According to Japanese media reports, although some international fashion brands have transferred some production lines to Southeast Asian countries, clothing OEMs in countries such as Vietnam, Cambodia and Myanmar still rely on the mainland to supply raw materials. For example, Vietnam’s sewing products use approximately 60% are from mainland China.
Take Uniqlo as an example. The shipment time of its Vietnam foundry has been delayed by about two weeks. It may cause Uniqlo to experience inventory shortages in March, and some of Uniqlo’s new products have been delayed.
Uniqlo and Nike’s Vietnamese supplier Saigon 3 Garment only has enough production raw materials until the end of February.
UNIQLO Vietnam store
UNIQLO’s situation may be worse
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Although Fast Retailing, the owner of the Uniqlo brand, allocates 50% of its clothing factory supplies to China, its main factory in Vietnam also has about 20% of orders. Unfortunately, the Japanese company never imagined that both China and Vietnam would be affected by the epidemic. At the same time, what is not optimistic is that factories in China, Vietnam or other ASEAN countries must rely on China to supply 60% of their raw materials and auxiliary materials. Supply chain and transportation disruptions in China have begun to spread to Southeast Asia.
From a production perspective, its parent company Fast Retailing Group still has half of its production lines in mainland China; Vietnam has nearly 20% of its core sewing factories; Cambodia also has some production lines, and Cambodia also has Countries that rely on China for raw materials may be more affected.
The source of supply must be found, otherwise production can only be stopped
Vietnam《 The Industry and Trade News once named some factories affected by material supply shortages in Vietnam, believing that they must find sources of supply, otherwise they will have to stop production.
Vietnam’s Tenth Textile Factory is a supplier of famous clothing brands Gap and Tommy Hilfiger. 50% of the raw materials in the production process need to be imported from China. Currently, Faced with the dilemma of being unable to deliver a large number of orders on time in March and April.
Saigon No. 3 Textile Joint Stock Company, which specializes in supplying Uniqlo and Nike, currently only has enough raw materials left in inventory to produce in March.
Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, revealed that more than 60% of Cambodia’s garment industry uses mainland raw materials. Although more than half of raw material factories have restarted production, production capacity has not yet been fully restored, so Cambodia’s garment factories may suspend or stop production.
Cambodia’s Ministry of Labor spokesman Heng Sour said last week that if the supply of new raw materials is not in place in March, about 90,000 workers in more than 200 factories will be temporarily laid off. Suspension.
Japanese fashion brands have postponed the release of many new products, including the Uniqlo U jacket to be launched in the spring and summer series, which was originally planned to be launched on February 21. The release plans of other new products have been postponed to March. At the same time, Uniqlo posted information on its Japanese website stating that due to the new coronavirus, brand clothing production and logistics distribution will be delayed.
A spokesman for Fast Retailing sighed: “If the Chinese factory continues to delay the resumption of work, we will suffer greater losses.”
In addition to masks, food, clothing, housing and transportation are still important necessities of life. However, the clothing industry is affected by the epidemic. Once there is a problem in the supply chain, it is just like an infectious disease. Supply chain problems are spreading from other industries. to the textile and apparel industry.
Extended reading:
Vietnam was revealed earlier this month to have temporarily ” 100,000 medical masks from Chinese buyers were intercepted, and 300,000 medical masks originally destined for China were also “stranded” at Da Nang Airport in Vietnam for some reason; some voices pointed out that due to the upgrade of global protection, Vietnam did not rule out that The possibility of taking measures to restrict the export of masks. However, this move may also cause the country’s mask exporters to miss out on huge dividends.
Vietnam originally had a relative advantage as a major textile exporter – according to data from Lang Son, Vietnam, in January this year, the region A total of 4 million masks with a total export value of approximately US$92,000 (approximately 640,000 yuan) have been declared for export to China. In other words, in the face of huge demand from China, Vietnamese exporters could have taken the opportunity to expand exports, but now their plans have come to nothing. What’s even more embarrassing is that not only masks, Vietnam’s textile industry is now facing greater problems.
60% of the materials come from China!
Vietnam’s textile industry is in shortage of materials, and the export target of 299.1 billion has been missed?
According to the Vietnam Textile and Apparel Association (VITAS) on February 25, because the country’s textile industry is highly dependent on China’s raw and auxiliary materials – 55-60% of the supply of raw and auxiliary materials comes from China. , especially clothing raw materials, yarns, fabrics, etc. are mainly imported from China. However, due to the impact of public health emergencies, the resumption of work of some factories in China has been delayed. Therefore, Vietnam’s textile and clothing industry�’s supply chain has been severely affected.
The association pointed out that the current raw and auxiliary materials of local Vietnamese companies are only enough to maintain production until the end of March. If they still cannot obtain enough from major markets such as China in March, With regard to imports, many companies will face serious shortages of raw materials and auxiliary materials starting in April.
According to Vietnamese media reports, due to the closure of Chinese factories due to the epidemic, Vietnamese textile and footwear manufacturers have difficulty importing raw materials from China. Some factory raw material stocks have been used up, and some still have It can last a few weeks, and some can last a few months. The Vietnam Textile and Garment Association recommends that manufacturing companies turn to other sources of imports, but the reality is that apart from China, Vietnamese companies have a very narrow choice of imported raw materials. At present, the raw material inventory of Vietnamese textile enterprises can only be maintained until the end of the first quarter. From the second quarter, some enterprises may be “without rice to cook”. Statistics show that China accounted for 60% of Vietnam’s clothing imports and 55% of fiber imports in 2019.
On the other hand, in order to cope with the shortage of raw and auxiliary materials caused by the delay in resumption of work in Chinese factories, the Vietnam Textile and Garment Association organized a business delegation to India to seek raw and auxiliary materials. When Gao Guoxing, Deputy Minister of Industry and Trade of Vietnam, met with Vadawan, Deputy Minister of Industry and Commerce of India, he also proposed that India consider solving Vietnam’s difficulties in the source of textile materials. But this is only a temporary measure for Vietnam to deal with the delay in resumption of operations in Chinese factories. If Vietnam wants to get rid of its dependence on China for raw materials and auxiliary materials, it will take a long time.
In recent years, due to low labor costs, Vietnam’s textile industry exports in 2018 have exceeded US$36 billion (approximately 253.4 billion yuan), with a growth rate of 16.01%, making it one of the world’s The third largest exporter of textiles and clothing, after China and India.
According to data from the Vietnam Statistics Agency, in January this year, Vietnam’s fabric imports from China were US$950 million, a year-on-year decrease Vietnam’s total textile exports fell by 21% to US$2.6 billion, of which footwear exports fell by 9.7% to US$1.6 billion.
Vietnam’s cotton imports in January 2020 were 81,000 tons, a decrease of 20.4% month-on-month and a year-on-year decrease of 41.8%. The import volume of fiber and yarn was 73,000 tons, a decrease of 27.7% month-on-month and a year-on-year decrease of 21.6%. In January, Vietnam’s yarn export volume was 107,900 tons, a month-on-month decrease of 34.3% and a year-on-year decrease of 22.2%. The export volume of textiles and clothing in that month was US$24.7 billion, a decrease of 16.9% from the previous month and a decrease of 25% from the same period last year.
The slowdown in Vietnam’s textile and apparel exports is mainly affected by the Spring Festival holiday. At the same time, the outbreak of the new coronavirus in China has delayed the resumption of work of Chinese textile companies, and short-term import demand has been significantly reduced. Based on this, Vietnam’s textile industry generally believes that the country’s export target of US$42.5 billion (approximately 299.1 billion yuan) this year will also be difficult to achieve. </p
