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Vietnam garment export growth will be lower in 2014: VITAS
31
Jan '14
The growth of garment exports from Vietnam is expected to be lower this year, according to the Vietnam Textile and Apparel Association (VITAS).
 
Vietnam garment industry is facing problems like rising labour costs, heavy dependence on imported raw materials, and intense competition from low-priced products from other countries, and hence the export growth is likely to be only around 12 percent this year, compared to the 18 percent growth registered in 2013, VITAS chairman Pham Xuan Hong said, reports Thanh Nien News.
 
Mr. Hong said Vietnam garment sector is facing fierce competition from countries like Bangladesh which offer products at lower costs due to their lower labour costs.
 
Moreover, Bangladesh produces more raw materials for the garment industry than Vietnam, which also helps the South Asian nation remain more competitive, he added.
 
Vietnam heavily relies on other countries, particularly China, for its raw material, so any delay in delivery by foreign suppliers affects garment production. As a result, sometimes, garment exporters also miss their export schedule, affecting their prestige and even losing customers.
 
However, it is not easy to reduce dependence on import of raw material, as several textile and dyeing businesses were refused licenses because authorities are afraid of environment pollution, said Le Quang Hung, chairman of the Saigon Garment Production and Commerce JSC.
 
Another expert was of the opinion that Vietnam garment sector is facing competition from Cambodia, too, as the country enjoys duty-free facility for exports to the US, while Vietnamese clothing are subject to an export tax of around 17 percent.
 

Fibre2fashion News Desk - India

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