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January 23, 2019

IFC Vietnam programme helps factories to clean up

By Hannah Abdulla

The International Finance Corporation(IFC) has revealed some of the energy and water consumption savings that have been made so far under the Vietnam Improvement Program (VIP) launched in the country’s apparel, textile, and footwear sector in 2016.

The VIP was rolled out to improve resource efficiency in local firms, and has now been implemented in 70 factories that supply brands including VF Corp, Target Corp, Puma, New Balance and Adidas – enabling savings of US$24m in water, energy, and chemical operating costs. When the programme’s recommendations are fully implemented over the next three years, the US$40m capital investment required for retrofits and more efficient equipment could collectively save 4m cubic metres of water and curb 788,500 tons of greenhouse gas emissions annually.

At one of the suppliers, Phong Phu International (PPJ), which has 20 factories and 14,000 workers supplying denim, knit and woven apparel, the measures implemented helped it slash its energy consumption by almost 7m kilowatt hours per year, and use 200,000 cubic metres less water annually. This allows it to save as much as US$700,000 a year.

As part of the initiative, PPJ replaced its low-efficiency boiler with a high-efficiency one. It also achieved significant water efficiency by recycling 80% of wastewater. For higher resource efficiency and better productivity, PPJ replaced the manual jeans finishing process with laser machines, and switched from traditional washing machines to modern ozone machines.

“Improved efficiency and increased output have helped us attract new buyers who are in search of suppliers with global standards,” says PPJ’s vice general director Nguyen Thi Lien. 

The company has rolled out similar upgrades in all its factories throughout 2018. As productivity grows by at least 30%, PPJ is expecting a turnover of $300m for fiscal 2018 – a 30% increase compared to 2017. Operating costs have also fallen by 20%. 

According to the IFC, chemical discharge makes the textile and garment sector sector the second-biggest water polluting source in Vietnam. Vietnam’s textile and garment factories are also among the world’s most energy-intensive ones, using up one-tenth of the total energy consumed by all industries in the country. 

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