Home / Knowledge / News / Textiles / 'Only low-end Chinese textile sector may opt for Vietnam'
'Only low-end Chinese textile sector may opt for Vietnam'
16
Apr '14
As costs of labour are increasing in China, it is widely anticipated that textile companies would relocate to Southeast Asia, especially Vietnam, but it would not be prudent for high-end product manufacturing companies to do so, and only low-end production firms may opt to relocate, according to industry experts.
 
In recent years, the average annual wage increase in China has remained between 15 percent and 20 percent, and China has lost its earlier labour cost advantage to countries like Vietnam, where wages are about one-third of those currently existing in the Chinese textile and garment industry.
 
Textile companies are eyeing Southeast Asia for relocation, but Vietnam is their pick, as it has relative advantages compared to other countries like Cambodia. In addition to lower labour costs, Vietnam also has an advantage of power supply at lower rates, which help reduce the cost of production and improve gross profit margin.
 
In China, including the amount paid towards domestic human social security, welfare, etc, the domestic wages now stand at more than 40,000 yuan per year, or over 3,000 yuan a month. In comparison, the wage in Vietnam is only one-third, while the cost of electricity in that country is only half of the existing tariff in China.
 
Vietnam also has an advantage in terms of raw material supply and shipping, compared to Cambodia, which mostly produces garments on a single production line, which is more suitable for direct processing of fabrics. However, for industries that require more complex production Vietnam would be better suited as it has more complete supporting facilities. Vietnam also has advantage of lower transportation costs. 
 
However, low quality of talent is one of the worries for the Chinese textile enterprises planning to relocate to that country, according to experts. In addition, management of the business would remain difficult due to language and cultural differences.
 
Hence, only manufacturers of low-cost textiles may opt for relocation to Vietnam, aver experts.
 

Fibre2fashion News Desk - India

Must ReadView All

Courtesy: Christian Dior

Fashion | On 25th Apr 2017

LVMH to acquire Christian Dior Couture for €6.5bn

LVMH and Christian Dior, which holds directly and indirectly 41 per...

Information Technology | On 25th Apr 2017

Self-repairing fabrics to be the future of fashion

It is the era of smart. Intelligent materials like self-repairing...

Textiles | On 25th Apr 2017

Indonesia revitalising textile sector

With exports of textile and textile products rising in Indonesia, the ...

Interviews View All

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Sunil Kumar Sharma
Loknayak JPNSSSG Ltd

'The blend of cotton–linen yarn has high demand in the domestic and...

Silke Brand-Kirsch
Schlegel und Partner

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

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

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
April 2017

April 2017

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

SUBSCRIBE


Browse Our Archives

GO


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