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

Courtesy: UPM Raflatac

Apparel/Garments | On 17th Jan 2017

New residue free textile label adhesive from UPM Raflatac

Producer of self adhesive label materials UPM Raflatac, has...

Courtesy: Authentic Brands Group

Apparel/Garments | On 17th Jan 2017

Teen retailer Aéropostale reopens 500 stores in US

Teen apparel retailer Aéropostale has reopened 500 stores in the US,...

Courtesy: Centric Software

Information Technology | On 17th Jan 2017

Centric releases version 6.0 of PLM solution

Centric Software, the leading PLM solution for fashion, retail,...

Interviews View All

Yashiki Gumber
Sahiba Fabrics

Fabric does not restrict us from fashion trends

Sachin Sharma
Gem Enviro Management Pvt Ltd

There are no significant differences between virgin yarn and PET recycled...

Karel Williams
Dow Microbial Control

'Silvadur is most rapidly adopted in areas where hygiene-conscious and...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Iago Castro Asensio
RCfil Distribuciones S.L.

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

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

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
January 2017

January 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