VCN - In 2017, despite many negative impacts from the market, the textile and garment export activity still achieved positive results with the prediction of reaching the target of US$31 billion. In 2018, the textile and garment industry is expected to attain even better positive results
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Production of textile and garment at Saigon 3 Garment Joint Stock Company. Photo: Nguyen Hue
According to the Vietnam Textile and Apparel Association, the textile and garment industry entered the market in 2017 with many negative impacts from the main export markets, such as the failure to sign the TPP agreement with the US and the post-Brexit of the UK .
However, in the second half of 2017, companies in the industry had quickly improved their production system. They focused on a number of strengths and responded to the market demand, so that the exports of the industry were significantly improved. The export results in the past 10 months showed that the growth rate of the industry remained relatively stable with a turnover of nearly US$23 billion, an increase of about 10% over the same period last year. The three major import markets of Vietnam’s textile and garments, are the US, Europe and Japan, and they still maintained a stable growth.
Specifically, despite the failure of theTPP agreement, the textile and garment export turnover to the US market still reached US$10.2 billion, up by 7.8%. The EU market reached US$3.06 billion, up 5.7%; and Japan reached US$2.52 billion, up 6%. The South Korean market also had strong growth and ranked fourth with a turnover of over US$2.3 billion, up over 12% during the same period. The export to other markets such as India, China, Russia and Greece also gained a positive growth rate.
Over past time, although export orders of textile and garment tended to move to the neighbouring markets with more competitive production costs, according to Mr. Nguyen Xuan Hong, Vice chairman of the Vietnam Textile and Apparel Association,he asserted that this was not a matter of concern because Vietnamese textile and garment companies were absolutely eligible for competition and not afraid of losing the orders to other markets.
The skills of the workers in the industry are being improved, productivity is improved, and the quality is getting better and the reputation of Vietnamese companies and their partners is good. The high-value orders are still offered to Viet Nam, with only some low-value orders being transferred to countries such as Myanmar and Cambodia.
The good news is that nowadays companies are gradually investing in new technology and automatic equipment to increase productivity.Thus, using the profits to reinvest in new technology, they are catching up with the world’s rapid development trend and further enhancing the competitiveness of Vietnam's textile and garment industry in the world market.
Pham Xuan Hong predicted that 2018 would be the year of many prospects for the textile and garment industry because the strategy was carried out in the correct way. In 2017, although there were not many advantages, the growth of the industry was still at a good rate.
Currently, companies are hurrying to complete the signed orders with their partners as well as the strategy plan. Besides, many companies had received certain orders for the first quarter of 2018. Thereby, the growth rate of the textile and garment industry in 2018 was forecasted to be better than 2017 with double digits.
However, the leaders of the Vietnam Textile and Apparel Association also said that textile and garment companies would face many challenges in the coming year. The biggest challenge was the increasing competitive pressure from regional countries such as China, Myanmar and Cambodia. Because in fact, these countries not only had breakthroughs in export market share, but also policies on social insurance, and low cost land and tax.
Meanwhile, in Vietnam these costs were higher than other countries. Therefore, though the turnover and revenue of the textile and garment industry still rose, the profit was not high. In addition, the export of the textile industry was not really convenient, because the fashion trend of import markets was always changing.The requirement for delivery times was shortened from 30-45 day arrangements to 15 days, putting great pressure on manufacturers.
To overcome these barriers and compete better, the Vietnam Textile and Apparel Association is proposing that companies fully exploit and promote the skilled workers, as well as renovate management methods in order to achieve the best efficiency for production and to enhance labour productivity. In addition to maintaining and developing exports to the major markets such as the United States, the EU, Japan and South Korea, the expansion to other markets such as ASEAN, Eurasian economic union, India, and Latin American countries is a requirement.This also includes a requirement for connecting with the distributing system in the local market.
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In addition, representatives of the Vietnam Textile and Apparel Association said that there should be appropriate policies to attract foreign investment in manufacturing yarn, weaving, and dyeing.There should also be a study to attract more resources to develop smart textile factories, in order to support the textile and garment industry for a sustainable development.
By Nguyen Hue/ Huyen Trang