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Hard times for Vietnam's small apparel firms
May '16
Vietnam's small and medium apparel enterprises struggled to survive in the first quarter of 2016, with many of them suspending production, as their customers shifted orders to Myanmar and Laos to enjoy lower prices, Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (Vitas) said at a conference in Ho Ch Minh City recently.

Vietnam exported $27.4 billion worth of apparel last year and over $8 billion in this year's first four months, up 6 per cent against the same period a year earlier, Giang said.

But the Vitas chief said that despite rising shipments, the industry is coping with a slew of challenges. Many small and medium enterprises have been mired in difficulties as they have found it hard to compete.

Giang explained that apparel products of Myanmar and Laos enjoy special tariffs for exports to Europe and the US while Vietnamese firms will have to wait until 2018 to make use of preferential tariffs to export products to these two major markets when the new free trade agreements with them take effect.

Additionally, apparel enterprises have become exhausted by so many inspections by customs, taxation, labour, environment and food safety authorities, with up to three or four inspection teams a quarter.

Giang also reiterated Vitas's request to the Government to revise the master development plan for the textile-garment industry towards 2020 as it is now outdated. Vietnam's apparel exports exceeded $27 billion last year against a target of $20 billion for 2020.

He also said that the plan must be revised to match the development of industrial parks to facilitate management and wastewater treatment.

In response, Minister of Industry and Trade Tran Tuan Anh said the development plan would be revised next year to make it compatible to the country's international integration moves. (SH)

Fibre2Fashion News Desk – India

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