The Vietnam National Textile and Garment Group (Vinatex) is one of the largest and the most competitive textile garment corporations in Asia. Vinatex recently sets target for the second half of 2009 to raise production and export value by 5-10 per cent to US$1.72 billion, contributing to the nation's total textile export of US$9.2-9.5 billion, and ensuring jobs and income for laborers.
Difficulties in first half of 2009
Vietnam earned US$4 billion from apparel exports in the first half of 2009, 1.3 per cent down on the same period last year. Vinatex leaders said there had been a fall in demand from major markets including the US and EU where the apparel retail turnover was reported to have fallen by up to 20 per cent.
As predicted that the demand for garments would drop by 20 per cent in the first half of this year, and suffer a further 15 per cent decline in the next five months due to the impact of the global economic slowdown, particularly in major markets as the US, the European Union and Japan.
Vietnam apparel producers said export contract numbers fell by up to 25 per cent and prices were down 10-15 per cent, causing producers, especially small- and medium-sized ones, to cut jobs.
The domestic textile industry did have numerous export contracts with overseas partners. A large number of Vietnam’s clothing materials were exported to China, one of its largest markets. The country’s textile and apparel sector is one of Vietnam’s key exporters, with a growth rate of 20 percent per year, and accounts for about 15 percent of the whole country’s total export turnover.
However, the actual value is very low, as Vietnam is used for outsourcing for overseas production. Vinatex said the country is missing out on value-added, where larger revenue can be made, because it lacks professional designers. All countries have to import materials, including China, as needs vary around the world. One solution is to specialize in specific materials and products in order to increase demand.
Brilliant future
However, the future seems positive, producers had indicated the number of export contracts, especially jacket shipments to US and EU, was on an upward trend.
To cope with the challenges affecting the export markets and to ensure the stable employment of up to 2 million workers, Vinatex is taking a host of urgent measures to boost both domestic sales and exports, as well as formulating new policies regarding finances, social security, staff training and technology. It builds retail network domestically, preserves existing U.S. and EU markets, and expands market in Asia, Africa, South America and the Middle East.
Vietnam needs about 200,000 tonnes of cotton for its textile and garment production each year; however, the domestic cotton industry meets less than 2 per cent of the demand. Currently, Vietnam’s textile companies are investing in new machinery and improving production technology, as well as improving quality.
The Corporation will complete its work on some units and building of material centers in Hanoi and Ho Chi Minh City. It is also orienting multi field investment, enhancing capital management as well as making use of the government stimulus package to accelerate investment activities.
Vinatex will provide local cotton growers with seeds, tools, technical support and commit to purchase the products with a priority price. The corporation have a project that invest VND3.5 trillion (US$207.1 million) for central Highlands provinces of Dak Nong, Dak Lak and Gia Lai to develop the cotton cultivation area.
Vinatex has targeted to raise the productivity of the cotton sector to 40,000 tonnes of raw cotton by 2015 and 60,000 tonnes by 2020 in order to ensure security of materials for the textile and garment sector and meet 10 per cent-15 per cent of the country’s demand in the future.
Huong Ly
Vietnamese
