Textile and apparel sector encounters difficulties during remainder of the year

According to statistics released by the Ministry of Industry and Trade, the textile and apparel sector grossed US$27.4 billion in export turnover in the first ten months of the year, making garment and textile products to rank among the country’s top five export items.

During the reviewed period, the United States remained as Vietnam’s largest export market with a turnover of US$49.9 billion, an increase of 26.6 per cent against the same period last year.

This was followed by the ASEAN bloc with US$21.3 billion, Japan with US$16.6 billion, and the Republic of Korea with US$16.6 billion.

Despite these positives, the nation’s textile industry faced a number of challenges, largely as a result of stiff competition for orders between domestic firms and foreign direct investment (FDI) businesses and among countries such as Thailand, India, and Indonesia.

In addition, a number of businesses experienced a shortage of orders, with some even facing bankruptcy.

This difficult situation is attributable to a split in orders into smaller bulks, coupled with an indifference among customers for long-term orders. Furthermore, there has been a trend of orders from China shifting to countries that offer tax incentives, such as Bangladesh and Cambodia, as opposed to Vietnam.

Moreover, the country no longer enjoys significant advantages in cheap labour as the labour costs of other nations are half that of Vietnam's textile and apparel industry.

In order to attract additional orders, several countries have started to apply a range of incentives to support businesses by reducing taxes and promoting exports, which has served to increase the risk of losing orders for Vietnamese enterprises.

Truong Van Cam, Vice Chairman and General Secretary of Vietnam Textile and Apparel Association, said that within the context of fierce global competition, the textile and garment sector has put in significant efforts to achieve a growth rate of approximately 9 per cent.

According to experts, in a bid to achieve the export target of US$40 billion between now and the end of the year, businesses must be proactive when seeking partners, expand into new export markets, change production methods in accordance with the latest trends, and meet the increasing needs of consumers.

Local businesses are also being advised to fully focus on receiving orders that require the use of high technology, make the most of the nation’s skilled workforce, and meet requirements among customers for fast and accurate delivery times with a consistent product quality.