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Textile exports may take hit from power shortage
Vinatex, Vietnam’s leading textile firm, said most of its subsidiaries have received export orders for the whole of this year but they may struggle to execute them due to the expected power cuts in the dry season.
In recent times many textile firms have moved their plants to the rural areas in central Vietnam to take advantage of cheap labor. With a power shortage looming, rural areas are expected to be worse-hit than cities.
The textile industry also faces challenges in expanding production due to difficulty in getting loans from banks.
The recent devaluation of the dong has put it under pressure by increasing raw material costs, which are already high. The price of cotton, for instance, has skyrocketed to a record high of US$5.2 per kilogram, 300 percent up year on year.
The Vietnamese government has asked authorities in the central region to focus on supplying sufficient power to textile plants this year.
In the first two months textile exports were worth $2.1 billion, 54 percent up from the same period last year.
tuoitrenews, TBKTSG
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