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Textiles and garments industry weather economic downturn
Despite the global economic downturn, the country’s textile and garment industry is continuing to hold on to traditional markets and maintaining export levels, while continuing to find new overseas markets. The Viet Nam News spoke with Viet Nam Textile and Apparel Association (Vitas) chairman Le Quoc An on the sidelines of the Viet Nam International Fashion Fair about the state of the textile and garment industry.
Will the garment industry manage to achieve its export target of US$9.3 billion this year?
According to the latest statistics, the textile and garment sector’s turnover is over $6.7 billion. The Government has set a growth rate of 3 per cent, which means its annual target will be approximately $9.3 billion. This means from now until the end the year, the sector has to earn a monthly export turnover of $800 million.
Most garment and textile manufacturers are running at full speed. In the first two weeks of November, the export turnover was better than the same period last year.
Over the first two weeks of November, garments and textiles reached an export turnover of around $450 million. In November last year, export turnover was just $760 million.
Earlier this year we did not think we would reach our export target of $9.3 billion, but now it looks like we will.
Next year, the global textile and garment market will be fiercely competitive and big players like China, India and Bangladesh will be very active. However, Vietnamese manufacturers have been boosting their exports, and have received lucrative orders from well-know fashion agencies and big importers such as the US, the EU, Japan and South Korea. Previously, China, India and Bangladesh were major exporters to these countries. Now it is gradually shifting to Viet Nam. Besides, traditional markets and arising markets such as South America, Africa and the Middle East are looking to Viet Nam.
What difficulties do Vietnamese manufacturers face?
Apart from rising competition from big markets like the US, Japan and South Korea, Vietnamese textile and garment companies have to deal with great challenges such as the import of raw materials, a shortage of highly skilled workers, poor designs and high production costs. However, domestic companies are still very competitive thanks to cheap labour compared to China, India and Bangladesh.
Can you brief us about where you see the domestic textile and garment industry going in the next few years? Specifically, since early January 2010, imports to the US will have to have third-party certificates stating that they are not harmful?
The law on environmental protection in general and the US in particular will be a great challenge, particularly in terms of time. The entire textile and garment industry must consider environmental protection in their workshops and further invest in building dying factories equipped with proper discharge systems as well as upgrading quality testing centres to assist manufacturers meet required standards.
The sector also needs to improve product safety standards.
Can you elaborate on the industry’s expansion plans?
Next year, the Vietnamese textile and garment industry is expected to gradually recover. Consumption will increase but it will not be as it was before the crisis.
In Viet Nam, investment in raw materials remains modest. As a result, we expect to reach an export turnover of $10.5 billion. Although the global textile and garment market till the end of this year and next year is showing good signs of potential, the key mission for domestic companies is to invest in developing a robust domestic market. Vietnamese companies have spent much on designs and raw materials, and on reducing costs to meet Vietnamese demand.
By 2015, the country’s textile and garment exports are expected to reach $17 billion – $1 billion lower than its target.
Deputy Minister of Industry and Trade Bui Xuan Khu said the economic crisis would ease from now until the end of this year. Next year, the economy will start recovering. Between 2011and 2015, the sector must strive to obtain a growth rate of 11 per cent a year.
To reach its target, the Viet Nam Textile and Garment Group (Vinatex) and the Viet Nam Textile and Apparel Association (Vitas) must train personnel and focus on developing the industry, particularly support industries, dying and cotton growing.
According to Khu, Vitas and Vinatex should develop a strategic plan to meet the industry’s target of $18 billion in export turnover in 2015.
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