DECISION No. 161/1998/QD-TTg OF SEPTEMBER 4, 1998 ON THE APPROVAL OF THE OVERALL PLANNING FOR DEVELOPMENT OF THE TEXTILE AND APPAREL INDUSTRY TILL THE YEAR 2010

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of September 30, 1992;

Pursuant to the Regulation on Investment and Construction Management issued together with Decree No.42-CP of July 16, 1996 and Decree No.92-CP of August 23, 1997 of the Government;

At the proposal of the Ministry of Industry (in Official Dispatch No.1676/KHDT of May 25, 1998) and proceeding from the evaluation report of the Ministry of Planning and Investment (in Official Dispatch No.5753/BKH/CN-VPTD of August 17, 1998),

DECIDES:

Article 1.- To approve the overall planning for development of Vietnam's textile and apparel industry till the year 2010, which has been elaborated by the Ministry of Industry, with the following principal contents:

1. The objectives:

The development objectives of the textile and apparel industry till the year 2010 are: To promote export in order to increase the foreign-currency earnings for debt payment and enlarged reproduction through the expansion of production establishments, to satisfy the domestic consumption demand in terms of quantity, quality, categories and prices; to gradually make Vietnam's textile and apparel industry a spear-head export line, thus contributing to the economic growth, job creation and successful implementation of the policy on national industrialization and modernization.

2. The viewpoints on the planning for development of Vietnam's textile and apparel industry till the year 2010 include the following contents:

- Regarding the technological investment:

To harmoniously combine intensive investment, renovation, expansion with new investment. To quickly replace the obsolete equipment and technologies, upgrade the equipment which are still useful, add new equipment and renew technology(ies) and equipment, in order to raise the quality of products.

- Regarding the consumption markets:

Overseas markets: To consolidate, maintain and develop the foreign trade relations with the traditional markets, to seek access to and gain momentum for development into markets with great potentials and regional markets. To gradually integrate into the AFTA's market and WTO's market.

Domestic market: To meet the demand for domestic textile and garment products by raising the product quality, lowering prices, diversifying product items, satisfying the tastes and purchasing power of people of all strata.

- Regarding the investment capital and the reorganization of enterprises:

To diversify the capital sources and modes of mobilizing investment capital, to bring into play the internal resources and expand foreign direct investment for development. To accelerate the equitization of garment enterprises and step by step equitize a number of textile enterprises, thus meeting new requirements and tasks of the industry.

- Regarding the planning of production establishments:

Based on the status quo, to consolidate and develop three textile centers of the country: the Eastern-South Vietnam and Mekong River Delta region, the Red River Delta region and the Central Vietnam coastal region. For the apparel industry, to develop it nationwide, with priority given to the development of export garment establishments located in areas convenient for traffic, near river ports, sea ports or airports.

- Regarding the raw materials development orientation:

To raise the ratio of domestic materials used in the production of export garment products with a view to increasing the added value of the apparel industry. To develop cotton and silk raw materials areas in order to ensure the adequate supply of textile raw materials, lower the production costs and scale down the import of raw materials.

- Regarding the training of technical cadres and workers:

To diversify the training forms and levels in order to increase the number of technical cadres and workers meeting the development requirements of the textile and apparel industry.

3. The targets of the development planning:

- The production and export targets:

Target Unit Year

2000 2005 2010

- Production

+ Silk Million meters 800 1,330 2,000

+ Knit products Million products 70 150 210

+ Garment

products

(standardized) Million products 580 780 1,200

- Export

turnover Million USD 2,000 3,000 4,000

+ Textile

products Million USD 370 800 1,000

+ Garment

products Million USD 1,630 2,200 3,000

- The textile raw materials development targets:

Raw materials Unit The year 2000 The year 2010

- Cotton

+ Acreage Ha 37,000 100,000

+ Cotton yield Ton/ha 1.4 1.8

+ Seed cotton output Ton 54,000 182,000

+ Fiber cotton Ton 18,000 60,000

- Mulberry and silk

+ Mulberry acreage Ha 25,000 40,000

+ Silk output Ton 2,000 4,000

- The total investment capital requirement till the year 2010:

Unit: Million USD

- Intensive investment 756.9

+ Textile 709.0

+ Apparel 47.9

- New investment 2,516.4

+ Textile 2,306.4

+ Apparel 210.2

Total 3,973.3

The total investment capital requirement till the year 2010 is only an oriented target which the Ministry of Industry shall base itself on together with the practical conditions of each period to make appropriate calculations and adjustments.

Article 2.- Assignment of implementation tasks:

- The Ministry of Industry shall, as the industry managing ministry, coordinate with the ministries, branches and People's Committees of the concerned provinces and cities directly under the Central Government in organizing the implementation of the overall planning for development of Vietnam's textile and apparel industry according to the contents prescribed in Article 1 of this Decision.

- The Ministry of Industry shall assume the prime responsibility and work with the Ministry of Agriculture and Rural Development, the Vietnam Textile and Apparel Corporation and the concerned localities on the planning and the mode of building and developing cotton and mulberry-silk raw materials areas, as well as the purchase and processing of these raw materials.

- The Ministry of Industry shall coordinate with the Ministry of Planning and Investment, the Ministry of Construction, the People's Committees of the concerned provinces and cities directly under the Central Government and the Vietnam Textile and Apparel Corporation in determining the lists, locations and scale of projects which require new investment as well as those which need to be renovated and/or expanded in each period in line with the production area planning.

- The Ministry of Trade, the Ministry of Industry, the Ministry of Finance, the State Bank of Vietnam, the Ministry of Planning and Investment and the Vietnam Textile and Apparel Corporation shall take the initiative in working out plans for developing new export markets and seeking domestic and foreign capital sources, including preferential loans, to meet the investment capital need of the textile and apparel industry.

- The Ministry of Industry and the Vietnam Textile and Apparel Corporation shall elaborate and submit to the Prime Minister the plan and measures for reorganizing production of the textile and apparel industry from now till the year 2000, including detailed list of enterprises to be equitized.

Article 3.- The Ministry of Industry and the Vietnam Textile and Apparel Corporation shall base themselves on the objectives, viewpoints and targets stated in this planning to draw up five-year plans for development investment suitable to the country's socio-economic situation.

Article 4.- This Decision takes effect 15 days after its issuance. The Ministry of Planning and Investment, the Ministry of Construction, the Ministry of Industry, the Ministry of Trade, the Ministry of Finance, the Ministry of Education and Training, the Ministry of Labor, War Invalids and Social Affairs, the State Bank of Vietnam, the People's Committees of the concerned provinces and cities directly under the Central Government and the Vietnam Textile and Apparel Corporation shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister

NGO XUAN LOC