Uniqlo's parent company: Factories in Vietnam are not as good as those in China

Speaking to Nikkei, Fast Retailing CEO Tadashi Yanai said the company would not follow the trend of shifting its operations away from China.

Fast Retailing CEO Tadashi Yanai - Photo: REUTERS

Tadashi Yanai, CEO of Fast Retailing (the parent company of Uniqlo), said that manufacturing in China remains important to the fashion company, despite the trend of many other multinational businesses shifting away from the country.

In an interview with Nikkei Asia , Mr. Yanai affirmed that Fast Retailing has always developed alongside the Chinese textile industry. Therefore, the importance of Beijing, or the management of Chinese factories, remains "unchanged."

"Tens of thousands of young workers are employed in a factory in this country, unlike factories in Japan which typically have only around 100 workers," Yanai said.

Meanwhile, Nikkei reports that many global businesses, including major US technology companies, are pursuing a "China plus one" strategy to diversify their investments into countries other than China, with India and Vietnam showing particular potential.

These businesses are considering factors for relocation such as China's slowing economy , the US-China trade conflict, and other environmental concerns.

However, Mr. Yanai made it clear that Fast Retailing says "no" to the "China plus one" strategy, even though US President-elect Donald Trump may soon impose tariffs of up to 60% on imported goods from Beijing.

"There's no easy way to build large-scale factories to replace the facilities in China, where we have years of experience. The factories in Vietnam can't be as good as the factories in China, unless a large number of Japanese personnel are sent there," the CEO of Fast Retailing explained.

Mr. Yanai believes that manufacturers in China are the parties capable of achieving the criteria of mass production and high quality.

As of September 2, 2024, among Fast Retailing's 397 garment factories as partners, 211 are located in China, 61 in Vietnam, and 26 in Bangladesh.

Fast Retailing also collaborates with 155 fabric manufacturing facilities worldwide , including 75 factories in China.

Over the years, Fast Retailing has sent teams of experts, known as Takumi, to partner factories in China, Vietnam, and other countries to provide technical guidance such as dyeing and sewing techniques to workers.

Mr. Yanai did not specify the name of the country where some of Fast Retailing's factories were performing "not as well" as their Chinese manufacturing partners.

He said that while these factories don't guarantee high-quality output, they still supply several other fashion retailers with products sold in the European and American markets.

"Japan has one of the world's leading popular cultures, and its people are very particular about the quality of clothing regardless of the price," Yanai emphasized.

Source: https://tuoitre.vn/cong-ty-me-cua-uniqlo-nha-may-tai-viet-nam-chua-tot-bang-o-trung-quoc-20241126181652219.htm