Vietnam garment sector likely to fail in achieving $31b export target

Vietnam garment and textile sector due to order shortage likely to fail in achieving its export turnover target of US$31 billion this year which will be decade’s lowest growth level of 4.3 percent. Therefore, Truong Van Cam, deputy chairman of Viet Nam Textile and Apparel Association (VITAS) want to lower its export target to $29 billion.

Cam said that domestic garment and textile firms should discuss with each other the difficulties in competing with foreign companies. They have also urged their member companies to avoid internal competition while enhancing co-operation to share orders. The local firms should strive to reach the export turnover of around $2.66 billion a month in the year-end months to meet the whole year’s target.

In fact, the sector will need basic and synchronous investments to not only overcome difficulties and ensure sustainable and fast growth.

Hung Yen Garment Joint Stock Corporation has 13 businesses with more than 14,000 labourers. The corporation targeted an export turnover of $280 million, but by the end of last month had only reached $160 million, posting a 10-per cent drop compared to last year.

Nguyen Xuan Duong, chairman of the corporation’s management board, said that his firm had enough orders for this month, but in previous years the number of contracts at this time was usually enough for production until the end of the year.

In addition, the exchange rate and salary policies have made prices higher 2-4 percent higher than those of textiles from other countries. The increasing production costs, limited orders and pressure by exporters to reduce selling prices have placed a burden on their corporation, Duong added.

Further, the exchange rate of the Vietnamese dong had not been adjusted for years, while the currencies of other countries were devalued by 18-20 percent, making their products 20 percent cheaper than Vietnamese ones.

Importers want them to lower selling prices by 18-20 percent, even 30 percent. However, several still found partners from other countries and have also received small orders until the end of the third quarter of the year.

According Hoang Ve Dung, chairman of the Duc Giang Garment and Textile Corporation’s management board, obtaining orders had become more complicated, demanding higher quality and advancing delivery deadlines.

In the first eight months of the year, export turnover of garment and textile products reached $18.7 billion, meeting 64.5 per cent of the annual target.