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Vietnam garment industry struggles for survival

06
Jun '12
Apparel and textile manufacturers in Vietnam are struggling to sustain their business in the midst of financial crisis in its traditional US and European markets, according to industry analysts.

During the initial five months of 2012, Vietnam exported clothing and textiles worth US$ 5.3 billion, showing a rise of 7.7 percent year-on-year, which is less than the 12 percent growth rate set for the current year.

Vietnamese garment and textile industry has set itself an export target of US$ 15 billion for 2012.

Meanwhile, there has also been a decrease in imports of raw materials needed by the apparel and textile industry. This also points to slackening of demand for finished items, as Vietnamese clothing and textile sector depends on imports, to a great extent, for its raw materials.

During the first five months of the current year, Vietnamese cotton imports declined by 2.3 percent in volume and 33.7 percent in value. Imports of fibre dipped by 29.3 percent in value, but rose slightly by 0.2 percent in volume, during the same period.

Some garment companies have not executed any export order for the last few weeks, while some other companies have reported a decrease in export orders during the past few months, according to experts.

They estimate a 30 percent decline in export orders across the Vietnamese apparel and textile sector during the current period, especially due to a significant reduction in imports by Vietnam's traditional European partners.

In such circumstances, various apparel and textile companies in Vietnam are resorting to different measures in order to keep their businesses running. Some of them are taking steps to cut production costs, while others are adjusting prices by taking into account the rising cost of raw materials and the new interest rates.

The situation is especially affecting small companies, as larger firms are constantly exploring new markets, adopting free on board (FOB) shipping and taking measures to boost productivity, analysts said.

Fibre2fashion News Desk - India


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