Due to rising labour costs in China, Japanese trading house Itochu has increased its stakes in Vietnam National Textile and Garment Group (Vinatex) to nearly 15 per cent by investing $46.9 mn with an aim to turn the country into a textile export hub for Europe. Itochu is now the second-largest stakeholder in Vinatex after the Vietnamese Government.

The company had acquired a nearly 5 per cent stake in 2015. It is rare for a foreign company to own more than 10 per cent of a State enterprise in Vietnam, according to a report. Vinatex, which operates about 200 sewing factories in the country, invested nearly $200 mn over the past three years to add facilities for thread and cloth production.

Itochu collaborates with Vinatex on suits, shirts and functional undergarments for cold weather among other products. It plans to boost production of high-performance apparel in Vietnam and export the output to Japan, Europe and the United States. Itochu exports a little over 60 bn yen worth of apparel from Vietnam a year, with half of that produced by Vinatex.