The domestic garment and textile firms in Vietnam are optimistic about the coming year 2011, as majority of these firms have sufficient export orders to keep them busy till first half of next year.
Saigon 3 Garment Joint Stock Company has inked deals for supplying Japanese firms with millions of jeans costing around US $50 million during the first two quarters of next year. Thus, the company registered a rise of 20 percent in the value as well as volume of export orders for first two quarters of 2011 as over the corresponding period last year.
Le Thi Thanh, Deputy General Director of Phuong Dong Garment Joint Stock Company, too, revealed that his company has inked contracts for exporting five million garment products by May 31, 2011. He also mentioned that the firm, before booking further orders, should consider if it really has the capacity to fulfil those contracts.
There has also been a rise of over 15 percent in the export contracts that other big garment and textile firms like Thang Loi, Viet Tien, Gia Dinh, Nha Be, Viet Thang and Phong Phu inked for the year 2011.
The private garment firms are no longer apprehensive about the dearth of orders as it used to happen during last few years, due to the sufficient inflow of product orders.
Like for instance, Minh Chau Garment Company, has already contracted to manufacture 200,000 garment products by close of the first quarter of 2011, thus ensuring employment for over 200 persons during the period, the company's Director Nguyen Thi My Linh said.
Pham Xuan Hong, Deputy Chairman of the Viet Nam Textile and Apparel Association (Vitas) said that the signing of long-term contracts for exports by garment firms have its own pros and cons.
On one hand, these long-term contracts provide the firm a platform for devising a steady production and trading strategy as well as raise the job security of workers, but on the other hand, the firms may be at disadvantage if the export prices rise. Thus, it is advisable for the firms to enter into such long-term export contracts that are specific about the quantity of exports and are also flexible to alter the export prices for every quarter depending on the market rate fluctuations.
Vu Duc Giang, Vitas Chairman, stated that the garment sector is likely to generate revenues worth over $11 billion from exports this year. While it is estimated to earn around $4.5 billion even after deducting the cost of import of raw materials from the gross profits, which is 18 percent above the revenues generated last year.
Fibre2fashion News Desk - India
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