In 2019, Vietnam’s textile industry was greatly affected by the world economic downturn and the Sino-US trade conflict. Although still maintaining good growth, with total exports (exports) reaching US$39 billion, it is still US$1 billion short of the annual export target of US$40 billion.
Produced in Dejiang Garment Co., Ltd. export product. Photo: Hai Linh
Loss of US$1 billion
According to Chairman of Vietnam Textile and Apparel Association (Vitas) Vu Duc Giang said that the annual textile and clothing import turnover in 2019 was estimated at US$22.38 billion, an increase of 2.21%, and the export import value was US$19.26 billion, an increase of 4.96%. The domestic added value (trade surplus) of exported textiles and clothing reached US$19.73 billion, an increase of 10.19%; the trade surplus was US$16.62 billion, an increase of US$2.25 billion. The United States remains the largest market, with an estimated export value of US$15.2 billion, accounting for 38.97%; the European Union reached US$4.4 billion, accounting for 11.28%. China reached US$4.25 billion, accounting for 10.9%…”
In 2019, Vietnam’s textile and garment industry was greatly affected by the world economic downturn, but still maintained growth, with total exports reaching US$39 billion, This is an encouraging thing.” – Mr. Vu Duc Giang said.
As for the unfulfilled goals, the report of the Ministry of Industry and Trade pointed out that according to legal provisions, by the end of the fourth quarter of last year, many textile and clothing export companies had orders for the next year, but this year’s orders were even higher. many. This is down compared to 2018. Currently, orders for many new businesses only account for 80% of the same period last year. Even many companies do not receive long-term orders, but short-term orders on a monthly basis, and the longest ones are quarterly orders.
In addition, textile companies are also facing many difficulties due to competition from major textile countries such as China, India, and Bangladesh. In addition, many countries are committed to supporting the textile industry. The inclusion of emerging countries in Africa has resulted in a dramatic increase in the number of manufacturers, sharing of orders, and relocation of orders to other countries.
Solving planning issues
Pham Xuan Hong, chairman of the Ho Chi Minh City Textile and Garment Association, suggested that in order to develop textile and apparel Industry must form a raw material supply chain. Although there are policies, they are not fully implemented, growth is slow, processing is the main factor, foreign dependence is large, and even less than 30% of domestic raw materials and accessories… Duc Giang said that the challenges of the textile industry are related to the global supply chain vision of a sustainable development strategy. For example, the current textile industry imports more than 50% of its raw materials from abroad. The textile and apparel industry cannot solve this problem, but it must have strategic positioning by government, state and local regulatory agencies.
In order to enjoy preferential tax rates, all free trade agreements have very clear rules of origin. “Vietnamese textile and apparel export companies that purchase fabrics in CPTPP countries and then export garments to the region will enjoy preferential tariffs, but if they import fabrics from China, the exported products will not receive incentives.” This person is an example. In addition, difficulties arise from shifting the investment structure from big cities to rural, remote and remote areas, and companies still must sign labor contracts, pay insurance premiums, social security and regional minimum wages when using untrained workers, as stipulated by law.
The person in charge of Vitas said that to remove him, the key is to promulgate the textile and garment industry development plan as soon as possible. Without rapid sectoral planning and establishment of regional and global supply chain platforms, the risk of loss is huge.
Currently, Vitas has submitted a report to the Ministry of Industry and Trade (Ministry of Industry and Trade), as well as a lot of work to launch a plan for the Vietnamese textile and garment industry in the new era as soon as possible. In the plan, it must determine Vietnam’s foothold and competitive goals on the world textile “map”. At the same time, clearly defining the government’s role in local land funding planning strategies to develop industrial parks that meet environmental standards would be enough to attract investors to invest in this area. Weaving, dyeing… solved the problem of shortage of raw materials and supply. “The Ministry of Industry is finalizing the plan.
Despite many difficulties, Vietnam currently ranks third in the world market in textile and clothing exports, creating jobs for more than 2 million workers has created employment opportunities and continues to create about 200,000 new jobs every year. Vietnam’s textile and garment industry is also very active in researching, investing and applying 4.0 technologies in production, paving the way for Vietnam’s rapid integration into the important and landmark industrial revolution. Made a contribution.</p
