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Key export sectors battered by economic slump
Textile, garment, and footwear producers continue to feel the pain of the global economic downturn as their export orders dry up.
Le Quoc An, chairman of the Vietnam Textile and Apparel Association, said only renowned companies have enough orders in the first quarter, adding some like Viet Tien, Nha Be and GARCO 10 have orders for the whole year.
But Nguyen Thi Thanh Huyen, general director of GARCO 10, admitted in a television interview last month that orders had slumped 20-30 percent while customers demanded 20-30 percent discounts.
Pham Xuan Hong, deputy chairman of the Ho Chi Minh City Textile and Apparel Association, said some importers had cancelled as much as 50 percent of the orders they had placed in 2008.
He expected some investors, especially foreign firms coming to Vietnam to export to the US and EU, to close down factories or cut production soon.
The textile and footwear industries, which employ more than two million workers, are expected to account for up to 24 percent of the country’s total exports this year.
In January, textile and apparel exports were worth US$550 million, a 33-percent year-on-year decline, and footwear exports $350 million, down 26 percent.
Nguyen Ngoc Lam, director of Hai Phong Leather and Footwear Company, said sports shoes orders had slumped 40 percent in the final quarter of last year and they are expected to fall further in the first quarter.
Truong Thi Thuy Lien of Lien Phat Footwear Company said the sector would also face other difficulties since Vietnamese shoes continue to attract anti-dumping duties and the EU has decided to withdraw Vietnamese footwear from its preferential tariffs program.
The EU imposes a 10 percent antidumping tax on Vietnamese shoes while Vietnamese shoemakers have to pay almost double the current duty of 3.6 percent, starting this year, after the bloc removes the Vietnamese footwear industry from its Generalized System of Preferences.
“The biggest concern is prices,” Le Hong Khoa, chairman of the Binh Duong Textile and Apparel Association, said.
“Customers constantly demand price cuts. We are negotiating with them for orders for the second quarter.”
He said footwear makers need to hold on to traditional markets by negotiating with them over prices since it takes a long time to penetrate new markets.
Nguyen Ngoc Luong, director of footwear and handicrafts exporter Phong Chau Company, said in the current economic context businesses should not wait for trade fairs to promote their products.
They should coordinate with Vietnamese commercial agencies in foreign countries to introduce their products directly to potential customers, he said.
The Vietnam Textile and Apparel Association’s An said a group of companies would soon visit Dubai looking for business.
The country has set itself an export target of $9.5 billion for the textile and garment industry and $5.1 billion for footwear this year.
Last year, the sectors respectively achieved exports of $9.1 billion and $4.7 billion.
VNA, Thanh Nien
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