Textile industry lacks orders, how to turn challenges to opportunities?

	New-generation FTAs offer impetus to textile supply chain restructuring
	Lacking orders, textile and garment exports drop
	Textile and footwear firms: Difficult to access support policies

Nguyen Xuan Duong, Chairman of Hung Yen Textile and Garment Association, Chairman of the Board of Directors of Hung Yen Garment Corporation, Vice Chairman of Vietnam Textile and Apparel Association (Vitas)

Many have said orders of textile enterprises are declining, how does this affect businesses?

- Currently, the two main markets, Europe and America, showit is possible to reduce by about 50 percent of orders, not to mention the remaining quantity of orders that must be divided among other export markets such as India, Bangladesh andChina. In the past, from July to August, these markets would sign contracts to produce products for spring. But now, due to the Covid-19 pandemic, the contractshavenot been signed yet. Thus, according to statistics, only large enterprises have fourth quarter production capacity of 10 percent, the rest have almost no orders. This is an alarming problem for the whole textile industry. Many enterprises have reduced employees due to lacking orders.

Are there any opportunities for Vietnamese enterprises to overcome difficulties?

- The first opportunity is that Vietnam has succeeded in preventing and controlling the Covid-19pandemic, which will have a great impact on the choices of customers and partners with safety factors. If the Government decides to reopen commercial flights soon, some customers will definitely prioritise Vietnam first.

The remaining opportunities depend on the capacity of textile enterprises. At the moment, the quantity of demand is low and still has to be divided into many markets, but if Vietnamese enterprises do well in terms of time, quality, and reasonable prices, they can gain more orders. In particular, businesses need to change the method of signing contracts. Instead of using intermediaries, enterprises should directly sign contracts with partners based on digital and information technology platforms to connectfaster with partners. This helps businesses not only save time andimprove reputation but also helps increase the value of orders.

Currently, the orientation of the Textile Association is how to turn challenges into opportunities. The association will spend time and money on training workers during the time without jobs. The Ministry of Labour, War Invalids and Social Affairs proposed to the Government to raise the level of training for workers from VND1 million to VND3 million per month. This is a good opportunity for enterprises to train and improve skills for their employees, thereby increasing productivity, quality, and customers will prioritise ordering.

What should the regulatory agency do to support policies?

- With the current difficulties, every business needs more financial resources, but credit support packages still offer too high criteria and high interest rates, so many businesses have not been able to take advantage. Therefore, regulatory agencies and the banking sector should devisemore solutions to reduce lending interest rates, ease loan conditions, and increase labour training costs for businesses.

Moreover, social insurance and union fees account for 30 percent of the salary fund, if these costs are reduced, businesses will grow. Without timely support from management agencies, 50 percent of enterprises could go bankrupt, thenif enterprises were forced to lay off workers, the Government would have to take care of unemployment benefits and support training. In addition, ministries and agencies should not discuss the regional minimum wage in 2021 at this time because businesses are in a very difficult situation, maintaining the current minimum wage is too much already!