US demand grows for VN textiles and garments
Third-quarter numbers for Viet Nam's textile and garment industry show US demand growing and taking the lead amongst buyers, accounting for nearly 50 per cent of the industry's total export revenue so far this year.
According to statistics from Viet Nam's General Department of Customs, export revenue for the first nine months of this year reached nearly US$17 billion, of which $8.3 billion came from the US market.
While total textile and garment export value grew by 10 per cent compared to last year, the US market outstripped it with a 13.6 per cent increase. This means US buyers are active leaders of the sector's expansion.
The second and third largest importers trail the US considerably; Japan imports $2.03 billion, and South Korea $1.54 billion.
Exporters in the industry look favourably on a constellation of recent free trade agreements, like one already signed with Korea, the Eurasian Economic Union Free Trade Agreement signed in May and the long-discussed Trans-Pacific Partnership (TPP).
If the TPP is signed, Viet Nam textile and garment exports to the US will see the current 17-30 per cent tariffs dropped.
The sector plans to take advantage of the EU-Viet Nam Free Trade Agreement whose negotiations were finalised in August. Once the parties sign the agreement, the 12 per cent tax on Viet Nam's textiles and garments will cease, making the products more competitive in the market.
Apparel firms invest in technologies to prepare for TPP
Local textile and garment enterprises regard investments in modern technologies as a way to help them address challenges and compete as foreign enterprises are flocking to Vietnam to benefit from the Trans-Pacific Partnership (TPP).
Saigon Garment Manufacturing Trading Joint Stock Company (Garmex Saigon) has recently spent much on purchasing automated machines to replace outdated equipment which is mainly operated manually and requires much labor.
According to Nguyen An, general director of Garmex Saigon, machines are now cheaper than earlier and many textile and garment companies are purchasing new machines with high technology. For instance, a Juki one-needle sewing machine was sold at US$600 some 20 years ago but a programmable sewing machine of Juki is priced US$580 now.
Complex details of old machines require workers with good skills while unskilled workers can sew well with new machines. Besides, cloth cutting machines that Garmex Saigon has recently bought have helped reduce the number of workers at this stage by 80% in comparison to old machines.
An said investing in modern machines, organizing production activities systematically and improving management are necessary for textile and garment enterprises due to increasing competition in terms of product price and labor.
According to An, the world economy has yet to fully recover and producing countries are competing intensely in terms of price. As a result, using advanced machines can help the company increase productivity and reduce material losses in order to offer competitive prices.
In addition, with Vietnam’s participation in the TPP, there will be more foreign enterprises coming to Vietnam to invest in the textile-garment sector to get tariff incentives when exporting products to TPP states like the U.S. Therefore, Vietnamese enterprises will face tough competition regarding labor as foreign direct investment (FDI) enterprises have special policies to attract workers.
Without investments in technologies and modern machines from now on, textile and garment enterprises would face stronger competition from FDI enterprises, An added.
According to Pham Xuan Hong, chairman of Saigon 3 Garment Joint Stock Company and chairman of the Association of Garments, Textiles, Embroidery and Knitting (AGTEK), the textile-garment sector is not attractive to workers, making enterprises active in the field lose staff easily.
When skilled workers quit their jobs, enterprises normally have to employ unskilled ones and train them. Therefore, to ensure productivity and quality, enterprises need to invest in new technologies and equipment.
Hong said textile and garment enterprises cared about exhibitions on machines used in the sector like the15th Vietnam International Textile and Garment Industry Exhibition (VTG 2015) set to open on Wednesday in HCMC. The four-day expo will take place at Tan Binh Exhibition and Convention Center (TBECC) in Tan Binh District.
There are real demands, which require exhibitors at the expo to provide useful information for textile and garment enterprises, according to Pham Quynh Giang, deputy general director of Vietnam National Trade Fair and Advertising Joint Stock Company (VINEXAD).
VTG 2015 is organized by VINEXAD in coordination with Taiwan’s Chan Chao International Co., Ltd, Hong Kong’s Yorkers Trade and Marketing Service Co., Ltd, Hong Kong’s Paper Communication Exhibition Services, AGTEK and the Vietnam Cotton and Spinning Association (VCOSA).
More than 125 local and foreign enterprises with nearly 300 booths will showcase their innovative products and technologies. Exhibitors are from 12 countries and territories, including Vietnam, Thailand, Singapore, Japan, Hong Kong, Germany, Turkey, South Korea, India, Taiwan, Malaysia and China.
U.S. to increase hardwood supply to Vietnam
The United States has an ample source of hardwood supply and can double or even triple shipments to Vietnam to meet increasing demand for materials to turn out wooden products for export, said Michael Snow, executive director of the American Hardwood Export Council (AHEC).
The U.S. is Vietnam’s second biggest supplier of hardwood, with export revenue totaling US$238 million last year, up 10.7% year-on-year, Snow told a seminar on American hardwood held last Friday by AHEC, the Handicraft & Wood Industry Association of HCMC and the HCMC Architects Association.
Snow said the U.S. always exploits less than half of available hardwood, so its supply never goes down. In addition, the nation strictly manages forests to ensure sufficient wood supply.
Wood material imports from the U.S. into Vietnam have surged over the years but the U.S. can supply more hardwood to meet rising demand in this Southeast Asian market. Vietnam’s export of wooden products to the U.S. has risen sharply.
Snow told the Daily that the U.S. imposes strict criteria on the legality of wood and requires imported wooden products to be manufactured from wood with legal origin.
Therefore, Vietnamese furniture exported to the U.S. must have clear origin. The U.S. also applies technical conditions to chemicals in imported products, so Vietnamese exporters should study these requirements before selling wooden items stateside.
According to a report by the Handicraft & Wood Industry Association of HCMC, the U.S. is now the biggest export market for Vietnam’s wooden products with export revenue of US$1.2 billion in the first six months of this year, up 18.8% against the same period last year.
Vietnam’s total woodwork export revenue in the January-June period of this year rose by 8.8% year-on-year to US$3.2 billion and is forecast at US$3.7 billion in the second half of this year.
Source: http://investorshub.advfn.com/
Key words: Big textile industry, gathering in Vietnam
