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Garment companies don’t have orders, lack workers
Garment companies can foresee that they would have a tough year in 2012. Many of them are still awaiting orders from foreign importers and scrambling with others for workers.
According to the Vietnam Textile and Apparel Association (Vinatas), only 70 percent of enterprises have got enough orders for the first quarter of the year, a few have had orders for the second and third quarters. Meanwhile, the others have to “live from hand to mouth,” moving heaven and earth to seek orders for the coming months.
Viet Tien, a big garment producer and exporter, has got orders for the first quarter only, even though it has advantages of a big producer and good relations with importers.
“The company is still trying to look for more orders for the second quarter,” said Pham Van Kiet, Deputy General Director of Viet Tien Garment Company. The company’s current situation is really different from the previous years. By that time in 2011, Viet Tien had got enough orders for the whole year.
Harder jobs, unchanged prices
Kiet complained that while the number of orders decrease, foreign importers have become choosier when requiring more complicated designs, but they do not accept the price increases.
He went on to say that it is very difficult to find big orders with hundreds of thousands of products or millions of products. Most of the orders are just small with tens of thousands of products.
This will influence the production, because garment companies would have to spend more time and prepare more for materials and other stages of the production chain. As the output is small, it is impossible to increase the productivity, though Vietnamese companies have been equipped with modern machines.
In January 2012, a garment company in Binh Duong province revealed that it had to clench its teeth and accepted an order from a loyal client, who haggled hard and long. The representative of the company said that the company accepted to keep the price unchanged, despite the production cost increases. However, the client still tried to slash the price by several cents. Finally, the company had to accept the order with the price down from 12 dollars to 11.2 dollars per product.
However, even the enterprises which have got orders for the first quarter, still feel worried that if clients cancel the orders, they would not have jobs to do and have to leave the production lines idle.
The garment companies have every reason to worry about that, since many clients have changed the orders in the last minute since the second quarter of 2011.
Scrambling for workers
Pham Xuan Hong, Deputy Chair of Vitas, said that the labor shortage, which last from the beginning of the year to mid February, has been eased. However, companies now face an unhealthy competition in attracting workers.
Some companies try to lure workers by offering high salaries. However, after that they try to dock wages of workers. The fines of 200,000-300,000 dong will be imposed, if workers have one day off. Besides, workers will be forced to pay fines if they make mistakes or cannot make enough products.
Though garment companies are trying to lure workers by offering high wages, Hong believes that this is just a temporary solution for now.
“In the long term, it is really risky to pay the wage of six million dong a month. The average pay affordable by garment companies is 4-4.5 million dong,” Hong said.
According to Vitas, only 10 percent of big enterprises in Vietnam can pay 6 million dong a month on average. However, this includes the 13th month salary, Tet bonuses and allowances.
In January 2012, Vietnam exported one billion dollars worth of garment products, a decrease of 12 percent over the same period of the last year.
Vietnamnet, SGTT
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