Vietnam’s textile and garment industry may have a trade surplus of US$15.5 billion on total export revenue of US$31 billion this year, said Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS).
At a press conference in HCMC on December 11, Giang said the sector has gained strong export growth this year, at 10.23 per cent, when compared to 2016, and the momentum is to continue into next year with export earnings forecast at US$33.5 to 34 billion. This segment has faced multiple challenges early this year, but the situation has changed for the better since the Q2 of this year, Giang noted.
Of the total export revenue of this year estimated at US$31 billion, textiles and garments contributed to an estimated US$25.91 billion, fabrics US$1.07 billion and cotton US$3.51 billion.
Local enterprises have tapped new markets including China, Russia and Cambodia while holding on to traditional markets such as the U.S., the EU, Japan and South Korea. It is noteworthy that local firms have managed to switch production, from processing exports for foreign firms to free on board (FOB)and original design manufacturing(ODM), Giang said. Discussing next year’s business, Giang exults that many textile and garment firms have signed big export contracts enough for production in the first haft of next year and buyers of these products have shown their confidence in product quality and delivery time of Vietnamese firms.
To achieve the target set for next year, VITAS advised textile and garment enterprises to change their production methods and meet requirements of import markets, enhance competitiveness, invest in new techniques and technologies, diversify products and build links among enterprises.
Giang said the price competition will be tough as many other countries have also sought to undercut Vietnam, especially apparel manufacturers from China, Bangladesh, Sri Lanka, Myanmar and Cambodia. Therefore, local enterprises must employ highly-skilled workers, invest in modern equipment and speed up automation.
According to VITAS, domestic firms have to import 86 per cent of fabrics for garment production as locally- produced fabrics have not met standards of major import markets, while locally-produced fabrics are subject to taxes while imported fabrics used for export processing are tax-free.
The textile and garment sector is also experiencing difficulties due to rising production and labour costs. Vietnam currently has nearly 6,000 textile and garment enterprises with 2.5 million employees.
