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Vietnam sets high garment export target for 2012
01 Dec '11
3 min read
In spite of several adversities foreseen to block the way of Vietnamese garment industry's growth next year, the industry has fixed a high export target for 2012.
The industry has fixed a target of achieving US$ 15 billion in exports during next year, up from current year's target of US$ 13 billion, which the industry is most likely to achieve as it has already surpassed the US$ 10 billion mark.
According to the Vietnam Textile and Apparel Association (Vitas), challenges like volatility in interest and exchange rates and high inflation, coupled with continuing public debt crisis in the EU, one of the country's major export destinations, and financial crisis at home front may hinder the industry's export growth next year.
Inflation in the country is expected to keep at around 10 percent during next year, which is higher than that prevailing in other countries that compete with Vietnam in the international textile market. Higher inflation would mean that costs of various amenities like fuel, water and electricity and also salaries would keep going up, affecting the industry's competitiveness.
In spite of several efforts of the Government to bring them down, interest rates on loan still prevail at higher levels, due to which several textile units are facing inadequacy of finances to fund their production and expansion plans. In such a scenario, very few garment manufacturing units have succeeded in obtaining credit on easy terms.
To counter these obstacles and to meet next year's target, the industry has devised some measures like slowly reducing its reliance on sub-contracting for other manufacturers. The industry even proposes to enhance the use of local inputs to bring down its costs and embrace appropriate policies to lure workers.
As stated by Vitas, export growth to major markets including the US, Japan and the EU is likely to witness a 10 to15 percent drop during next year. Hence, the industry plans to accelerate exploration of new markets like Canada, South Korea and Russia, to enable it to achieve next year's target.
It is not that the industry is facing any of these challenges for the first time, and even with high inflation and continuously rising prices of inputs, it managed to boost its exports beyond US$ 11.2 billion achieved in 2010.
By October this year, exports to the EU grew by 41 percent, while those to the US rose by 14 percent. However, Japan topped the list as it accounted for 52 percent of the overall garment exports from Vietnam during the period.
The industry has fixed a target of achieving US$ 15 billion in exports during next year, up from current year's target of US$ 13 billion, which the industry is most likely to achieve as it has already surpassed the US$ 10 billion mark.
According to the Vietnam Textile and Apparel Association (Vitas), challenges like volatility in interest and exchange rates and high inflation, coupled with continuing public debt crisis in the EU, one of the country's major export destinations, and financial crisis at home front may hinder the industry's export growth next year.
Inflation in the country is expected to keep at around 10 percent during next year, which is higher than that prevailing in other countries that compete with Vietnam in the international textile market. Higher inflation would mean that costs of various amenities like fuel, water and electricity and also salaries would keep going up, affecting the industry's competitiveness.
In spite of several efforts of the Government to bring them down, interest rates on loan still prevail at higher levels, due to which several textile units are facing inadequacy of finances to fund their production and expansion plans. In such a scenario, very few garment manufacturing units have succeeded in obtaining credit on easy terms.
To counter these obstacles and to meet next year's target, the industry has devised some measures like slowly reducing its reliance on sub-contracting for other manufacturers. The industry even proposes to enhance the use of local inputs to bring down its costs and embrace appropriate policies to lure workers.
As stated by Vitas, export growth to major markets including the US, Japan and the EU is likely to witness a 10 to15 percent drop during next year. Hence, the industry plans to accelerate exploration of new markets like Canada, South Korea and Russia, to enable it to achieve next year's target.
It is not that the industry is facing any of these challenges for the first time, and even with high inflation and continuously rising prices of inputs, it managed to boost its exports beyond US$ 11.2 billion achieved in 2010.
By October this year, exports to the EU grew by 41 percent, while those to the US rose by 14 percent. However, Japan topped the list as it accounted for 52 percent of the overall garment exports from Vietnam during the period.
Fibre2fashion News Desk - India
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