Home / Knowledge / News / Apparel/Garments / Profits fall as apparel exports rise
Profits fall as apparel exports rise
16
Jul '10
While the Vietnam Textile and Apparel Association (VITAS) has assured that they are nearing their goal of attaining $10.5 billion in export revenue for 2010, their profits are declining.

An owner of a garment manufacturing firm, said that, during the first six months of the year, net export revenue touched 281 billion dong, but profits were registered at only 15 billion dong or five percent of the revenue.

More so, this garment firm owner also mentioned that, apparel firms have received more orders in 2010 as compared to 2009, but the profits are laid back, due to rising cost of production. Currently, this firm's worker's wages are 3 million dong per month, a raise from 2.5 million per month, which was paid in 2009.

More over, apparel firms are finding it difficult to access bank loans, as interest rates have risen; because the State does not have any more grant programs. Electricity and freight costs have also escalated by 15 percent. Apparel firm owners feel that rising export prices by 10-15 percent are not huge enough to counterbalance the rising cost of production by 25 percent.

An industry expert revealed that, currently, apparel firm's profits are extremely low, as only about 20 percent of the clothing firms can procure a profit of five percent of their earnings, whereas other firms can attain merely three percent. On the flip side, smaller firms don't even think about profits, they are merely trying to sustain production in order to retain their labourer's jobs.

But, it is also turning difficult for enterprises to increase exports, especially when local sources are unable to provide raw materials and accessories to clothing firms. For instance, an apparel firm owner said that, his order book was full to manufacture and sell goods, but failing to find a fabric supplier; he had to limit himself to the CMT (cut, make and trim) mode to manufacture apparels.

Industry experts reveal that, Vietnamese firms cannot export goods under FOB mode (definite selling products) in the real sense. More over, none of the firms can take over all stages of production i.e. from designing to creating finished good and then also sell them to earn 30 profits.

Vietnamese firms only manufacture goods, which are on the basis of their client's ideas and instructions. Hence, these firms earn lower profits, probably equal to the outsourcing price in addition to several percent of management fee and material purchases.

Currently, Vietnamese firms are receiving orders from the middle-group companies based in Taiwan, Japan and South Korea, who ensure that these firms get very low profits.

Fibre2Fashion News Desk - India


Must ReadView All

Pressure on  Indian textiles exporters to ease by Q3: ICRA

Textiles | On 17th Oct 2017

Pressure on Indian textiles exporters to ease by Q3: ICRA

Pressures on the profit and debt levels of textiles exporters is...

S Korean fashion brands expand overseas amid slump at home

Fashion | On 17th Oct 2017

S Korean fashion brands expand overseas amid slump at home

South Korean fashion firms are keen on tapping into overseas markets...

GMAC urges Cambodia to push fabric-forward rule in RCEP

Apparel/Garments | On 17th Oct 2017

GMAC urges Cambodia to push fabric-forward rule in RCEP

Representatives from the Garment Manufacturers Association of...

Interviews View All

Abhimanyu Singh Rathore & Barbara Anna Kosiorek
Kannbar

‘Blending cultures is the true beauty of fashion, where one’s imagination...

Pinkesh Jain
Everflow Petrofils Ltd

‘An innovative technology which India needs desperately is the...

Pratik Bachkaniwala
Palod Himson Machines

Fabric processing machines are picking up

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Abhishek Pachauri

Reckon Industries adapts latest systems for manufacturing from designing...

Rikesh Mistry

Jupiter Comtex Pvt Ltd, established in 1973, started its textile machinery ...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Kerem Durdag
Biovation II LLC

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

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Ritu Kumar
Label Ritu Kumar

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

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

October 2017

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
76.9%
No
13.8%
Skip
9.2%

Total Votes: 65

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.5%
No
27.7%
Skip
10.8%

Total Votes: 65

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
84.6%
No
10.8%
Skip
4.6%

Total Votes: 65

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
73.8%
No
12.3%
Skip
13.8%

Total Votes: 65


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search