"This is good news for the garment industry. We met the officials of the ITG group, one of the five leading textile companies, in the US, and they have agreed to set up a textile factory under the joint-venture model," the chairman of the Vinatex'' management board Le Quoc An said on Thursday.

Other than the ITG factory, expected to come up in a northern province, Vinatex affiliates such as Viet Tien, Nha Be, Garm 10, and Phuong Dong have inked deals totalling $50 million, according to Vinatex.

Vietnamese garment products have been gaining a firm foothold in the US market thanks to the trust in importers and retailers in addition to satisfying US customers, An said.

To promote exports to America, the industry hopes to lure more US cotton and textile investors to Vietnam. America is the biggest cotton producer in the world with an annual output of 5 million tonnes, he said.

Industrial analysts from the Vietnam Textile and Apparel Association said the agreement played a significant role in further attracting FDI (foreign direct investment) to Vietnam as the country needs over $2.7 billion from now to 2010 to develop the industry.

ITG''s announcement, last Friday, will be followed shortly by discussions with Vinatex to explore a full range of mutual business interests.

Wilbur L. Ross, Chairman of the ITG, said, "We anticipate our discussions with Vinatex to be quite broad in scope and range from commercial and technical points of view, encompassing global sales and services to more specific issues such as managing selected manufacturing plants in Vietnam.

We will also consider opportunities to invest in new and existing Vinatex facilities." Vinatex has assets totalling VND12 trillion ($757 million), and along with its 57 affiliates churns out products to the tune of VND9.4 trillion ($599 million) annually, grossing an export value of over $1 billion.

The International Textile Group of Wilbur Ross & Co acquired Burlington Industries and Cone Mills in 2004, and has an annual sales of nearly $900 million. The company has five business units, namely Cone Denim, Burlington WorldWide, Interior Fabrics, Carlisle Finishing and Nano-Tex.