EDITOR’S NOTE – After 30 years in Texas, 22 years working with the producers of Plains Cotton Growers Inc., in Lubbock, Texas, Roger Haldenby moved to Vietnam as advisor to the Vietnam Cotton and Spinning Associ-ation, the national organization representing interests of cotton producers and cotton yarn spinners. In this report, he talks about the emergence of the spinning industry in Vietnam.
Vietnam’s Doi Moi Reforms of 1986 brought change to this developing nation’s fiber-to-textiles supply chain, and in two decades transformed it into one of the most dynamic in the world. Although China is a huge market, “China plus one,” with the one being Vietnam, is a strategy coming of age.
In 2000, Vietnam had hardly a million spindles turning cotton into yarn, mostly in State Owned Enterprises (SOE). Then, privately owned spinning mills scarcely existed but, by 2005, their number swelled as local entrepreneurs utilized a young and enthusiastic workforce to grow their newly formed Joint Stock Companies (JSC).
In January 2007, Vietnam became the 150th member of the World Trade Organization with its yarn, textile and apparel industries forming a backbone for the developing nation’s import and export trade. By 2011, continued investment by Vietnamese JSCs, expansion by SOEs, along with a growing number of mills backed by foreign direct investment, saw the number of spindles and rotors leap to well over four million.
In Asian philosophy, the concept of yin and yang is used to describe how polar opposites or seemingly contrary forces are interconnected and interdependent in the natural world. Somehow, this mirrors to me the relationship between the U.S. cotton production industry and the growing Vietnamese cotton spinning industry.
The United States prides itself on the quality of the cotton it grows – distinguishable bale-by-bale through its HVI classing. Vietnamese spinners pride themselves on the quality of the yarns they produce. The United States does not have enough domestic cotton consumption for its own production. Vietnam does not have enough cotton production for its own consumption.
Cotton Council International and Cotton Incorporated do an outstanding job of gaining and retaining U.S. cotton market share around the world but, when all is said and done, U.S. cotton is generally priced higher than many other growths available to spinners. And price, not value, is the No. 1 factor in most cotton transactions.
Spinners Need Support
The value of modern varieties to U.S. producers, quantified in quality and yield enhancement, is irrefutable. Increased pounds of cotton having qualities of longer staple and whiter, brighter color, along with economic and agronomic benefits derived from GM technology, have allowed U.S. producers to realize tremendous improvements to their bottom lines.
However, it’s not easy to quantify those values to the spinner. The qualities that add value for the producer actually add cost to the spinner.
Nguyen Hong Giang, General Secretary of VCOSA, told me, “Our spinners want to buy cotton that allows them to produce yarn that meets their customer specifications. If they produce yarn superior to those specifications, they get paid no more for it. In our top mills, the workforce and equipment are first class, but we must learn more about how to reduce operational and waste costs, thus increasing profitability.”
Just like U.S. cotton farmers, if Vietnamese spinners are to remain competitive in today’s markets with today’s raw material prices, they must compete with consistent quality, lowered costs and value.
Contact Roger Haldenby at (806) 853-9148 or firstname.lastname@example.org.