Weak raw-material supply is challenging the domestic garment industry, according to the Viet Nam Textile and Apparel Association.
The association reported that each year, Vietnamese garment companies needed 6 billion metres of cloth, of which 5.2 billion metres had to be imported.
About 70 per cent of other materials were also imported, the association added.
Director of Sai Gon Garment 3 Pham Xuan Hong said that his company imported 70 per cent of cloth to meet production demand.
Bui The Kich, director of another large raw material importer Dong Nai Garment Joint Stock Company, said that only 30 per cent of domestic cloth and 50 per cent of other domestic materials were used by his company.
On top of this, the quality of Vietnamese cloth did not meet international standards, and all machinery and chemicals were also imported.
Vietnamese companies were struggling to produce high-end products, not to mention their production capacity was not big enough to take in large orders from overseas, Hong said.
Unskilled workers and weak co-operation among companies was also challenging the industry.
These shortcomings had prevented companies from competing with their rivals from other countries.
To solve the problem, a professional material supply chain must be established, experts said.
The association said that domestic distribution systems should be widened in the future, and the industry should also focus on developing Vietnamese garment trademarks.
The industry would try to expand its market share in neighbouring countries including Laos, Cambodia and China, the association said.
In recent years, garments and textiles have been one of Viet Nam's key exports, with total turnover of about US$14 billion per year. However, this figure accounted for only 3 per cent of the global figure.
The sector has targeted a $15 billion export turnover in 2012, a surge of 12 per cent against last year's figure.