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Myriad challenges engulf Vietnamese garment sector
Mar '12
It is not going to be easy for Vietnam's textile and garment industry to achieve the export target of US$ 18.5 to US$ 19 billion set for the current year, Dang Phuong Dung, Vice Chairman and Secretary General of Vietnam Textile and Apparel Association (VITAS), said.

Ms Dung said Vietnam's key markets like the EU, US and Japan are still plagued by global financial crisis. She added that owing to debt crisis, EU customers are holding back their expenditure, which has resulted in a decline in apparel export orders.

Discussing the challenges faced by the domestic industry, she said manufacturing costs, power, water and fuel charges, salaries of workers and interests on bank-loans are all rising.

She said that dearth of skilled manpower is also a major challenge, which is restraining many firms from fulfilling their orders or contracts, as product quality gets affected due to inadequate workforce.

According to Ms. Dung, companies should develop a sense of social responsibility, ensure fair returns for workers, evolve healthy work atmosphere and generate sufficient promotion opportunities for workers.

Further, she also stated that higher dependence on imported inputs and outsourcing orders that generate low returns may not prove helpful in improving the sector's exports or its competitiveness.

The Vietnamese apparel industry lags behind in terms of efficient technology, production and productivity. Majority of the small- and medium-sized enterprises (SMEs) still lack marketing skills, and fall short of design efficiency for producing unique products. Moreover, trademarks have not been developed properly, Ms. Dung said.

While exporters lack sufficient capital required to fetch imported inputs, they also face problems in obtaining bank loans. This forces them to curtail their operations and accept only outsourcing orders, which is adversely affecting the competitiveness of the Vietnamese garment industry, the VITAS official concluded.

Fibre2fashion News Desk - India

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