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Apparel exports earnings fall 1.3% in first half
Viet Nam earned US$4 billion from apparel exports in the first half of the year, 1.3 per cent down on the same period last year, the Viet Nam Textile and Apparel Association reported.
The association said there had been a fall in demand from major markets including the US and EU where the apparel retail turnover was reported to have fallen by up to 20 per cent.
Viet Nam apparel producers said export contract numbers fell by up to 25 per cent and prices were down 10-15 per cent, causing producers, especially small- and medium-sized ones, to cut jobs.
Association deputy general secretary Nguyen Son said the future looked positive, however, as producers had indicated the number of export contracts, especially jacket shipments to US and EU, was on an upward trend.
That was a good news for workers but the profit would be insignificant as the apparel export price had fallen 15 per cent over the first quarter.
Viet Tien Garment Joint Stock Company general director Bui Van Tien said his firm would have to employ more workers to meet export contracts that had increased in volume by 20 per cent over the first quarter.
The company has 13 garment producing factories in the south, employing 23,000 locals.
Son said many apparel exporters had started recruiting workers after months of cutting jobs.
Industry insiders said from now to September would be the main season for the apparel industry but from October it could get difficult if the world economy did not rebound.
The sources said the apparel industry could meet its export target of $9.5 billion this year if the number of export contracts remained stable with $5 billion being from the US alone.
Apparel enterprises are managing their source of raw materials to improve the stability of the industry’s development for the coming years.
The enterprises have also turned to the domestic market to offset the export reductions through promotion programmes through wholesale and retail distribution channels and at supermarkets nationwide.
Textiles, garments good
Viet Nam’s textile and garments sector presents great potential for Korean investors with lower production costs and high export revenue possibilities, industry insiders say.
Their assessment was made known during meetings last week with a visiting delegation comprising five textile and garment businesses from South Korea.
Meeting with the Viet Nam Textile and Apparel Association (Vitas) and the Viet Nam Textile and Garment Corporation (Vinatex), Kyo Won Yoon, head of the South Korean team said they wanted to study the preferential investment policies and the demand for use of fabrics in Viet Nam before establishing a presence in the local market.
Kyo Won Yoon said Korean businesses were interested in Viet Nam’s garment industry because of the high investment needed for materials production and high labour costs for making export items in Korea.
The Korean businesses were looking to build textile and spinning mills in Viet Nam to develop the traditional industry in a big market of more than 80 million people, he said.
Le Tien Truong, Vinatex deputy general director, highlighted the potentials of garment industry in Viet Nam with export revenues of several billion dollars each year.
As one of the country’s major export lines, the industry also attracts a large, young and industrious workforce, he added.
Truong said the local industry encourages Korean firms to set up textile and spinning mills to make products for export.
He said the dyeing and weaving sectors lagged behind the local market demand, creating opportunities for Korean companies to invest in the sector and establish their brands in the local market.
He said Korean businesses investing in textile and spinning mills will have favourable conditions to sell their products in the Vietnamese and Japanese markets.
According to textile industry officials, Korea ranks second in the number of companies investing in Viet Nam’s textiles and garment sector.
They said a number of Korean textile firms who had invested in China are now planning to shift to Viet Nam especially after Viet Nam joined the WTO in early 2007.
Seong Ki Hak, Chaiman of Korea’s Youngone Textile and Garment Group said the group has invested in building a sportswear factory in northern Nam Dinh Province, alongside several garment factories in China and Bangladesh.
He said many Korean businesses had increased investment in Viet Nam because it offers cheap labour costs while production and labour costs in Korea have increased rapidly over the past few years.
In 2008, Viet Nam’s garment exports recorded US$9.1 billion in revenue, but the country had to import up to $6 billion worth of garment materials such as dyeing chemicals, yarn and thread.
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