CENTURY SYNTHETIC FIBER CORPORATION MANAGEMENT PRESENTATION 2017 BUSINESS PERFORMANCE & 2018 PLAN April 17 th 2018
GROWTH PROSPECTS OF TEXTILE AND APPAREL INDUSTRY Vietnam is transforming into a new hub for textile and garment production Global textile industry is recovering, in which Vietnam has the fastest growth rate. VN is gradually taking market shares in major textile import markets. Many global brands have been relocating garment orders from China to VN Vietnam has advantage over its peers thank to favourable tariff treatment under various trade treaties (VJFTA, VKFTA, EVFTA, CPTPP). There is a growing flow of investments into local textile and dying subsector, transforming Vietnam into a major supplier of fabric and accessories in South East Asia. Polyester filament excels natural fibers in both growth rate and share in total consumption. However, the trend of price competition has been a challenge for most enterprises in the industry. However, the level of price competition in the high end market segment is always lower and likely to be profitable.
GROWTH PROSPECTS OF TEXTILE AND APPAREL INDUSTRY Global textile industry is recovering, in which Vietnam has the fastest growth rate. VN ‘s textile export volume growth rate in Global textile import volume growth rate in 2017 of 3-major markets 2017 in 3-major markets 6.5% 9.4% 9.2% 8.3% 7.2% 6.1% 3.2% 2.6% 2.5% 2.4% 2.5% US EU*** Japan -0.8% US EU*** Japan 2016 vs 2015 2017 vs 2016 2016 vs 2015 2017 vs 2016 Source: Customs Departments of 3 countries. EU***: EU data is only updated to Nov. 2017
GROWTH PROSPECTS OF TEXTILE AND APPAREL INDUSTRY VN is gradually taking market shares in major textile import markets. Shares of VN textile export volume 2015-2017 in US, EU, JPN 9.2% 8.6% 8.0% 7.1% 7.0% 6.9% 2.1% 2.0% 2.0% US EU*** Japan 2015 2016 2017 Shares of VN textile export value 2015-2017 in US, EU, JPN 11.5% 11.2% 10.6% 10.8% 10.1% 9.6% 3.2% 3.0% 2.9% US EU*** Japan 2015 2016 2017 Source: Customs Departments of 3 countries. EU***: EU data is only updated to Nov. 2017
THE POTENTIAL GROWTH OF POLYESTER FILAMENT IS HUGE Polyester filament excels natural fibers in both growth rate and share in total consumption Million tons Global Fiber Consumption 120 101 100 93 90 100 86 36% 81 38% 43% 72 45% 41% 80 44% 41% 44% 44% 45% 46% 46% 60 46 42 39 36 33 29 40 62% 57% 64% 24 24 24 24 23 23 23 23 55% 59% 59% 19 56% 18 18 17 17 55% 16 56% 56% 15 54% 54% 20 0 2008 2010 2012 2013 2014 2015 2016 Total Cotton PES FY PES SF Source: The Fiber Year Consulting 2016 Note: PES FY is polyester filament. PES SF is polyester staple During the period 2008 – 2016, the world consumption of polyester filament has experienced a CAGR of 7.3% , vis-à-vis cotton at a slow CAGR of 0.2% and polyester staple at 2.4%. Share of polyester filament in total consumption rose from 33% (2008) to 45% (2016). Popularity of polyester yarns is driven by its diversified application for textile (e.g. footwear and apparel, home furnishing, etc.) and industrial purposes (e.g. tire reinforcement, safety belts, etc.). 5
YARN PRICE WAS IMPROVED SIGNIFICANTLY Following uptrend in oil price, yarn price is gradually recovering and becoming stable Oil price from 2016 to 03/2018 80 64.94 64.73 70 57.4 52.81 51.67 60 50.6 50.17 49.44 48.33 48.24 48.32 45.92 41.6 50 38.34 33.62 40 30 20 10 0 Raw material price from 2016 to 03/2018 Source: ccf.com.cn 1,800 USD/ tấn 1,500 1,200 PTA MEG 900 PET Chip 600 DTY FDY 300 -
YARN PRICE WAS IMPROVED SIGNIFICANTLY Vietnam’s Polyester filament sector increased by about 13% gaining high growth rate in major markets. VN’s fiber export value growth rate VN’s fiber export value share in Thailand, Korea, Japan in Thailand, Korea, Japan 32.7% 28.5% -1.7% Thailand 12.9% 16.5% 11.2% Japan 50.1% 9.0% 4.4% 3.2% 41.9% Korea 206.7% 2016 2017 Whole market VN exports Thailand Korea Japan
YARN PRICE WAS IMPROVED SIGNIFICANTLY Vietnam’s Polyester filament sector increased by about 13% gaining high growth rate in major markets. Yarn export volume’s growth rate among companies in Thai, Korea, Japan Thailand Korea Japan 737% 191% 172% 64% 63% 53% 43% 27% 24% 13% Đ.T.Hưng STK Hualon Formosa Yarn export value’s growth rate among companies in Thai, Korea, Japan Thailand Korea Japan 850% 203% 201% 95% 74% 79% 53% 33% 31% 22% 14% Đ.T.Hưng STK Hualon Formosa
TEXTILE COMPANIES ARE SHIFTING PRODUCTION FROM CHINA TO VIETNAM Many global brands have been relocating garment orders from China to VN Major brandnames want to take advantage of preferential tariffs from China is losing its competitive FTAs. advantage of production costs VN is receiving the preferential (labor, environment). tariffs treatment under several FTAs (EVFTA, VKFTA, VJEPA). Trend of relocating garment orders from China to VN Cambodia garment export is growing strongly due to the VN textile-dyeing sector’s capacity preferential tariff treatments from has been expanding significantly US, EU the demand on fabrics due to those projects which aim to imported from VN is rising strongly. catch TPP’s opportunities early. 9
TAKING ADVANTAGE OF FTAs Garment orders tend to be relocated to VN to take advantage of FTAs Countries signed/will sign FTAs with Signing status VIETNAM CHINA Vietnam Yarn 0% 5% Japan (ROO*: Fabric Effective from forward) 12/2008 Clothing 0% 8.4%-10.9% Yarn 0% 8% Korea (ROO: Cut & Effective from Sew) 20/12/2015 Clothing 0% 13% Signed on Yarn 0% 4% EU (ROO: Fabric 2/12/2015, forward) waiting for Clothing EIF, B3, B5, B7 6.3%-12% ratification. Yarn ChAFTA 0% from 2015 AANZFTA (ROO: Cut Effective from 0% from 2018 & Knit) 01/01/2010 Clothing NZ-China FTA: 0% Yarn MX (B5) MX(5%) Signed on AUS(EIF, AU4-A, CPTPP (ROO: Yarn 08/03/2018, AU3-B), CAN AUS(10%), CAN (18%), forward) waiting for Clothing (EIF,B4), MX MX(30%), NZ (10%) ratification. (B10,B16), NZ(EIF,B7) • ROO: Rule of Origin • B10: eliminate in 10 stages • EIF: entry into force • B16: eliminate in 16 stages • B4: eliminate in 4 stages • B7: eliminate in 7 stages 10 • AU4-A: remove in 4 stages, 0% in the 4 th stage, • B5: eliminate in 5 stages • AU3-B: remove in 3 stages, 0% in the 3 rd stage
EVFTA Vietnam's growth opportunities in EU are huge Textile and apparel’s revenue and Shares in import value from EU import value into EU 171.1 169.4 180 160 140 110 109 120 100 80 60 Cambodia 40 Banglades , 3% 20 h, 13% 0 Vietnam, 2015 2016 3% Textile and apparel's revenue China Bangladesh Turkey Import value India Cambodia Vietnam Other Source: Euratex, Statista About garments: Vietnam’s market share may be increased several times by receiving the preferential tariffs treatment since EVFTA takes effect.
CPTPP Vietnam could double its market share to CPTPP countries by by receiving the preferential tariffs treatment since this agreement is ratified. Vietnam’s market share in local garment Import value share of TPP import 2016 members in 2016 6.00% 5% New Zealand 1.78 5.00% Peru 1.68 4.00% Chile 3.70 2.70% 3.00% 2% 2% Australia 8.66 2.00% 1% 1% Mexico 10.21 1.00% Canada 13.26 0.00% Australia NZ Canada Mexico Peru Chile - 5.00 10.00 15.00 Source: WITS
FDI PROJECTS IN TEXTILE AND APPAREL INDUSTRY Garment orders tends to be relocated to VN to take advantages of FTAs Capacity expansion of STK’s major Firms/Projects Business Sectors Investment value (USD customers (tons/month) mil.) Size of capacity 2015: 140; Worldon Premium Apparel products expansion 2017: +310 2015: 140; (tons/month) Gain Lucky Knitting 2017: +87 SAMIL +1,700 DE LICACY ECLAT Knitting, Polo T-shirts 2015: +50.5 190 HAPUTEX (Nam +1,200 57 Fabric 120 Phuong) PACIFIC Fabric 180 CRYSTAL Gain Lucky FAR EASTERN +600 Fiber-Fabric-Garments 760 56 NEW CENTURY SHEICO Sportswear 50 Bamboo DALUEN 45 20 PANCO (Korea) Textile -Garment 30 +370 +350 Fiber, Knitting fabric, DE LICACY 100 Finished Products Luthai Textile Fiber, Colored Fabric 170 Current production capacity Huntsman Textile Dyes, chemicals (million metres /year) Effects Avery Dennison Clothing tags for Uniqlo, the 30 RBIS North Face
VIETNAM IS BECOMING A MAJOR SUPPLIER OF FABRIC AND ACCESSORIES IN SOUTH EAST ASIA Growth rate of VN’s fabric export VN’s total fabric export value value in ASEAN 2015-2016 (USD mil.) 34.0% 34.0% 1,354 27.5% 1,000 18.7% 906 12.1% +25.6% , y-o-y 2015 2016 2017 Source: VN Textile and Apparel Association Source: https://data.aseanstats.org
EXPANDING CUSTOMER’S NETWORK & CONQUERING THE NEW MARKET “Century” brand is highly appreciated by customers thank to high product quality, excellent customer service & competitive prices Revenue by markets 2015-2017 62% 43% 33% 32% 26% 17% 16% 12% 12% 11% 12% 12% 7% 3% 2% 0% 0% 0% Japan Korea Thailand Turkey Vietnam Others 2015 2016 2017 Year Number of new %/sales revenue customers 2015 56 7% 2016 87 15% 2017 85 7.7%
Recommend
More recommend
