Page 502 - Ebook HTKH 2024

Therefore, TNG Company plans to increase factory capacity by 45 more garment
lines, corresponding to a 15% increase in garment output compared to the same period;

recruit 3,000 more workers, 20% higher than the same period, with average labor costs
increasing by 7% due to the increase in minimum wages according to regulations of the
National Assembly and the Government.
Also within the ESG strategy, TNG Group also plans to move the two factories
Viet Duc and Viet Thai into Son Cam Industrial Park, better meeting the requirements
of the regenerative economy and circular economy, in order to increase connectivity
with supporting factories. The two current factory areas will be utilized as factories and
warehouses for rent, waiting to convert the land use purpose from industrial to

residential land.
Another factor supporting TNG's positive export order prospects is that the US
market's clothing inventory is anchored at a low level, while the clothing retail market
has maintained a recovery trend since the end of 2023. US clothing retail market sales
have increased again by 5% in the last month of 2023 and have increased steadily since
then.

Accordingly, with the strong shift to ESG practices, TNG Group is expected to
achieve revenue of over VND 8,000 billion by the end of fiscal year 2024, a growth of
14% compared to 2023, but after-tax profit increased by more than 45%, expected to
reach VND 328 billion, both of which are record highs in the company's business
development process in recent times. The company also expects after-tax profit by the
end of 2025 to increase by over 20% thanks to pursuing the ESG strategy.
6. Some challenges in ESG development in the textile and garment industry

First, the top challenge in ESG with a focus on green economic development for
textile and garment enterprises is financial resources for investment. Apart from FDI
enterprises, Vinatex, TNG, investment capital for this field of other textile and garment
enterprises is almost non-existent. Most textile and garment enterprises in the provinces
and cities are small and medium-sized enterprises, many of which are micro-sized, with
small equity and business capital. In reality, the Government, as well as the provinces

and cities, have not had any policies to encourage enterprises in general, and textile and
garment enterprises in particular, to move towards ESG and develop a green economy.
The awareness of all levels, sectors, enterprises in general, and textile and garment
enterprises in localities in particular about ESG and circular economy is still limited.
Currently, the Government has only had preferential interest rates on loans from
commercial banks for 5 encouraged sectors, but circular economic development of
textile and garment enterprises is not included in this category. Localities also do not
have policies on land lease, fee policies, or investment support policies under the

authority of provinces and cities for circular economic development of textile and
garment enterprises in the area.
The Ministry of Finance has not submitted to the Government or the National
Assembly any policies on tax incentives for textile and garment enterprises to invest in

494