|
Gloomy news for clothing exporters
Vietnam’s garment firms urged to look to Russia and Japan as competition is expected to heat up in the US, where a recession has already slowed consumer spending.
Vietnamese textile and garment exporters need to prepare themselves for fiercer competition from Chinese exporters next year, industry officials have warned.
The nation’s number one export earning sector is already struggling, with the global economic crisis slowing demand, forcing local firms to reduce production and lay off workers.
Diep Thanh Kiet, deputy chairman of Ho Chi Minh City Association of Garments, Textiles, Embroidery and Knitting, said things could get even worst next year, with US safeguard quotas on Chinese apparel and textiles expiring on January 1, 2009.
With the quotas lifted, China will be free to export even more textiles and garments to the US, the Vietnam clothing and textile industry’s main export market, accounting for about 55 percent of export revenues.
Meanwhile, the US is yet to announce whether it will continue to monitor Vietnamese clothing imports next year. Under a program that expires on January 1, US authorities had the option of imposing limits on Vietnamese exports of trousers, shirts, underwear, swimwear and sweaters to the US.
Vietnam Textile and Apparel Association Chairman Le Quoc An last month predicted the US will extend the special supervision program by at least a year.
Local producers say they do not know whether to try to compete with Chinese producers by lowering prices or by switching to making high-end products.
Kiet said if Chinese products were no longer subject to US import quotas, Vietnamese exporters would find it hard to compete directly with their Chinese rivals in the middle and low price segments.
Vietnamese producers could switch to high-quality products, but these would be hard to sell to US consumers, who have cut back on spending since the US fell into recession, he added.
Another scenario could include both Vietnam and China as subject to the same supervision program, Kiet said.
In that case, local producers hope Vietnamese products would not be supervised as strictly as Chinese goods, he said.
New market
Both Chinese and Vietnamese exporters in the textile and garment sector have been hit hard by the worsening global economy.
China’s export-driven economy is feeling the effects of the worldwide slowdown with textile plants facing huge over-capacity as workers are laid off and unsold goods stockpiled, Reuters reported on Sunday. A similar situation exists in Vietnam.
Meanwhile, Vietnam expected textile and garment exports to rise only 5 percent in 2009, compared with a forecast of 17 percent for this year, Thoi Bao Kinh Te Viet Nam (Vietnam Economics Times) reported on Tuesday, citing the Vietnam Textile and Apparel Association.
Many businesses in Vietnam said that at this time of the year they usually receive orders for the first half of the following year, but this year not many orders have been placed and some small importers have even disappeared.
As a result, local businesses said they were trying to find new markets for their products.
Pham Xuan Hong, general director of Saigon 3 Garment Company, said a group of HCMC textile and garment companies has made a trip to Russia to learn more about this potential market.
Hong said as local producers had previously focused on the US market, they were unaware of the potential of the Russian market.
He said in the past, it had been difficult to receive payments from Russian importers. However, the payment problem has been solved, and local exporters are now able to connect with some Russian banks, he said.
Chinese products have been dominating the apparel and textile market in Russia but with Russian consumers having higher demand for quality products, Vietnamese exporters have a chance to enter the market through this segment, Hong said.
But Truong Dinh Tuyen, a member of the National Currency Policy Council, said Vietnamese exporters need to lower their prices to have a better chance in the competition against Chinese producers.
Only lower-priced products would sell well because of the global economic slowdown, he said.
Moreover, local exporters need to become less dependent on the US market, Tuyen said, noting that they should take advantage of the Economic Partnership Agreement, a free trade agreement recently signed between Vietnam and Japan, to boost exports to Japan.
The government has set a target for textile and garment exports of US$10 billion-12 billion in 2010 and $20 billion-22 billion in 2020, according to the Vietnam Textile and Apparel Association.
The country, home to more than 2,000 textile and garment firms which employ two million workers, is expected to earn around $9.2 billion-9.3 billion this year.
Nguyen Khanh
thanhnien
|
