Vietnamese garment sector make efforts to remodel its production methods

Vietnam one of the world’s largest garment producers to maintain its status is making all efforts to remodel its production methods. The move comes in the light of advantages offered by the Trans Pacific Partnership (TPP) and other free trade agreements that the country has entered into with regional trade blocs around the world.

According to Le Tien Truong, Vietnam Textile and Garment Group (Vinatex) General Director after years of manufacturing, Vietnamese enterprises have gained much experience in manufacturing, management and labour.

This wealth of experience serves as a foundation for enterprises to shift to FOB (freight on board) and original design manufacturer (ODM) model.

Vinatex is determined to apply as soon as possible the ODM model, which will allow the company to define the chain linkage of dye-textile-garment and improve its business effectiveness index.

The group will review and improve operations to meet production targets for the domestic and international markets.

Nguyen Xuan Duong, Management Board Chairman of Hung Yen Garment Corporation Joint Stock Company, said that to be able to produce with the ODM model, concerned sectors such as textiles, garments and dyes need to develop at the same time.

However, the garment and textile sector is weak in the areas of product development, marketing and chain linkage. To develop the ODM model, businesses need to overcome these weaknesses, especially marketing, as well as clarify targets for the sector and draft a material industry development plan.

According to Dang Phuong Dung, General Secretary of the Vietnam Textile and Apparel Association (VITAS), in spite of the high export turnover, the added value remained modest. This was attributed to sectoral dependence on imported materials, as the country is able to only provide 1.0 per cent of demand for cotton and 20.2 per cent of demand for textiles.

As per the Ministry of Industry and Trade (MoIT), Vietnamese garments exports in the first nine months of the year has reached US$18 billion, a 19-per cent year-on-year increase, while its garment imports has touched US$11 billion. As a result, the sector achieved a US$6.2 billion trade surplus.