PD&B Realizing the Strategic Goal of “One-stop Destination” & Forming a Strong Knitted Textile Chain

In July, the Vinatex Fashion Product Development and Business Center (Vinatex PD&B) officially begins operations. This is one of the new sectors within the operational model of the Vinatex Fashion Center. On this occasion, Vietnam Textile-Garment and Fashion had an interview with Mr. Vuong Duc Anh, Director of the Vinatex Branch – PD&B.

*Congratulations on the official launch of the Vinatex Fashion Product Development and Business Center. Could you please share the objectives behind the establishment of the Center in the current phase?

Aligning with Vinatex’s strategic vision approved by the Annual General Meeting of Shareholders, the objective is to become a leading destination capable of providing comprehensive green fashion solutions for corporate customers in the global textile and garment supply chain by 2030. This includes becoming the leading destination in Vietnam and the region. In the medium term, the goal is to become an all-in-one destination for common-knitted products. The establishment of the Vinatex PD&B Center is the necessary condition to realize the strategic goal of becoming “a one-stop destination” and forming a strong knitted textile supply chain.

The establishment of the Center also aims to leverage and enhance the existing advantages in scale and reputation of the Group. With a spinning capacity of 190,000 tons per year, a knitting capacity of 25,000 tons per year, a weaving capacity of 170 million meters per year, and over 100 garment factories nationwide producing more than 400 million products per year, Vinatex has the necessary conditions to connect and form a closed supply chain from spinning, weaving, dyeing, finishing, to garment manufacturing. This distinguishes Vinatex from the majority of other textile and garment factories in the country, which are mainly pure garment enterprises.

The lessons learned from COVID-19 and the past two years indicate that when global textile demand decreased by nearly 30% compared to pre-pandemic levels, the business model of the global textile garment industry underwent significant changes. Buyers now tend to seek suppliers capable of providing “added value” with integrated supply chains and comprehensive services that meet their requirements quickly, conveniently, and accurately. They aim to become collaborative partners rather than just simple processing factories. It is required that manufacturers undergo qualitative changes, building teams and operational systems that meet new customer requirements, and Vinatex is no exception. The establishment of the PD&B Center is a qualitative change in building a market development team, developing new products, and creating Vinatex’s product brand.

* How does the Center operate in terms of model and methods, sir?

The Vinatex PD&B Center has built a team and modern facilities meeting international standards, following green and sustainable trends. The Center’s building has achieved the Gold Lotus green building certification, aligning with the Group’s strategy to achieve net-zero emissions. The Center primarily focuses on developing FOB, ODM, and OBM products for both export and domestic markets. It is fully equipped to provide comprehensive solutions to customers from the design (including 3D design), selecting materials with a showroom and diverse fabric library. The standard and creative studio supports customers in sample development, pricing, sample sewing, fitting, and managing production orders at factories. The quality control lab is equipped to meet customer requirements for developing new products.

By partnering with the Vinatex PD&B Center, customers receive comprehensive product development solutions based on the principle of “Harmonized Benefits – Shared Risks.

*What is your assessment of the current demand for the knitted textile sector in the domestic and global markets? What are Vinatex’s development goals for the knitted textile sector?

In the global demand for textiles and garments, knitted products usually account for 50%, being a highly competitive, low-cost, and easy-to-produce segment. Competitors like Bangladesh and India have price advantages, but we have identified that the advantage of linking the knitted textile chain will allow us to “win” in terms of delivery speed and product quality. This is because we can control quality from raw materials to finished fabric. Additionally, we can comply with the rules of fabric-forward or even yarn-forward when exporting to Europe and CPTPP member countries, benefiting from a 0% import tax rate. This is a unique advantage of Vinatex when leveraging our internal chain linkage.

Additionally, we are confident because the “Made in Vietnam” brand is distinct from “Made in Bangladesh, Pakistan, India, etc.” Buyers always have a certain “room” in their purchasing basket for sourcing and producing knitted products in Vietnam. The key is knowing how to approach and leverage this “room” with customers.

The effectiveness of orders is determined by the final garment product, rather than evaluating the effectiveness separately for yarn or fabric stages.

Our goals for knitted fabric production capacity are to double every five years, with the following targets:

50% of the output using internal yarn from member units

50% of knitted fabric is used in the garment sector within member units, producing 50 million garments per year.

*Could you share the initial steps of the center after the official launch?

We are committed to a scientific and receptive approach, listening and learning from the operational experiences of member units to choose and apply the most suitable and effective methods for the Center’s operations.

Establishing a close linkage between the Center and the factory system at member units, to become “one”, to enhance the overall operational efficiency of the system. The linkage needs to be standardized using a common language, ensuring smooth communication and prompt response.

Combining a team of experienced and creative young people to drive the Center to operate effectively from the beginning.

Leveraging shared resources to develop both the export and domestic markets, building on the existing retail distribution system, and expanding new sales channels, under Vinatex’s brands.

* What are your expectations for the operations of the Vinatex PD&B Center? To build trust with customers and establish a comprehensive supply chain for corporate clients, what values do you believe the Center should aim for?

Through market research, we believe that the global fashion textile and garment market will always recover after the quiet phase of the global economy. According to reputable organizations, Vietnam remains a country with the potential to develop the fashion textile garment industry over the next decades. This market always has room for growth for enterprises with the right strategies, superior productivity and quality, tightly knit and professional supply chain linkages, and the ability to find a unique path that meets the new demands of the digital economy and green economy with appropriate steps.

We expect that the Center will open up a new direction in R&D products in the future, connecting textile-garment enterprises in a closed chain built on the reputation and quality of products. In the immediate future, we focus on finding and developing new customers and new orders, based on close links with the market and technical departments at factories, to respond quickly to customer requirements from the first interactions.

It’s the first step that counts. To build trust with customers, I believe that firstly, we must build trust with our leadership and member units through sincerity, receptiveness, determination, and scientific methods, to leverage the collective strength of the entire system.

This is a new and unique mission, in the uncertain market. The Center hopes to receive the guidance and support of the Group’s leadership, the Group’s departments, and the enterprises within the Vinatex system. This will allow us to have a solid foundation to fully utilize our capabilities, creativity, and efforts to find appropriate directions in the R&D and fashion business.

Thank you!