SUPPORTING INDUSTRIES: KEY FOR STRONGER TEXTILE-GARMENT DEVELOPMENT

Vietnam’s textile and garment sector is one of the economy’s key export industries, with about 7,000 enterprises and nearly 3 million workers. The country now ranks among the world’s top three textile and garment exporters, behind only China and Bangladesh. However, the industry faces a major challenge: heavy reliance on imported raw materials and accessories. This is why supporting industries for textiles have become a decisive factor in driving sustainable growth and increasing domestic value-added.

Textile supporting industries, including the production of input materials, have become a key driver of sustainable growth and higher domestic value-added

Challenges for textile supporting enterprises

In 2024, Vietnam’s textile and garment exports reached about US$43.5 billion, up 11% year-on-year. In the first eight months of 2025, exports hit US$30.76 billion, reflecting a strong rebound after a difficult period.

Textile supporting industries include the production of input materials (yarn, fabric, dyeing-finishing), accessories (thread, zippers, fasteners, garment components), processing chemicals, as well as quality treatment, packaging, and domestic logistics. According to the Ministry of Industry and Trade, more than 7,000 enterprises operate in supporting industries overall, with 1,461 dedicated to textiles. Most are small and medium-sized businesses.

In reality, small scale, limited capital, lack of advanced technology, and weak linkages are the main weaknesses holding back development. Many supporting industry enterprises lack the capacity to produce high-tech products or face competitive pressure from lower-cost imports.

A survey of textile enterprises in recent years highlights recurring burdens: access to working capital, input material costs, and market risks such as foreign exchange and logistics. Resolution 43/2022/QH15 on fiscal and monetary support for businesses also emphasized measures for textiles, including tax reductions, subsidized short-term loans, and working capital assistance. Yet, practical implementation still faces barriers to access.

For this reason, strong and comprehensive development of textile supporting industries is vital to reduce import dependence, stabilize domestic supply chains, and enhance value-added and competitiveness of Vietnam’s textile enterprises.

Banks, including ABBANK, have launched specialized financial packages for garment and yarn producers

Strengthening capacity requires integrated solutions

One of the biggest hurdles for supporting industries is high capital requirements and financial costs. Many businesses in this field have thin cash flow and face high non-performing loan risks if orders or production conditions fluctuate. Traditional banks are also cautious about providing large loans without strong collateral or a solid credit record.

Recognizing this, An Binh Commercial Joint Stock Bank (ABBANK) recently launched a specialized financial package for garment and yarn producers, with textile supporting industries as major beneficiaries. The package offers loans with diversified collateral, or even unsecured loans up to 80% of the credit limit; preferential L/C issuance deposit rates from 0%; export document discounting of up to 100% of receivables; and preferential VND loan interest rates starting from 2.35% per year for enterprises with USD export revenue, among the lowest in the market. ABBANK is also waiving 100% of international payment fees for eligible transactions, reducing cross-border trade costs. For supporting industry enterprises, unsecured loans of up to 80% create new opportunities without large asset pledges, while export document discounting and reduced transaction fees ease the financial burden of trade, a particularly heavy pressure for smaller enterprises.

However, financial support alone is not enough for sustainable growth. Stronger linkages between supporting industry enterprises and major textile manufacturers are essential. Building domestic supply chains can expand order scale, improve quality control, and reduce trading costs.

Supporting industry firms also need to modernize production lines, comply with green standards and international technical requirements, and position themselves as reliable suppliers for both domestic and export markets. At the same time, they must develop skilled technical human resources with expertise in materials, chemical processing, and automated machinery operation. This is currently a weak point that requires closer cooperation between schools, businesses, and industry associations.

According to Nguyen Thi Tuyet Mai, Deputy Secretary-General of the Vietnam Textile and Apparel Association (VITAS), alongside opportunities to expand domestic consumer demand, textile enterprises must be more proactive in developing local supply. A raw materials development center has been established to address the challenge of input self-sufficiency for the textile and footwear sector, an important factor for sustainable growth.

The Ministry of Industry and Trade is also continuing to implement policies to promote domestic supporting industries, including localization of raw materials and support for domestic product distribution.

Supporting industries for textiles are not just a matter for small businesses but a strategic lever to enhance competitiveness across the sector. If they are strengthened, Vietnam can increase value-added in the textile supply chain, reduce dependence on foreign inputs, and build a sustainable Vietnamese textile brand on the global stage.

Source: VCCI