Vietnam Garment & Textile Industry Has Active Position in Global Supply Chain

5:48:08 PM | 1/22/2014

On the occasion of the Lunar New Year 2014, Vietnam Business Forum interviewed Mr Le Tien Truong, Vice Chairman of the Vietnam National Apparel and Textile Association (Vitas) and Deputy General Director of Vietnam National Textile and Garment Group (Vinatex), on the successes of the garment - textile industry in 2013 and challenges against it in the new year. Huong Ly reports.
Could you please tell us the operational status of the garment - textile industry in 2013?
2013 was a very difficult year for exporters of garments and textiles. Shipments to some key importers of Vietnamese garments and textiles only marginally increased. Specifically, imports by the US rose 3.6 percent over 2012, by the EU up 0.52 percent, and by Japan down 0.54 percent. Surprisingly, while the world's purchasing power decreased, Vietnam’s garment and textile exports climbed to US$19.8 billion in 2013, up 16.9 percent against 2012 and accounting for 15 percent of the country’s total exports. This did not account the export of raw materials worth nearly US$600 million. In total, Vietnam earned US$20.4 billion from garment and textile exports in 2013, up over 18 percent over 2012 with US$17.2 billion.
Vietnam’s textile and garment export turnover leaped from 8.8 - to 20.5 percent in Japan and the United States. Notably, the country’s shipments to South Korea soared 43 percent. Vietnam's apparel industry is located on a higher order of priority of global garment - textile supply chain. Therefore, when the market tends to narrow, weaker countries or those at the bottom of the list are vulnerable to order cut. Vietnam has risen to a position in the top priority groups; therefore, it managed to maintain growth in this context.
Does the garment - textile industry take advantage of priorities in the global supply chain to find new customers and expand markets?
In the current difficult context, the strategy that that garment - textile sector applies is to maintain good markets, especially utilising competitive advantages in niche markets and focusing to increase the market share in new markets, not chasing after quantity. The garment and textile sector is connected marketing with investing activities to meet origin requirements specified in TPP Agreement and other FTAs. Major Vinatex units have strengthened their domestic business practices powered by the core Vinatex Mart distribution channel, while improving fashion products to meet consumer needs.
The garment - textile industry has introduced investment solutions for intensive production. How do you assess this issue?
In 2013, Vinatex Group deployed 42 projects valued at VND6,360 billion, including 12 fibre projects, nine textile projects, 17 garment projects and four other projects (one infrastructure project, one super market project, one training school project, and one cotton programme). Specially, in August 2013, the Group started construction on Phu Hung fibre plant in Hue City with an annual output of 21,000 spindles. This project will bring the spindle output of the group to 25,000 spindles by 2017, as set by the group.
Garment - textile industry is relatively successful because it is really competitive. They do business in the real market, not a virtual market. With the new production structure, the garment - textile industry is shifting from quantity to productivity and increasing the ratio of locally sourced content of products that require high technical and quality requirements. Notably, Vinatex has increased the ratio of locally sourced up to 60 percent. This achievement is attributed to the investment strategy preparation of materials investment, and the building of supply chain links (dyed yarn-textile-garment) among its members.
Some garment and textile enterprises have developed roadmaps and plans for FOB and ODM production and prepared for Vietnam’s TPP participation by gradual technological innovation and modernisation and improvement of management efficiency, particularly in weaving, dyeing, finalisation and designing stages.In order to prepare for TPP and other FTAs​​, Vinatex has implemented the policy determined by the method ODM production in all the members to make Vinatex a solution package provider for buyers, the rate of ODM production from 10 percent in 2013 to 12-14 percent in 2014.
What are the objectives of the garment - textile industry in 2014?
The economy in 2014 remains challenging. Garment and textile enterprises have meticulous plans and appropriate solutions. This year, the garment - textile industry strives to attain export growth of 12 percent, net output growth of 10 percent, and revenue growth of 12 percent.