Textiles exports manage to achieve $US 30 billion in 2017

Textile enterprises have their own measures to overcome remaining difficulties of 2016. Picture: H. Dịu

Is 2017 “brighter”?

The statistics of Vietnam Textile and Apparel Association show that in 2016, the total export turnover of the textile industry reached $US 28.5 billion, rose by 5.2% compared to 2015, but still lower than the target of $US 30 billion set in the early year, completed 92% of the export plan. Despite of low growth rate, Vietnam still had the highest growth rate compared to our biggest rivals such as China, India, Bangladesh, Indonesia.

Despite seeing difficulties in 2017, the textile industry still sets the growth rate of 6.5-7%, export turnover of over $US 30 billion. Thus, in order to reach these targets, Vietnam’s textile entereprises must manage to innovate and find methods to cope with difficulties.

About the difficulties of enterprises, Mr. Than Duc Viet, Deputy Director of Garment 10 Jtc. (Garco 10) said, the textile industry had many advantages to develop with positive sign of growth rates in 2014 and 2015 but in 2016, it faced many difficulties. Therefore, profits of Garco 10 reached 2,916 billion vnd, did not completed the targets of 3.000 billion vnd, but still rose by 7% compared to 2015.

According to Mr. Viet, the cause of these difficulties was the declines from the 2 major import markets - the US and the EU - of Vietnam’s textiles, emerging markets such as South Korea and Taiwan (China) have not gained good results. Moreover, Vietnam has been under pressure to compete with the cheap labor of its neighbors, not mention to some countries such as Cambodia, Myanmar, Bangladesh enjoy tax preferences as exporting into the EU markets. However, the representative of Garco 10 is still optimistic that in the context of the market drops 10-20%, prices fall 10-15%, and raw material prices and labor costs tend to rise, such achievements in 2016 of Garco 10 are encouraging. This will create better premises for the textile enterprises to rise in 2017.

In this regard, Mr. Le Tien Truong, General Director of Vietnam National Textile Garment Group said, the market situation in 2017 is the same as 2016 or has a little brighter sign as the US economy tends to grow better, comsumption levels hope to improve. As Mr Truong said, the upcoming difficulties of the textile industry are yet to receive the necessary support from tax policies due to the EU-Vietnam Free Trade Agreement, the Trans-Pacific Partnership still not come into force. In addition, the competitive situation will be increasingly fierce as rival countries will continue to attract orders thanks to the support of tax policies and exchange rates.

Manage to improve

Aware of the dificulties in the coming time, Vietnam’s textile enterprises have shown their determination to go ahead, willing to innovate to gain the best results.

With the export target of $US 30 billion of the entire textile industry and the revenue target of 3.100 billion vnd of Garco 10, according to Mr. Than Duc Viet said, Garco 10 will strive to reduce production costs to improve its competitiveness with other countries. Garco 10 has proposed specific measures such as undertaking radical cost reduction in production, investing in technologies, innovating in organization and improving skills of workers for raising productivity levels, compensating for the increasing minimum wage, raw materials and fuels. Besides, since the first days of the year, Garco 10 launched the competition for its all departments to sign in the commitment to implement its objectives.

Beside productivity improvement, Mr. Viet added, Garco 10 would improve its markets, including traditional markets such as the US, the EU and Japan… The company would continue to seek new markets, including focussing on the domestic retail market – it is expected to contribute greatly to Garco 10’s growth in the coming time, as the domestic segment is increasingly focused.

In general, textile enterprises of the country have made efforts and measures to overcome difficulties. But only efforts from enterprises are not enough, thus, Mr. Le Tien Truong has suggested the efforts both in enterprises and the State agencies. These agencies should have a strategy to further improve economic-social infrastructure, focussing on productivity, improving labor costs/unit of product, shortenning delivery time, strengthening logistics network…

We can see that, despite the difficulties in the coming time, enterprises are just “overflowing” with hope because, after 2107, several free trade agreements come into force, Vietnam’s enterprises will be entitled to benefits and have the same tax competition with other countries such as Cambodia, Bangladesh in some categories. Thus, this may impact on the export turnover, contributing to the general growth rate of the entire textile industry as well as of the economy, to remain the leading export industry in the country of textiles.