. Sub question 2. These differ per company and are all described in the company visits and tables 5. letting basic garment be produced in Vietnam with a minimum order size of 5. which companies are advised to us by our contact persons. more labor and workers need more exercise to make the garment.6. With the information of this chapter we can answer this question. However. even if they have to import fabrics and accessories. it is very difficult for Bandolera to find a producer who can make the garment product (from sourcing fabric till finishing the product).1.5 focuses on the production time and estimated price of counter and fitting samples. Freudenberg and Vilene (interlining). Concluding. Research question 2 asks the question whether Vietnamese garment producers can meet the selection criteria provided by Bandolera.3.2 asks whether Vietnamese garment producers have the capacity.3. Depending on the kind of shipment to The Netherlands. Information about the financials in this report is based on price estimations given by Vietnamese garment producers. when looking at the price comparisons with Bandolera’s current producers show that at a financial level. This gives answer to sub question 2. Vietnamese garment producers have significantly lower prices. Many additional items are sourced locally. the lead time is about 25–30 days. That is why almost all exporting garment factories we visited import their fabrics from foreign countries as China. which focuses on the lead times and payment terms for complete orders Vietnamese garment producers in general work with.5. Kufner.
or experience is necessary. If Bandolera decides to explore the Vietnamese market and take for granted some restrictions we can recommend the five most potential companies for Bandolera: ‐ Agtex 28 ‐ Viet Fashion Company (Ninomaxx) ‐ Protrade Garment Company. ‐ Saigon 3 Garment Joint‐Stock Company (GATEXIM) ‐ Thanh Cong Textile Garment JS Company
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GSP stands for Generalize System of Preference. the word "free" means the seller has an obligation to deliver goods to a named place for transfer to a carrier. The seller fulfills its obligations to deliver when the goods have passed over the ship's rail. With this GSP Form A certificate producers have a lower tax compared to normal. The company then cuts. fabric and trimmings to the local manufacturer/subcontractor who then constructs the garment. Without the GSP Form the export tax is 14 or15 %. the agent/buyer delivers the pattern. FOB business is still too risky for most private and state‐owned Vietnamese producers. i.com. the export tax for jacket and trousers is only 10%.1 we discuss the legislation and rules about exporting garment to the EU.1
Legislation and rules about exporting garment to the EU
If Bandolera is able to find a satisfying garment producer Vietnam. Any Vietnamese company with export experience will be able to arrange all necessary documents. while in others they rely on sub‐contracts from state‐owned enterprises. In some cases firms deal directly with buyers. which have made it simple for Vietnamese enterprises to arrange the export of their products.3 gives an overview of the logistic service companies positioned in Vietnam providing express services to The Netherlands. 2 June 2008
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. which is done by agreeing on the deal and signing the contract. Furthermore the GSP form should be sent to the Chamber of Commerce and Industry. and sews the fabric (often of an industrial nature) and makes up the finished products which are then returned to the customer. due to the skills and capital required.
6.2 we discuss the pricing of garment and used payment terms in more detail. Currently. However. Contracts involving
http://www. There are no restrictions on the export of garment products. With the certificate. The export part and sending of required documents to the right institutions is arranged on the Vietnamese side and is no different than the procedure of exporting any other product. accessories and sewing threads. and Trim) terms.. In the first paragraph 6. in some cases. In paragraph 6. They can deal directly with the Customs Department. The intended cooperation with a potential garment producer is one of placing orders only.byte‐software.
6.4 we give some practical insights in how to do business in The Vietnamese garment industry. When used in trade terms. The CMT process adds as little as 20 percent to the value of the final product since the manufacturer/sub‐ contractor does not source the fabric. In paragraph 6. Producing garments on FOB (Free On Board) terms requires the producer to deliver goods on board a vessel designated by the buyer. Producing garments for FOB business generates significantly higher margins since the manufacturer sources the fabric him/herself and. The manufacturer or the agent then re‐exports the finished product17. Vietnamese factories have a GSP Form A. the documents are sent by the producer to (1) the Bank for LC payment and (2) to the buyer to show to the customs department when goods arrive. Paragraph 6. There are few formalities needed for establishing a contract. Bandolera does not have the intent to invest in the development of the production for Bandolera in Vietnam. contributes to the pattern design. The majority of private firms make garments for the Cut‐Make‐Trim (CMT) business. Make. This cooperation starts by placing the first order. Vietnamese factories have a business certificate legislation to export. the textile and garment sector is encouraged by the government to export its products.
Chapter 6 Logistics and Legislation
In this chapter we give insight in relevant legislation and the available logistic services to export garment from Vietnam to The Netherlands. A more extended version is payment of CMPT (Cut. CMT entails that the customer is supplying all of the raw materials. To arrange the export.2
Pricing and payment
There are an estimated 250 private manufacturers and 90 state‐owned enterprises producing garments in Vietnam. We conclude the chapter with a conclusion in which we answer the third research question. Pack.e. if necessary. which only adds a packing service. the cooperation between both companies can turn into a long‐term relationship.
TNT is a global express and logistic service. FedEx provides customers and businesses worldwide with a broad portfolio of transportation. DHL customers can also provide their own boxes.3
Logistic service companies Vietnam – The Netherlands
In total Vietnam offers over 30 enterprises that deliver services in logistics.com. Payment executed by the customer in a foreign country can occur through account number. Fed Ex serves more than 220 countries and territories. C&F terms require the seller to clear the goods for export18.com. When the package is picked up in Vietnam from home or office. The network of DHL is internationally linked to more than 220 countries and territories. overland transport. including every address in the United States. shipment and transportation. Payment from this account number happens when package is arrived at place of destination. The costs of sending such a box without a contract from Vietnam to The Netherlands are about US$160. For payment. DHL is the Deutsche Post World Net brand. in 1997. Fed Ex air services are supported with 671 aircraft. TNT serves more than 200 countries has about 500 employees in Vietnam. Bandolera mainly uses boxes with sizes 60x40x40 cm with a weight of 10 kg.‐ + 22% petrol tax. Boxes will be delivered within 2‐3 days if there is no delay at the airport. which has a volume of 16 kg. specializing in customized solutions. Fed Ex Corporation is a logistics services company. The costs of sending a box with a volume of 10 kg from Vietnam to The Netherlands are about 301. e‐commerce and business services. For a volume of 10 kg. Fed Ex has more than 290. based in the United States. DHL offers expertise in express. the customer can give his/her account number which will be checked by Fed Ex. when the risk of loss shifts from the seller to the buyer. The seller takes care of all costs and freight necessary to bring the goods to the named port of destination. When the package is picked up in Vietnam from home or office.5 million shipments for express. In total the costs of sending a box of 41x34x27 cm to the Netherlands will be US$195. We will discuss them below. TNT is head quartered in the Netherlands and has established a joint venture.alphatrans. Bandolera usually works on Cost and Freight (C&F) terms. The Fed Ex website has over 15 million visitors monthly. Boxes send by air have a maximum size of 66x49x38 cm.fedex. we have contacted three well known couriers that provide express and logistic services.000 employees and contractors worldwide. The average daily volume is more than 7. Fed Ex can only arrange transport by air.20. The costs of sending such a box from Vietnam to The Netherlands are about 383. and freight. but in the weekends and with holidays the package can arrive a few days later.09 US$. Of the 8 large enterprises. The risk of loss of or damage to the goods.
6. the costs should be paid directly. is for the buyer. At the moment they have operations in 23 cities and provinces in
http://www. air and ocean freight. they use boxes with 41x34x27 cm sizes. more than 3 million package tracking requests daily and 15 million packages shipped via FedEx Ship Manager monthly. covering more than 375 airports served worldwide20. which means that the seller delivers when the goods pass the ship’s vessel (or truck/vessel/airplane) at the named port of shipment. Boxes will be delivered within 2‐3 days.international transportation often contain abbreviated trade terms that describe matters such as the time and place of delivery and payment. namely DHL. 4 June 2008 20 th http://www. with their Country office in HCMC and their Branch office in 19 Hanoi . not by sea.com.59 US$. as well as who pays the costs of freight and insurance.dhl. ground. as well as any other additional costs due to events occurring after the time of delivery. Fed Ex and TNT. This is a global market leader of the international express and logistics industry. In Vietnam they have around 350 employees. Boxes provided by Fed Ex have sizes of 60x40x35 cm or 70x46x35 cm. the costs should be paid directly. contract logistics solutions as well as international mail services. 4 June 2008
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. 2 June 2008 th http://www. TNT offers network infrastructures in Europe and Asia and is expanding operations worldwide. In the 2008 membership directory of the European Chamber of Commerce in Vietnam we found 8 large enterprises and 21 small and medium enterprises operating in the logistics and transportation services. TNT–Viettrans Express Company Ltd.
It takes very hard work to achieve good quality in Vietnam. When established. just for a few minutes extra time spare.4
Informal trade barriers in the Vietnamese garment industry
As mentioned earlier. it is more difficult for smaller (mainly European) customers to build a relationship. According to Mr. TNT does not ship packages by sea. covering over 200 countries. Unique Logistics is already active in exporting goods from Vietnam to the Netherlands. Somers (Venture International).com. Mr. meetings or appointments should be confirmed numerously to avoid them to be forgotten. they should be visited to check whether it is possible to build a relationship”. friendly and well willing to start a new interesting business relationship. the costs can be paid in cash when the package is picked up in Vietnam from home or office. Contracts do not mean much to the Vietnamese. The costs of sending a box with this slow delivery service from Vietnam to The Netherlands are about US$148. M. Private companies can decide themselves and are much faster. They turn and turn. The longer you are dealing with them. About how to do business in Vietnam it is mainly important to establish a good relationship with the seller. Some of the best looking factories in Vietnam are the worst to deal with. Bandolera is already cooperating with Unique Logistics. They offer customers a complete pack of logistic services. Customers can also provide their own boxes. This is a fast delivery service and will deliver the package within 2‐3 days. 83. However. Garment factories are aware of this. The VINATEX is a very large organization.tnt. building a relationship will take time. In a few of our interviews we received more practical information about the way of doing business in the Vietnamese garment industry. This company has a lot of experience with national as well as international express and logistic services and has a high reputation. Unique Logistics can provide Bandolera with shipment of large orders from Vietnam to The Netherlands. because “they are slow. Unique Logistics has 55 offices worldwide. Just like ‘job hopping’ there is also a trend noticed that big customers ‘hop’ between garment factories. Although the Vietnamese garment industry is a busy one. acting independently from the Netherlands. This is a very difficult organization to get in and also very difficult to get in good relationship with. Transport by sea from HCMC to Rotterdam takes about 32 days. advices to avoid working with state‐owned companies. Because the Vietnamese garment market is mainly ruled by big customers. Unique Logistics BV started in 1994 as forwarding agent at Schiphol airport and is in this capacity part of Unique Logistics International (ULI). there is a high labor competition going on in Vietnam due to low labor costs. Boxes delivered by TNT for shipment by air with a volume of about 10 kg have sizes of 50x40x30 cm. especially in making decisions. should Bandolera decide to sign a contract with a Vietnamese garment producer. When selecting a garment producer. The costs of sending such a box from Vietnam to The Netherlands are about US$269. TNT‐Viettrans is a subsidiary of TNT Global which is one of the four leading couriers that provide express.
6. and the increasing demand for more technical skilled workers. capable workforce. we can recommend TNT as a good express service giving the best price. The workforce is young and mobile and a trend of ‘job hopping’ is developing. TNT can also provide the customer with a slow delivery service in which the package will be delivered within about 7 days. Because of the boom in the industry. the people are open. For the shipment of large orders by sea. Payment under signed contract can be done through an account at the end of the month or right away. Concluding from the information given above. by air transport takes about 24‐48 hours. owning 80% of the market.86.Vietnam. State owned companies are the worst to deal with. cut off.
www. This makes it difficult for enterprises to maintain a stable. J. Without a signed contract. They are mostly just interested in getting one deal”. logistics and international mailing services21. the less they are willing to do business. there are some difficulties. 4 June 2008
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. because they search for the lowest price. Manning (Indo Pride International) the Vietnamese “do business the way they drive a motor bike. Vietnamese business people are becoming more and more ‘short‐term minded’ and it can be very difficult to arrange meetings.
The government is promoting the export of garment and therefore there is no barrier formed by formalities and documents. The chapter concludes with some information on the informal trade barriers in the Vietnamese garment industry. Sub question 3. All together we see a mixed of both negative and positive results on the third research question. Sub question 3. Doing business on FOB is becoming more and more the regular terms of pricing. Therefore the matters of logistics can become a barrier. reliable.3 focuses on the costs and delivery times of logistic services from Vietnam to the Netherlands. garment producers can have trouble to find and keep good workers.1 there is no restriction on the export of garment and very little legislation exists.2 and 6. which can deliver big problems in Bandolera’s tight delivery schedules. Concluding from this chapter we can see that the Vietnamese garment industry has some barriers which make it difficult for a company such as Bandolera to do business.3 have displayed that for most private and state‐owned Vietnamese producers it is still too risky to take responsibility of financing the transport of the products until they are on board of the shipping vessel. Furthermore we see that there are informal trade barriers in Vietnam. can be answered shortly.2 focuses on the availability of Vietnamese companies and logistic services to facilitate in matters of logistics. However. Paragraph 6. but doing business on the. Next to that.5
The third research question stated the following question: Which Vietnamese legislations and logistic services influence the export of garment to The Netherlands? Sub question 3.1 about which Vietnamese legislations influence the export of different kinds of Vietnamese garment products to the EU. As described in paragraph 6.
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. but in the light of the results on the first and the second research question we do not recommend Bandolera to do business in Vietnam. well known couriers such as DHL.6. C&F pricing is yet highly unusual in Vietnam. the need for more agents or enterprises to arrange the logistics can result in delay. By air we have concluded that delivery times all are within 2‐3 days. Costs for shipment of boxes with volumes of about 10 kg range between US$301 and US$149. Fed Ex and TNT are represented in Vietnam and offer quick delivery of smaller packages by air. the different Vietnamese way of doing business and the low level of English has a good change of resulting in misunderstandings. not to mention the C&F pricing. Because employment in the textile and garment industry is high and the work force is mobile. DHL has been found to be the most expensive courier and TNT the cheapest option. in practice we see that many companies still find it risky to do business on FOB pricing. Although there are no restrictions on the legal side of the deal. by Bandolera requested.
Mr. and capital to invest into machinery needed for producing ‘fashion cloth’. shoulder pads. Phan Thi Dieu Ha of the Ministry of Industry & Trade – department of textile and engineering. There is also a trend noticed that people do ‘job hopping’. Vilene are noticed here. Therefore it seems likely that Vietnam will stay dependent on fabrics from surrounding Asian countries for the next couple of years. The provinces Dong Nai and Binh Duong are both (industrial) development zones where new factories are established. Dao Duy Thai from the HCMC University. The fact that people in this industry are not specialized in making detailed garment is related to the above mentioned subjects. The quality is low and not stable. even to other kind of industries. these are imported from China and Taiwan (also Korea and Japan). Freudenberg. Ngiem Huong who wrote a relevant thesis about the Vietnamese garment industry. and other embroidery are imported as well. with low labor costs. where also the harbor (and airport) is located. The decision‐making process in state‐owned companies is more controlled by hierarchy. These could also be sourced local. At this moment there is much competition in the textile and garment industry in Vietnam. Kufner. and labor skills. These are mainly specialized in children’s wear and working wear. Mrs. interlining. of which 17 appointments with garment producers. technology. In Hanoi and the province Long An 10% of the garment companies are located. This is because they cannot control the quality of fabrics on their own. Manning who is owner of apparel agency/supplier Indo Pride International. In total we had 8 contact persons: Mr. In Hanoi we mostly had appointments with contact persons who gave us market information. and which is abundant in skilled manual labor. Next to supplying fabrics from other foreign countries buttons.
7. sewing threads. Due to the fact that most must be sourced from other Asian countries. Garment factories namely do not have the resources and materials.1 Conclusion
During our field research in Vietnam we had many appointments. The Vietnamese production of the main fabrics (such as cotton.
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. Sometimes the supplier cooperates with a foreign company as Coats. Cuong who wrote a thesis about the difference between state‐owned and private companies in the Vietnamese garment industry. The production of some fabrics is even decreasing. Main difference is that the decision‐ making process in private companies is much faster. compared to other Asian countries. We visited state‐owned companies as well as private companies. the Vietnamese factories are not able to make/produce middle‐to‐high quality fabrics. we will give recommendations to Bandolera about the production of garment in Vietnam. When fabrics of middle‐to‐high quality are needed. During the first 3 weeks in Ho Chi Minh City we had 19 appointments. Women fashion is not made in this region. Most garment companies (70%) are located in the south of Vietnam. Le Van Dao as Vice Chairman of the VITAS.Chapter 7 Conclusion and Recommendation In this chapter we will first give our conclusion of the executed research in the textile and garment market in Vietnam. and in general produce higher quantities. The advantage of abundant and cheap labor will become less important and less attractive over time. Ms. Besides the above mentioned. After that. This industry employs a large labor force (over 2 million workers). Nga and Mr. Mr. Also the brands. Mr. Somers who is owner of private company Venture International. Mr. These locations are within 2 hours driving from the centre of Ho Chi Minh City. Nowadays the Vietnamese textile and garment industry is less developed in terms of machinery and equipment. the lead/delivery time of garment as well as the cost price of garment increases. polyester and silk) are insufficient and of low quality to fulfill the needs of the local garment producers. when there is more demand for technical skills. despite of big investments by the government. Toan who is owner of Yen Bien Company and Mrs. This is an advantage for short deliver times to the harbor/airport for export of garment as well as import of fabrics (or other materials) etc.
Besides the order quantities. and arranging export. You have to remind people continuously of appointments you have made with them.000 pieces of basic cotton shirts or basic jeans. Bandolera is already participating in the Chinese and Indian market. but at this moment there are no concrete plans to solve this. they have quick turn‐a‐rounds (Bandolera has 16 collections per year) and want also high quality. Because of these activities they can keep the machines running and realize economies of scale. One small niche which is focused on small quantities/high prices and one big niche which is focused on high quantities/low prices. embroidery. Garment producers also prefer that the customer supplies all. Moreover. Therefore they prefer large batches/quantities of basic garment with less details/embroidery. and that Bandolera has to supply the fabrics and accessories. Based on the requirements we got several advices from different persons and companies that Bandolera should go to Hong Kong (or the areas within 800 km from Hong Kong). the VITAS and even the government notice the problem that it is much more difficult for European companies to find a Vietnamese garment producer. Even if Bandolera let their garment be produced in a state‐ owned company and the company arranges the import of middle‐to‐high quality fabrics. they can also contact state‐owned companies. when producing in Vietnam.000 – 10. They do notice the problem. but risks the fact that not all garment producers will accept their small order quantities for a reasonable price. a strong requirement of Bandolera is that garment producers can take care of all the extra activities related to producing garment: (producing) fabric. pricing in Vietnam is cheaper than in China and India (based on price estimations). We also noticed by observations and interviews that people in the North of Vietnam are more conservative and pragmatic. washing. This mainly applies for the fashionable products (with many details). are outsourced. agents. Also experts. However.000 pieces. printing. Especially private companies are smaller and are possible more willing to produce fashionable clothes for Bandolera.2
It seems to be that there are two niches in the garment industry. accessories.Especially for European countries it is difficult to enter the Vietnamese garment market because they order most of the times small quantities. In Vietnam we did not see any company who can offer all these activities by themselves. because language and cultural difference might lead
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. they have no or little experience with export. Pricing on FOB is becoming more common. US companies prevail in this big niche and place orders of >100. Fabrics of middle‐to‐high quality are most of the times (90%) imported. Based on the above mentioned we do not recommend Bandolera to let their garment be produced in Vietnam. it will be necessary to keep a close eye on the production. Let stand the C&F pricing method preferred by Bandolera. but is still considered as a risky business. the import of fabrics and accessories can increase the deliver times. buttons. It is also difficult to find the right private company. The level of English is sometimes very poor and Vietnamese will rather give a random answer than admitting not to understand the question or not knowing the answer to the question. However there is a chance that their order would be rejected because it is too small. zippers. if Bandolera let their garment be produced in Vietnam. Within these niches you can distinguish the private companies and state‐owned companies. but in the worse case scenario these 90 days can be crossed.
7. However it should be taken in consideration that in these companies the level of English is low. because they do not have a website or are no member of the VITAS. Probably they can arrange everything in 90 days. General informal trade barriers in forms of language and communication problems have a negative influence on the ease of doing business with Vietnamese producers. For American customers it is easier to find a producer because they want big quantities for low prices. sewing and finishing the product. Bandolera could produce basic garment in Vietnam. In the textile and garment industry is a certain ‘business culture’ noticed. and all the other activities besides cutting. Besides that. If Bandolera wants a Vietnamese garment producer who can produce orders of 5. Companies want to make high turnovers with high profit margins.
to mistakes and misunderstandings. Therefore we believe that Bandolera should consider carefully whether she wants to invest time and energy in entering this new and still unstable market.
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vinatex.volkskrant.com ‐ www.fibre2fashion.tier.vietnamnet.textilenepal. Thesis.com ‐ http://moeaitc.europa.english. Le van Dao.com ‐ www.vn/highquality/Det%20may‐giay%20dep.just‐style. company directory – garments (www. Directory 2006 ‐ Vietnam Textile and Apparel Association.com/sgtextile ‐ www.mekongsources. Institute of Social Studies.gov.iht.com/news ‐ www.com ‐ www.
Books ‐ Vietnam Textile and Apparel Association.hochiminhcity.vn ‐ http://zoek.wikipedia.com/garment ‐ www.vnanet.vietpartners.com ‐ www.gtz. Websites articles ‐ http://english.thingsasian.eu ‐ www. “Does ownership matter to enterprise performance?: a comparative study of private and state enterprises in Vietnam’s textile‐garment industry”.vn/en/directory/section4_chapter/textiles ‐ List of members of Vinatex (received from Mrs. Vice Chairman Vietnam Textile and Apparel Association (VITAS) Theses: ‐ Nghiem Lien Huong (2006).com) – Textile and garments (www.2. “Work culture.business‐in‐asia.vietnamnet.com ‐ www.vn/biz ‐ www.nl/artikel?text=kleding%20vietnam&FDOC=0&SORT ‐ www.com ‐ www.com
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.htm) Report VITAS ‐ Vietnam Textile and Garment Industry plays a very important role in the Economy of our Country – Presented by Mr.net/vietnam/exporttextile.html) ‐ http://itpc. Nghiem Huong) ‐ Mekong research.tw ‐ http://vietnamnews.com ‐ www.vn ‐ http://findarticles.gov.de/vietnam ‐ www. gender and class in Vietnam : ethnographies of three garment workshops in Hanoi”. ‐ Nguyen Manh Cuong (2004).com ‐ www. The Hague.com/industry9. 2007 First selection used lists of companies ‐ Directory of companies in Vietnam (Business in Asia.byte‐software. Quality – Credibility.vfabric. Universiteit van Amsterdam.ec.org.euromonitor.com ‐ www.htm) ‐ http://asemconnectvietnam.delvnm.business‐in‐vietnam.alphatrans.
Abbreviation list Process of fabric production Process of garment production Map of provinces of Vietnam Agenda in Vietnam and contact details of visited companies/contact persons List of rejected garment companies Checklist
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. 2. 5. 3. 7.
Overview of Appendixes
1. 4. 6.
Appendix 1 Abbreviation List
C&F CIF CMP CMPT EU FOB HCMC ISS US VITAS VN YKK Cost and Freight Cost. Making and Packing Cutting. Packing and Trimming Europe Free on Board Ho Chi Minh City International Social Studies United States of America Vietnam Textile and Apparel Association Vietnam recognized International
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. Making. Insurance and Freight Cutting.
The cotton comes off the picking machine in large bats. The cotton leaves the carding machine in the form of a sliver. At this point. palm leaves. rugs. A modern day cotton gin looks similar to a carding machine. it would spin together as you pulled it out. If you could open the door and pull out a sheet. Since combining several slivers produces a very thick rope of cotton fibers. People learned to weave thousands of years ago using natural grasses. Slight changes are made depending on the coarseness of the fiber or yarn desired. animal or synthetic fibers are twisted together to form yarn. fiber length and alignment. Each sliver will have thin and thick spots. Today weaving ranks as a major industry in many countries. Weaving is often completed on high speed looms. all ready to go to the next step. or integrity Machine Processing: yarn formation The machines used for different fibers vary slightly in the initial steps. But thin. spinning. leafstalks. The principal behind the technique is similar to a clothes dryer spinning full of sheets. and shipped to the cotton mill. quantity of fiber used. blankets. Different yarns and knitting needles may be used to achieve different end products. a large rope of fibers. is spun around into yarn and comes out.e. the cotton is sent through a cotton gin because the seeds have to be removed before carding. metal fences. closer together). The carders line up the fibers nicely to make them easier to spin. All of the rollers are covered in small teeth. several slivers are combined. by giving the final piece different color. and wool and synthetic fibers such as nylon and Orlon. knitting is a method by which thread or yarn may be turned into cloth. Craft workers also use varied fibers to weave baskets and hats. and other products by crossing two sets of threads over and under each other. The cotton then collects on a screen and gets fed through various rollers. wrapped up on a package. which serve to remove the vegetable matter. to loosen it up. and is then taken to carding machines. silk. and as the cotton progresses further on the teeth get finer (i. the ginned cotton is normally put into bales.
Appendix 2 Process of Fabric Production
Weaving is the process of making cloth. Several design of rotors are in use by different manufacturers of spinning equipment and are specialized for different types of fibers. and thin strips of wood. narrow strips of almost any flexible material can be woven. it is all packed together and still contains vegetable matter. or rotor. A picker looks similar to the carding machine and the cotton gin. After being harvested. The ginning process removes the seeds from the cotton fiber. the cotton is sent through a picker. but is slightly different. in that the fiber goes through many different rollers. directly after being combined the slivers are separated into rovings. and degree of twist. Knitting consists of loops called stitches pulled through each other. But weaving is not limited to cloth and textile products. A modern technique to spin is the use open end. The teeth on the gin are different from those on a carding machine. Spinning is an ancient textile art in which plant. In order to fluff up the cotton and remove the vegetable matter. When the cotton comes out of a bale. for machine processing a roving is about the width of a pencil. Next. The cotton is fed into the machine and gets beaten with a beater bar. Weaving plays an important part in the manufacture of screens. and rubber tire cord. The cotton boll is white. but once the fiber is ready to spin the process and machinery is pretty much universal. The active stitches are held on a needle until another loop can be passed through them. Sliver from the card goes into the rotor. Weavers use threads spun from natural fibers like cotton. The first cotton gin was produced by Eli Whitney. and by combining several slivers together a more consistent size can be reached. These rovings are then what are used in the spinning process.
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. weight. texture. The carding machine consists mainly of one big roller with smaller ones surrounding it. Characteristics of spun yarn vary based on the material used. Generally speaking. roughly spherical and fluffy.
creating yarn. exactly like a spinning wheel but just in a different configuration. which are feeding at several different speeds. The roving is pulled off a bobbin and fed through some rollers. The yarn is twisted through the spinning of the bobbin it is rolled on. If the roving was not a consistent size. then this step could cause a break in the yarn.
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. Spinning: The spinning machines stake the roving. This process was improved in the 1950s with the invention of the Wilson Yarn Clearer. This thins the roving at a consistent rate. or could jam the machine. thin it and twist it.
making samples. checking color shading and washing effect. 7. Recording and work with garment factory to separate garments according to color shading and shrinkage. Making first lot in bulk production. First samples are made. 9. The pattern is digitized into a garment CAD system which directs plotters and cutters. Washing fabric for separating fabric lots. Receiving garments and pre‐washed inspection. summit for customer approval and washing process records. This includes. analyze color shading and washing effect.
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. 3. Packing and delivery. Final inspection. 2. 4. 8. Then the pattern is used to cut fabric which is sewn into the finished garment. First the garment is designed and a pattern is made and marked. 5. testing washing effect. Rinse and drying. Pre‐treatment. 6. In general there can be distinguished 9 steps: 1. Wet processes. Fabric lots separation.
Appendix 3 Process of Garment Production
In this appendix we give a quick overview of an average production flow of garment making.
1 Provinces of Vietnam22
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. Appendix 4 Maps of Vietnam
2 Industrial zones of Vietnam23
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Nguyen Huu Tam Mr. Mrs. Nguyen Thanh Hai Mr.00AM Thai Tuan Textile & Garment Company (fabrics producer) Monday Tuesday Wednesday Thursday Friday Date & Time Company name
Mrs. Manning Mrs. Phan Minh Dung Mrs.00AM Hoa My Trading‐Service & Manufacture Company. ltd.00PM 09.00PM 23‐May
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. 07.00PM (NHABECO) 14‐May 09.00AM Thanh Cong Textile Garment JS Company 11.30AM (DOPIMEX) Nghiem Huong (contact person) / 05.00PM Company (VIGACO) Dong Phuong Knitting Company 15‐May 08.30AM Thang Loi International Garment JSC (VIGATEXCO) 02.00AM Phuong Dong 07.30AM 28 Company / AGTEX28 Viet Thang Garment Joint‐Stock 02. ‐ Binh Duong Province 02. Nguyen Le Nga Mr.1 Agenda in Vietnam
Appointments in Ho Chi Minh City (5 ‐ 23 May 2008)
Contact persons at company Msc. Mr. Nguyen Ha Nhu Lieu. Nguyen Thanh Luan
12‐May 13‐May 09.00PM Viet Thy Fashion Company. Phan Thi Kim Hong Mrs. ltd. Nguyen Tuyen Quang. Tran van Tan Mr. Department of Textile Engineering 11. Mrs. Thursday 8‐May 10.30PM Mai Lan Anh (company) 16‐May 09. Duong Thi Bich Lan Mrs. ltd. Phung Dung Mrs.30AM Phong Phu Corporation Nhabe Garment Company 03. Le Thanh Xuan Date & Time Company name Monday 5‐May 09.00AM Cholimex Garment Joinstock Company / Trading ‐ Service Enterprise 11.00PM Duy Thinh Company. Nguyen Tuong Vu Mrs. Pham Thi Kim Loan. ltd.00AM HCMC University of Technology.30AM Meeting Becamex IDC Corp. Nguyen Thi Kim Dung Contact persons at company Mr. Indo Pride International. Mr. Dang Thi Ngoc Bich Mr.00PM Nghiem Huong (contact person) Friday 9‐May 09.00AM Company name Protrade Garment Company. Marcus W. Vo Son Dien Mr. Dao Duy Thai. Tran Duc Dinh Mr. Tuesday 6‐May Wednesday 7‐May 07. Saigon 3 Garment Joint‐Stock Company (GATEXIM) Viet Fashion Company (Ninomaxx)
Date & Time Monday 19‐May Tuesday 20‐May Wednesday 21‐May Thursday Friday
22‐May 09.ltd.00AM 02. Ngo Hung Quy (Peter) Mr.
Appendix 5 Agenda in Vietnam and Contact Details
Appendix 5. Mrs.00AM Minh Anh Corporation 11. Bui Luong Hoa. Nguyen Thi Ngoc Truong Contact persons at company Mrs Nguyen Thi Anh Hong Mr. Ngo Thi Ngoc My Mr. Christina Nguyen Mrs.
com. Trading – Service Enterprise.30AM Thursday 3‐Jun Friday 4‐Jun
*No many company visits in Hanoi because of negative advice of many contact persons/experts
of the garment market
Appendix 5.F.agtex. sale executive Mobile : 0906 836 365 Email : trading@cholimexgarment. Mr. List of addresses of visited factories: AGTEX28 – 28 Company.30AM May 06.vn Website : www.00PM Tuesday 27‐ 09.
Appointments in Hanoi* (26 May ‐ 06 June 2008)
Company name VITAS Dutch Embassy Venture International Ministry of Industry and Trade. Mobile : 0919 976 065 Email : agtexhcm@gmail. including their mobile number and e‐mail address are shown.00AM May Friday 30‐ May Date & Time Monday 31‐ May Tuesday 1‐Jun 09.vn Cholimex Garment Jointstock Company. Somers (junior) Mrs.net Phan Minh Dung. HCMC Mrs.vnn. Le Van Dao Ambassador Mr. Le Thanh Xuan.com Website : www. Phan Thi Dieu Ha Contact persons at company Mr.com. J. Complete information can be found on the attached business cards. Haspel Mr.vn Website : www. director Mobile : 0906 639 068 Email : tuyenquang@dopimex. HCMC Nguyen Tuyen Quang.vn – firstname.lastname@example.org Dong Phuong Knitting Company. Export‐ Import department Company name Visit to 'Van Phuc Village' (silk village) Dutch Embassay Yen Bien Company Contact persons at company Mr.00PM Wednesday 2‐Jun 08.com.fpt. Toan Date & Time Monday 26‐ 09.dongphuong. HCMC Nguyen Thanh Hai.00AM May Wednesday 28‐ May Thursday 29‐ 09. Somers (senior).00AM 02. deputy manager sales and marketing dept Mobile : 0903 397 367 Email : email@example.com
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. assistant for R&D Dept. J.2 Contact Details
In the contact list only the name of the contact person.cholimexgarment.
Nguyen@phongphupromotion. HCMC Christina Nguyen. director Mobile : 0918 030 258 Email : hoamygwens@vnn. team manager Mobile : 0903 706 438 Email : firstname.lastname@example.org Nhabe Garment Company.com.com.vn Website : www. Viet Fashion Company. HCMC Duong Thi Bich Lan.com Website : www. manager assistant Mobile : 0908 227 783 Email : email@example.com‐underwear. HCMC Bui Luong Hoa.vn Protrade Garment Company. HCMC Mr. sales Mobile : 0916 306 060 Email : Christina@minhanhcorp.com. Nguyen Huu Tam. Nguyen Thi Anh Hong. marketing manager Mobile : 0913 657 376 Email : peter.com Minh Anh Corporation.vn Website : www.com. HCMC Phan Thi Kim Hong. merchandiser Mobile : 0983 869 184 Email : dung.vn Hao My Trading‐Service & Manufacture Company.nguyen@pdg. HCMC Nguyen Thi Kim Dung. Duy Thinh Company.vn Ninomaxx.com – oanh@mailananh. HCMC Mr. HCMC Mrs.vn Mai Lan Anh Garment and Trading Company. CEO Mobile : 0903 939 648 Email : firstname.lastname@example.org Website : www.com Website: www.vn Phong Phu Trading & Investment Promotion Joint Stock Corporation (PPP).protradegarment.mailananh. Phung Dung.email@example.com Saigon 3 Garment Joint‐Stock Company.com Website : www.com.com.phongphupromotion. marketing executive Mobile : 0908 262 890 Email : Hong. HCMC Phu Trách Tuong Hieu Mobile : 0983 279 038 Email : firstname.lastname@example.org Phuong Dong Garment Joint‐Stock Company. Ngo Hung Quy – Peter. HCMC Mr.vn Website : www.com.nhabe. trading manager Mobile : 0918 397 707
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com.com – email@example.com. lecturer Mobile : 0918 189 345 Email : firstname.lastname@example.org – Vietnam.vn – email@example.com Indo Pride Internationa.vn Website : www.net Website: www.com Viet Thy Fashion Company. HCMC Tran Duc Dinh. Mobile : 0903 698 032 Email : firstname.lastname@example.org Website : www.vn Website : www.com – trantan@thangloi. Dang Thi Ngoc Bich.4) 2 205 437
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.vn Thai Tuan Textile & Garment Company. department of textile engineering Mr.vn Thanh Cong Textile Garment JS Company. merchandiser of planning import‐export dept. HCMC Tran Van Tan.vn – detthangloi@hcm. deputy export manager Mobile : 0913 925 035 Email : email@example.com@firstname.lastname@example.org.@gmail. managing director Phone : (84) 8 830 0404 Email : marcus@indoprideapparel.Email : kimhong@saigon3. HCMC Mrs.saigonnet. HCMC Mr.thaituanfashion.com. Mobile : 0903 310 006 Email : dinh@vigaco. director Mobile : 0903 910 952 Email : vity@mail. vice manager of business dept. export director Mobile : 0918 101 536 Email : bich. export executive Mobile : 0909 461 145 Email : loan.com Institute for Social Studies.imex@thanhcong. Hanoi Mrs. deputy director general.com Thang Loi International Garment JSC.net Mrs.vietthy. Pham Thi Kim Loan. export – import department Phone : (84.com. Dao Duy Thai.vn Viet Thang Garment Joint Stock Company.indoprideapparel.com. HCMC Nguyen Thi Ngoc Truong. Hanoi Phan Thi Dieu Ha.vn Website : www. Manning.. Nguyen Tuong Vu. Duong Thi Nga Mobile : 0912 440 508 Email : duongnga.com Ministry of Industry and Trade.com Website : www.iss.thanhcong.com. Marcus W. HCMC Mr.com List of addresses of contact persons (experts) Ho Chi Minh City University of Technology (HCMUT).
Hanoi Mr.vn Vietnam Textile & Apparel Association (VITAS).vn
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.vn Yen Bien Company LTD.garment.org. Nguyen Khanh Toan.com.vietnamtextile.vn Website : www.com Website : www. vice chairman Mobile : 0913 219 514 Email : email@example.com. Hanoi Mr.vn – info@vietnamtextile. Le Van Dao. director Mobile : 0903 444 019 Email : firstname.lastname@example.org.Email : haptd@moit.
(HAICATEX) Ho Guom Joint‐ Stock Garment Company Hoa Viet Synthetic Fiber Co.Appendix 6 List of Rejected Garment Companies
North of Vietnam
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Company name Asia Queen Silk Company Binh Minh Company Chien Thang Garment Company (CHIGARMEX) Dap Cau Garment Company (DAGARCO) Dong Xuan Knitting Company (DOXIMEX) Duc Giang Garment Company (DUGACO) Fsilk Hanoi Textile‐Garment Company (HANOSIMEX) Ha Noi Industrial Canvas Textile Co. Hoang Thi Loan Knitting Company Hop Thanh Company Hung Yen Garment Company (HUGARCO) March 8 Textile Company (EMTEXCO) Nam Dinh Garment Company (NAGACO) Nam Dinh Textile Company (NATEXCO) Nguyen Hoang Exim Company Song Hong Garment Company Thang Long Garment Company (THALOGA) Trade & Service Company No 1 (TRASCO) Vinh Phu Textile Company (VITEXCO)
Place Hanoi Hanoi Hanoi Bac Ninh Town Hanoi Hanoi Hanoi Hanoi Hanoi Hanoi Hanoi Vinh City Thai Binh Hung Yen Town Hanoi Nam Dinh City Nam Dinh City Hanoi Nam Dinh Hanoi Hanoi Viet Tri City
no e‐mail or telephone reply / webiste error X X X X X X X X X X X X X X X X X X X X
no English speaking X
too big minimum order quantity X X
no women fashion X X X
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23 24 25 26 27 28 29 Company name Danang Textile Danang Silk and Agricultulutal Company Hoa Tho Textile‐Garment Company (HOTEXCO) Hue Textile Company (HUTEXCO) March 29 Textile & Garment Company Nhat Hoa Silk Nha Trang Textile Company (NHATEXCO)
Place Da Nang Da Nang Da Nang Hue City Da Nang Da Nang Nha Trang City
no e‐mail or telephone reply / webiste error X X X X X X X
no English speaking
too big minimum order quantity
no women fashion
South of Vietnam
30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Company name AN PHUOC Garment. Wear Doc Lap Garment Company (DOLIMEX) Dong A Textile Company (DATEXCO) Dong Nai Garment Company (DONAGAMEX) Dong Nam Textile Company (DONATEXCO) Dong Tien Import‐Export Company (DOTIMEX) Fashion Trading Manufacturing Garment Company No. 10 (GARCO‐10) Gia Dinh Textile Hoa Binh Garment Company (PEGARIMEX) Hung Nga Fashion Company Hung Thanh Dat Company Hung Xuong Company Huu Nghi Garment Company (HUGAMEX)
Place HCMC HCMC HCMC HCMC HCMC HCMC HCMC HCMC Can Tho HCMC HCMC HCMC HCMC HCMC HCMC HCMC HCMC
no e‐mail or telephone reply / webiste error X X X X X X X X X X
no English speaking
too big minimum order quantity X X
no women fashion X X X X
produces fabrics X
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. Bach Tuyet Cotton Corporation Binh Dinh Export Textile & Garment Company D..K Saigon NCCK. Embroidery & Shoes Co. Ltd.
. (TEXGAMEX) Saigon Wool & Trading Corporation Sao Mai Corporation Senti Fashion (ladies) Thoi Trang Han Co.ltd Vinh Hung Textile Garment Pte
HCMC HCMC HCMC HCMC Phan Tiet HCMC HCMC HCMC HCMC Dong Thap HCMC HCMC Thai Binh City HCMC HCMC HCMC HCMC HCMC HCMC
X X X X X X X X X X X X X X
X X X
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.47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65
Legamex company My Nga Garment Co. Nghe Phong Textile Company Ninh Binh Garment Company Phan Tiet Garment Company Phuoc Long Textile Company (FULTEX) Phuong Nam Garment Company (FUNAGAMEX) Saigon Textile‐Garment Co. Traly Jute Company (TRAJUCO) Viet Hung Company Viet Tien Garment Company ‐ VTEC Vietnam Blanket ‐ Wool Company (BLATEX) Vietnam Cotton Company (VCC) Vietsun Co.
Criteria judgement of Vietnamese garment producers
General Visited the head office Visited the factory Do they have a company profile? Pricing on FOB Pricing on CMPT Pricing on C&F Produces garment (finished) Produces textiles/fabrics Number of workers Production capacity per week Production capacity per model What kind of machinery do they have spinning lines weaving looms knitting machines dyeing machines finishing machines sewing machines multi‐head embroidering machines other machines is it al working How clean is the factory Do they work organized ISO 9001:2000 ISO 14000 SA 8000 yes/no 1 2 rating 3 4 5 when + address. On the attached DVD the checklists per factory are included. (and accompanied by lecturer?) if yes.Appendix 7 Checklist
This checklist is used during all the company (factory) interviews/visits. (and accompanied by lecturer?) when + address. include attachment specify kind of garment <‐> period specify kind of garment <‐> period specify brandnames of machinery
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Communication/Internationalization Grade of English Use of linguist Export to the EU/US Who are their customers Fabrics/Textiles Which fabrics are they working with Are textiles homemade What is the quality Is quality stable Do they have inventory of homemade textiles Are textiles imported Is quality stable Imported from China? Also from other countries? Deliver times when textiles are not in stock Garment Which kind of garment do/can they make Do they understand our product specifications Which brand of yarns do they use to stitch Which brand of interlining do they work with What is the quality of the lining What is the quality of the shoulderpads/which brand What is the quality of the workmenship Do they have a own laundry(garment washed) Do they make patterns by thereselfs if yes. on which computersystem?or by hand? if no. take samples of fabrics middle price level. not high end price level specify from which companies specify from which countries. judged by Bandolera if sample. judged by Bandolera if sample. not cheap shit. and which companies specify specify specify ('plakvaseline') voering' ‐‐> if sample. judged by Bandolera specify specify
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. who is making them?customer? Accesoires/Trims Which accesory are they working with
specify which countries specify the companies specify.
and compare with China/India specify. Concluding General interpretation of the factory Pictures made of factory? Pictures made of different styles of garment? Potential company for Bandolera?
specify.Do they use YKK zippers What kind of buttons do they use Samples Do they have a sample room How many people are working there How big is capacity of sample room Can they show us samples Can they also show the current production Are they making new samples Did they make a production of these samples How many proto's can they make in 1 day Can they make samples for us Do they send it to Bandolera? Can we take samples with us (i. B‐choice) Deliver times Deliver times of fabric when not in stock Deliver times from scratch Deliver time of proto within 21 days? Total production deliver time within 90 days? Pricing Prices of already produced articles Prices of our productspecifications based on 1500 pcs.e. and compare with China/India
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. maybe with pictures specify amount (means from the beginning of drawing till final production sample) if no. specify specify.