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EU, US financial crisis to affect Vietnamese garment exports
17 Oct '11
2 min read
The ongoing financial crisis in the European Union and the United States will affect the garment and textile industry of Vietnam, which is likely to witness a fall in its export orders for the next year.
At present, Vietnam each month makes over one billion USD in garment and textile exports, as per the data of the Ministry of Industry and Trade (MoIT).
Vietnam's garment and textile exports grew robustly during the first three quarters of the current year to touch the four-year high of US$ 10.5 billion. Hence, the industry is likely to achieve its current year's export turnover target of US$ 13 to 13.5 billion.
However, the decrease in the purchasing power of buyers in the US and the EU has adversely affected the Vietnamese garment and textile industry. It is facing capital shortage owing to the import of raw material worth US$ 9.2 billion.
The hike in minimum wages of the workers that became effective from start of the current month has also added to the difficulties of the textile and garment exporters, as wages now constitute 65 percent of their total production costs.
MoIT said the garment and textile manufacturers should play their part in improving cotton cultivation and enhance their production capacity. The Ministry intends to enhance the industry's overall cotton production to 500,000 tons per year, while generating 2.75 million new job opportunities.
The Government plans to make the garment industry a leading export sector, the Ministry added. While the sector has a yearly growth rate of 12 to 14 percent, its exports have been growing at a rate of 15 percent.
As the industry looks forward to increase the ratio of genuine design production to 20 percent through 2020, it would mainly focus on cotton, fibre, garments and knitwear.
Today, Vietnam is home to over 3,700 garment and textile enterprises, with majority of them clustered in big cities like HCM City and Ha Noi.
At present, Vietnam each month makes over one billion USD in garment and textile exports, as per the data of the Ministry of Industry and Trade (MoIT).
Vietnam's garment and textile exports grew robustly during the first three quarters of the current year to touch the four-year high of US$ 10.5 billion. Hence, the industry is likely to achieve its current year's export turnover target of US$ 13 to 13.5 billion.
However, the decrease in the purchasing power of buyers in the US and the EU has adversely affected the Vietnamese garment and textile industry. It is facing capital shortage owing to the import of raw material worth US$ 9.2 billion.
The hike in minimum wages of the workers that became effective from start of the current month has also added to the difficulties of the textile and garment exporters, as wages now constitute 65 percent of their total production costs.
MoIT said the garment and textile manufacturers should play their part in improving cotton cultivation and enhance their production capacity. The Ministry intends to enhance the industry's overall cotton production to 500,000 tons per year, while generating 2.75 million new job opportunities.
The Government plans to make the garment industry a leading export sector, the Ministry added. While the sector has a yearly growth rate of 12 to 14 percent, its exports have been growing at a rate of 15 percent.
As the industry looks forward to increase the ratio of genuine design production to 20 percent through 2020, it would mainly focus on cotton, fibre, garments and knitwear.
Today, Vietnam is home to over 3,700 garment and textile enterprises, with majority of them clustered in big cities like HCM City and Ha Noi.
Fibre2fashion News Desk - India
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