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VJEPA opens Japan’s doors wide to VN’s apparel products
Vietnamese garment exports to Japan are expected to rise 20 percent to $1 billion in 2009, thanks in part to the abolition of tariffs beginning on October 1.
The business newspaper Saigon Tiep thi reports that, according to the Vietnam Textile and Apparel Association (Vinatas), orders from Japan have been increasing continuously, anticipating the entry into force of the Vietnam-Japan Economic Partnership Agreement (VJEPA) on October 1.
Eighty percent of Vietnam’s garment companies now have full order books through the end of the year. It is estimated that 30 to 40 percent of the orders have come from Japan.
VJEPA brings a golden opportunity . . .
The Saigon 3 Garment Co. has signed a memorandum of understanding with Japanese partners that will use its full capacity until the middle of 2010. Though previously Saigon 3 has made a wide range of shirts, jackets and sportswear, it is retooling to make jeans and khaki pants for Japan. Its a market where, says General Director Pham Xuan Hong, “consumers are very fastidious. We need to specialize to be able to provide higher quality products.”
Saigon 3 led 47 Vietnamese enterprises that exported jeans to Japan in the first seven months of 2009, with export revenue of $16.7 million, a gain of 82 percent over the previous year.
Hong explained that though his company has to invest heavily to meet the strict requirements of Japanese importers, in return, it can have stable export prices. By comparison, the prices of exports to the US and Europe always fluctuate.
Saigon 3 earns up to $1.30 per pair of jeans exported to Japan, while it gets only $1.20 when exporting jeans to the US. Hong said that the gap between the prices of exports to the US and Japan is not big, but he really appreciates the steadiness of the orders from Japan. However, the company must take care to maintain quality. “For example,” said Hong, “we inspect the goods we send to the US twice, but orders for Japan must be checked four times.”
. . . but exports are unlikely to skyrocket
Nguyen Hong Trang, Director of Son Kim Co., which specializes in underwear and sleepwear for export to Japan, believes that the zero tariff scheme will surely bring new orders. However, Trang doubts that Vietnam’s exports to Japan will soar in the first period of VJEPA implementation. The high value Japanese people set on the quality of products is a high barrier for many exporters.
Son Kim will build a new factory which will allow it to increase the volume of products that meet Japanese partners’ requirements.
An Phuoc Co. has exported underwear to Japan for 15 years. Director Nguyen Thi Dien stressed that garment companies need particularly skillful workers to make products for the Japanese market. Japanese importers do not forgive imperfect products.
Horikoshi, a fashion designer who has been a consultant to Vinatex, doubts that Vietnamese products will be able to compete with Chinese products in Japan in low cost market segment, but, he emphasized, Vietnam has the opportunity to ship growing amounts of high grade products there.
To date, no Vietnamese apparel brands are well-known in Japan.
According to the Ministry of Industry and Trade, Vietnam-made products of all kinds now account for just 1.19 percent by value of Japanese imports, trailing Malaysia (3.05 percent), Thailand (2.73 percent), Indonesia (4.27 percent) and China (18.83 percent).
vietnamnet, sgtt
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