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Slowdown leads to closure of apparel manufacturing units
07
Feb '09
The textile and garment sector across the globe is passing through one of its worst phases in the last few years. The slowdown is creating havoc, leading to closures and mass un-employment for hundreds of thousands of workers.

The burgeoning garment industry of Vietnam, which till last year was clocking awesome growth rates, is no exception. Since the unfolding of the crisis in the last five months, many garment units are facing the possibility of closures.

Even the local Tet festival did not encourage sales, though off course, the domestic apparel manufacturers are yet to find a firm footing in the local markets, which is swamped by products of Chinese origin.

Domestic apparel sales fell by 6 percent in January 2009, when compared to the same period of 2008, despite the Tet festival. The Chinese have been able to corner the domestic market shares on the strength of their prices as well as designs.

The domestic manufactures have been found lacking on both fronts, but now some units are slowly coming around to the fact and are slowly establishing their networks in a bid to counter falling global clothing sales.

Many foreign invested apparel manufacturing companies have either partially or fully shut down their operations across many provinces of Vietnam, which has become a matter of concern for local authorities as it is creating un-employment in thousands.

To add to their difficulty, per unit value realizations are also going downhill and most of the units are surviving on razor thin margins in a bid to survive through the storm. The other few units who are not able to weather the gale are simply folding up.

Association bodies have suggested to the government to create a special fund for those workers whose units are on the verge of closing or have closed down, by drawing 1 percent of the export revenue of the garment industry, to help them in this period of crisis.

Experts are warning of worse days ahead in the months to come and have advised garment companies to become more competitive and also look for more diversified markets, to survive through this worst depressing period in the history of the sector.

Fibre2fashion News Desk - India

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