Home / Knowledge / News / Apparel/Garments / Labor and financial crisis threatens garment exports
Labor and financial crisis threatens garment exports
17
Jul '08
The garment industry of Vietnam still needs to export goods worth US $5.3 billion in the second half of this year to meet its annual target of $9.5 billion. However, in the midst of burgeoning orders and volatile market situation, the sector is facing serious capital and labor crunch.

Mr Vu Duc Giang, General Director of Vietnam Textile and Garment Group (Vinatex) has also observed that apparel companies are facing a lot of hurdles including high interest rates, rising cost of production and shortage of workers.

Despite huge orders being placed for Vietnamese garments, enterprises are failing to meet the international demand because of a surmounting financial crisis which cannot be resolved even with bank loans because of high interest rates.

Industrial sources informed Fibre2fashion that the situation was worse for enterprises making FOB contract for exports since they do not have enough capital for importing materials.

To add to the already deteriorating conditions, there is a rise in the number of workers leaving their jobs which is creating another pressure on the entrepreneurs. Although most of the garment companies have increased the salary and allowances of labors by 15-20 percent, it is difficult to ascertain if the situation would get any better.

Experts believe that unless the Government steps in to help the garment companies access loans at a reasonable rate, it is unlikely to achieve the export target of $9.5 billion.

However, Mr Le Quoc An, Chairman of Vietnam Textile and Apparel Association (VITAS) is optimistic that manufacturers, especially exporters, would be extended full support to overcome the existing difficulties.

While members of VITAS has recommended that the VND lending rates should be cut to 15 percent and foreign currency lending interests rates to 8 percent, Vinatex proposed slashing fibre import tax rate from 3 to 0 percent as domestic supplies cannot meet the ever growing demand.

Additionally, enterprises are also trying their level best to retain workers and are considering the task of improving their standards of living and giving it top priority as a long term development plan. Most important, there is a need to create an atmosphere where workers and employers can reach a level of understanding.

Fibre2fashion News Desk - Vietnam

Must ReadView All

Textiles | On 25th Mar 2017

GST to positively impact retail value chain: CBRE

The implementation of the Goods and Services Tax (GST) bill in India...

Textiles | On 25th Mar 2017

MEGlobal to build first ever US MEG plant

Monoethylene glycol (MEG) producer MEGlobal plans to construct a new...

Courtesy: Ulster Carpet

Textiles | On 25th Mar 2017

Ulster Carpets acquires Griffith Textile Machines

Northern Ireland based manufacturer of carpets, Ulster Carpets said...

Interviews View All

Smita Murarka
Amanté

‘There is huge demand in the Indian lingerie market for non-wired styles.’

C Kamatchisundaram
Voltas

ITME is an occasion not only to receive new leads but also to work on...

Smarth Bansal
Colorjet India Limited

We would like to venture more companies into the Indian market

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
March 2017

March 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search