Vietnamese garment producers face order shortage in H1

July 23, 2019 - Vietnam

Vietnamese garment manufacturers have so far received less order than 2018 and the shortage of orders is becoming more common, according to the Vietnam Textile and Apparel Association (VITAS), whose vice president Truong Van Cam recently said the number of orders in the first half of 2019 was just equivalent to 70 per cent of the figure in the same period last year.

As the apparel industry grew by less than 9 per cent by the end of June, it must expand 11-12 per cent for the remaining months to fulfill the goal of earning $40 billion from exports this year, according to a news agency report.

Other major textile and garment producers like India and Indonesia are facing a similar situation as demands from customers are getting higher while pressure to cut cost and higher trade barriers, such as import duties or quality inspection, are also taking a toll on them, Cam explained.

Foreign countries have taken several measures to support their exporters, for example, cutting corporate income tax and duties on imported apparel materials and devaluing their currencies, making it tougher for Vietnamese enterprises to compete with, Cam added. He hoped that the situation would improve in the last six months as it is normally the time for high-value orders for products like jackets, suits and winter sportswear.

To attract more orders, local producers must strictly comply with requirements of buyers and protect workers’ rights, Nguyen Thi Hong Anh, VITAS vice secretary general, said.

According to the VITAS, the textile and garment industry earned approximately $18 billion from exports in the first half of 2019, up 8.61 per cent year on year. The figure included $14.02 billion worth of clothing and $1.02 billion worth of fabrics, up 8.71 per cent and 29.9 per cent respectively.

The United States remained the biggest buyer, importing $7.22 billion worth of textile and garment products, up 12.84 per cent from a year earlier. It was followed by member states of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) ($2.57 billion, up 11.13 per cent), the European Union ($2.05 billion, up 10.46 per cent), and South Korea ($1.37 billion, up 5.59 per cent). (DS)