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Vinatex profits soar after equitisation
The equitisation of Viet Nam National Textile and Garment Group (Vinatex) helped the company achieve a profit of VND521.75 billion (US$32.6 million) last year, two and a half times that of 2006.
Equitisation of member companies had spurred growth since 2005, according to Vinatex Deputy Director Nguyen Huu Binh.
After the first member companies were equitised, Vinatex’s profits rose to VND100 billion in 2005, and have risen each year since then.
Before equitisation, Vinatex member Viet Thang Textile Company often suffered yearly losses of nearly VND100 billion.
But the company was organised into subsidiaries that specialise in spinning, dyeing and tailoring, and last year Viet Thang made a net profit of VND40 billion ($2.5 million).
Similar successes have been seen at other Vinatex subsidiaries, including Hue Textile and Garment, Vinh Phu Textile, Chien Thang Textile, Binh Dinh Garment and Phuoc Long Textile.
Vinatex General Director Vu Duc Giang said profits at a number of member companies had even exceeded planned targets.
They included Phu Bai Fibre, Nha Be Garments, Ha Noi Industrial Textiles, Viet Tien Garments and Phuong Dong Garments.
Also seeing high profits were Hoa Tho Garments and Textiles, Phong Phu, Viet Thang, Garments No10, Nam Dinh Garments and Ho Guom Garments.
The biggest earners, however, were the Viet Tien Garment Corporation and the Phong Phu Textile Corporation, each with profits of VND100 billion for the year.
After equitisation, Vinatex reorganised its trading and production activities, and improved its administration and financial management.
The partial privatisation had helped the company withstand the blows of domestic and world market fluctuations, Giang said.
Over the last two years, the price of materials, fuel and transport fees rose, but textile companies had to maintain their price levels.
Moreover, most textile apparel companies faced a serious shortage of skilled workers and technicians.
The industry also had to contend with the monitoring programme imposed by the US, the biggest export market for Viet Nam’s textiles and garments.
Under the programme, which exists until the end of this year, the US oversees garment exports to ensure that Viet Nam is not dumping its products on overseas markets.
Vinatex officials said it was also battling competition from major textile-producing countries, such as India, Pakistan, Bangladesh and China, as well as the increasing number of foreign retail apparel companies now setting up shop in Viet Nam.
Giang said the rest of the companies would be equitised this year.
The company continues to upgrade production, he said, but was also beginning to focus more on fashion accessories and the promotion of locally made products.
Other objectives of Vinatex’s development strategy include the construction of department stores selling apparel. The company would also encourage the public to buy made-in-Viet Nam goods, Giang said.
VNS
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