According to the Textile Outlook International from the business information company Textiles Intelligence strong growth is predicted for the Vietnamese textile and clothing industry between 2016 and 2020, production may rise 12-14 per cent per annum. Exports are expected to rise by 15 per cent per annum and, will set to reach US$50 billion by 2020. For a start, Vietnamese companies will have to deal directly with foreign buyers and produce more garments on a so-calledfob (free on board) basis.

Also, only a small percentage of Vietnamese clothing is made from domestically produced fabric and this needs to increase significantly. Additionally, there needs to be a shift from producing lower end clothing items to producing high quality, high value fashion items. There also needs to be a move towards more efficient sourcing through vertical integration, as well as an improvement in productivity by enhancing research, training and development. The industry has already begun to make significant investments in its textile manufacturing facilities. Moreover, Vietnam was the biggest investor among these countries in ring spindles and open-end rotors.

There has also been a marked expansion in the knitting sector. Not all Vietnamese clothing exports benefit from preferential tariffs under these FTAs. Development has also been assisted by government success in negotiating a number of free trade agreements (FTAs). Vietnamese fabric production accounted for 15 per cent of the clothing industry's fabric needs in 2015. However by pursuing a programme of specialization and modernization the government is promoting opportunities for the textile and clothing industry. Its objective in doing so is to produce more items with greater added value, and it is significant that a number of internationally recognized brands are increasingly active in the country. There is also scope for clothing producers to enhance their product offerings by developing their own brands and becoming original design manufacturers (ODMs) rather than mere subcontractors. However, significant opportunities will arise for supplying Vietnam's growing domestic clothing market.

Textile Outlook International is published six times a year by Textiles Intelligence. Each issue provides an independent and worldwide perspective on the global fibre, textile and apparel industries.