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Garment satellite companies thirsty for orders
As garment companies nowadays have few jobs, satellite enterprises are suffering.
Scrambling for outsourcing orders
In the first two months of the year, garment export turnover was $1.15bil, down by 12% from the same period of last year. Some 70% of export companies only have short-term orders for the next one or two months, according to the Vietnam Textile and Apparel Association (Vitas).
H, the owner of a workshop in Tan Binh district in HCM City, related that as garment exporters do not have many export contracts, his workshop does not have many outsourcing jobs to do.
H said that in order to survive the difficulties and get enough jobs for labourers, satellite workshops like his all have to slash outsourcing unit prices and scramble for contracts.
He went on to say that he is scrambling for contracts whatever it costs. He has decided to cut the outsourcing unit price by 20%, while he also has to pay commissions to business managers of partner companies.
He said he had to borrow VND30mil from relatives to pay for workers while waiting for payments from clients.
According to H, two workshops in districts 6 and 11 have shut down. Another workshop in Tan Binh district, well known for low outsourcing prices, once had 30 workers, but has cut its workforce to 10.
The remaining workers are being fed and provided accommodations, but they will not get salaries until the end of the year. The minimum salary is VND8mil per annum, while the highest level depends on production and sales.
As there have been fewer orders, the outsourcing price has been decreasing dramatically. The fee for tailoring a pair of shorts, a shirt or a T-shirt has dropped by VND2,000-5,000/product, or 15-25%.
Both owners and workers miserable
Tran Thi Hoang Lan, 22, in Tan Phu district, related that previously, she earned VND1.2-1.5mil a month, while she now gets only several hundred thousand VND a month since there are not many jobs to do.
Nguyen Thin, the owner of the workshop where Lan works, also complained that last year he borrowed VND20mil from banks to purchase new machines. However, as not many orders are coming in these days, he is only paying interest while the principal is frozen.
Thin related that he plans to dismiss some workers, but all the workers say they have big financial difficulties.
Pham Thi Nguyen Thanh, in charge of the domestic market of Thanh Cong Textile and Garment Company, said that the company’s export markets have been narrowed, while domestic consumption has decreased by 10-30%.
Vietnam’s main export markets, including the US and EU, have been sharply reducing orders. Vietnamese enterprises have been forced to lower outsourcing prices. However, they only have orders for March.
Businesses exporting to the US are the biggest sufferers. Some have reported the decrease of 50% in orders the first two months of the year.
VietNamNet, SGTT
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