VINATEX - Finding Solutions to Substitute Imported Materials

VINATEX - Finding Solutions to Substitute Imported Materials

VIB Forum had an interview with Le Quoc An, chief executive of the Vietnam National Textile and Garment Corporation (VINATEX).

VINATEX is considered as an effective corporation, how has the corporation recorded such a great achievement?

Firstly, we have concentrated on improving the strength within our network. If any member enterprise in VINATEX faces difficulties, it will receive support from the corporation and other enterprises. Secondly, we have strengthened our apparatus from the corporation to each enterprise, focusing on training skilled cadres and workers. Thirdly, resources have been concentrated in renewing equipment and technology, thus increasing our production capacity and improving the quality of products. Fourthly, we have paid careful attention to finding more export markets by promoting marketing activities in foreign countries and setting up representative offices in Russia and Japan.

The biggest difficulty of the Vietnamese textile and garment industry is its dependence on imported materials. How will VINATEX address this problem?

We depend much on imported materials. This is a disadvantage for Vietnam in comparison with other countries in the region. Therefore, we have striven to find solutions to substitute imported materials. These include a promotion of the growing of cotton (but this still depends on climatic conditions or investments in irrigation facilities in cotton growing areas), investment in modern technology and equipment, and other economic stimuli to combine textile and garment makers with domestic material supplies.

What do you think about the idea that most textile and garment enterprises have concentrated on export markets only, abandoning the domestic market?

In our opinion this idea is not correct as revenues from the domestic market accounted for 61 per cent of a total of VND 14,900 billion earned by VINATEX in 2004. Domestic consumption of textile enterprises accounted for 67 per cent while that of garment enterprises was put at 34 per cent. Other enterprises had domestic consumption accounting for over 90 per cent. In fact, revenues from the domestic consumption of garment enterprises are still low. This is because these enterprises have invested in modern technology and equipment to make high-end garments for export and partly for the domestic market. However, with a population of over 80 million people, whose incomes have seen a high annual increase, the domestic market has become an advantage for the domestic textile and garment industry. So far, VINATEX enterprises have expanded their domestic sale channels with over 900 shops and agents nationwide. However, our biggest difficulty is that we have to compete fiercely with smuggled and pirated products at prices that are very cheap, which are now flooding the domestic market.

After a successful year, how will VINATEX overcome new challenges and difficulties in 2005?

The challenges and difficulties for the coming period are massive. To overcome them, each enterprise and the corporation will have to exert further efforts to increase our competitiveness. We also need support from the State and the whole of society to record greater successes.

• Reported by Hien-Ha