With positive signs on orders from the beginning of the year, export activities of the textile and garment industry in 2019 are expected to be quite positive.
High export growth
According to the statistics of the General Department of Customs, in January, the export turnover of textile and garment products reached 3.294 billion USD, up by 32.6% over the same period last year. This is a very high growth compared to the average level of recent years (only at around 10%). The textile export turnover growth in January was nearly 4 times higher than the average export growth rate of the whole country in this month (the export growth of the whole country was 8.9% in January).
Information from Vietnam Textile and Garment Group also showed that the orders of the textile industry in 2019 are also very positive. From the end of 2018, many enterprises had orders for the first 6 months and even for the whole of 2019. According to Vietnam Textile and Garment Group, the textile and garment industry had a successful 2018 with export turnover of over 38 billion USD, an increase of over 16%. This was the highest increase in the last 3 years. In which the value of surplus reached nearly 18 billion USD, an increase of nearly 14.4% compared to 2017. Following the development momentum of 2018, in 2019, the textile and garment industry aims to achieve export turnover of 40 billion USD, growing nearly 11%, reaching a trade surplus of 20 billion USD, ensuring jobs and increasing income for 2.85 million workers.
Along with positive signals from the orders, many experts and businesses also said that Vietnam's textile industry is attractive to customers thanks to its high competitiveness in terms of quality, price, and services compared to some great nations of textiles and garments in the region. Besides, the supply chain is gradually being completed because the capital investment in textile and dyeing industry and raw materials are increasing. In particular, the Agreements with Japan, Korea, EU, especially with the CPTPP, are creating great attraction for orders for Vietnam's textile and garment industry. These will be positive factors for the production and business activities of Vietnam’s textile and garment industry in 2019.
Mr. Pham Xuan Hong, Chairman of Textile and Apparel Association of Ho Chi Minh City said that the situation of orders of enterprises in Ho Chi Minh City in the first and the second quarter of 2019 was relatively stable without big changes. Although the order quantity did not increase much, and there were not more new customers, the orders of enterprises also met the production needs of enterprises and jobs for workers. From the order situation, Mr. Hong said that the prospects of the textile and apparel industry this year were quite positive.
Difficulties still exist
Despite the above advantages, according to Mr. Pham Xuan Hong, Vietnam's textile and garment industry is still facing great competitive pressure with regional countries in terms of labor costs because of its continuous increase, along with adjusting minimum salary and related regimes for employees. Moreover, other input costs also increased while the price of orders did not increase. Although companies in the industry have made great efforts in reducing costs through the application of science and technology into their production, but even with investment in equipment to improve productivity, it is still difficult to compete with other regional nations.
With the same point of view, Mr. Phan Van Viet, General Director of Viet Thang Jean Co., Ltd., also said that orders with many textile enterprises were tending to decrease because they were not able to compete with other regional countries on production costs. Currently, the production costs of Vietnam’s textile and apparel industries are about 30% higher than other nations like Cambodia, Bangladesh, Indonesia and Malaysia. Therefore, easy-to-do orders tend to move to other countries instead of Vietnam.
In addition to the above reasons, according to Mr. Viet, many orders for textile enterprises in Ho Chi Minh City declined in the first months of 2018, and it is expected that this situation will continue until the middle of the year. The reason is that the global retail fashion market is slowing down, the rental costs are unstable, and online forms of business is growing, which has significantly affected businesses. "On the side of Viet Thang Jean, although orders has decreased, it is still balanced because the enterprise applied technology 4.0 in production a few years ago to create exclusive products, so we can retain traditional customers,” said Mr. Viet.
Applying technology, investing in equipment to improve labor productivity, product quality and saving production costs, are also solutions recommended by the Textile and Apparel Association in the current situation. According to Mr. Pham Xuan Hong, Vietnamese textile and garment enterprises have advantages in management capacity, workers' skills, product quality, delivery time, but their weakness is the less competitive labor costs. In order to overcome this weakness, they must link together to share their orders, ensuring stable jobs for employees. Besides, it is necessary for the businesses to learn how to improve the production management to increase productivity and reduce costs. Especially the enterprises need to focus on exploiting the FTAs, including issues of origin and self-certification on origin to make the most of the benefits of the FTAs in export activities...
Source: VCN
Key words: textile exports, grew, positively
