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VITAS urges garment makers to review strategies
20
Apr '12
The Vietnam Textile and Apparel Association (VITAS) has advised the country's textile and garment sector to review its strategies, so as to realise its growth targets for the 2010-15 period.

At a conference jointly held by EU-Vietnam Multilateral Trade Assistance Project (MUTRAP) and the Vietnam Chamber of Commerce and Industry, VITAS Deputy General Secretary, Nguyen Van Tuan said heavy reliance on imported raw materials is the biggest challenge faced by the industry.

Under the existing plan, the industry needs to achieve a growth rate of 25 percent and an overall turnover of US$ 25 billion, to achieve its growth target for the current year. Exports are expected to contribute around US$ 19 billion of this turnover, Mr. Tuan said.

Vietnamese apparel industry is expected to achieve a 25 percent growth during 2013 and 15 percent during 2014 and 2015. The turnover during these years is expected to touch US$ 31.25 billion, US$ 36.94 billion and US$ 42.48 billion, respectively.

In spite of the impressive growth rate, Vietnamese clothing industry needs to import a considerable part of its raw material requirement.

Domestic resources supply only 0.75 percent or 3,000 tons, of the industry's overall requirement of 400,000 tons per annum of natural cotton.

Similarly, for artificial fibres, domestic sources supply only 120,000 tons, against the overall demand of around 400,000 tons.

Vietnamese textile industry relies on imports even for sourcing all its equipments and parts requirements.

Last year, the apparel sector enterprises imported 5.2 billion metres of fabric, against its total requirement of 6 billion metres.

Besides, garment enterprises also import 75 percent of the accessories they use.

The Vietnamese textile and apparel industry houses around 4,000 enterprises, including 650 foreign invested enterprises. While domestic enterprises adhere to the Cut/Make/Trim (CMT) method, majority of the foreign-invested enterprises use original branding manufacturing (OBM) or Original Designing Manufacturing (ODM).

Obsolete production machinery, poor management ability, lack of skilled workers and volatile financial conditions are some other factors obstructing the growth of Vietnamese clothing sector, Mr. Tuan noted.

To tap its optimum potential, Vietnamese apparel industry should try to improve its distribution network and develop brand identity for products, he suggested.

To reduce reliance on imported raw materials, apparel enterprises in Vietnam should raise their investment in production of raw inputs and accessories, including artificial fibre, natural cotton and dyeing, he added.

Fibre2fashion News Desk - India


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