Vietnam’s textile industry is in trouble again due to the new wave of epidemic
The fourth wave of the COVID-19 epidemic has recently hit Vietnam’s economy again, putting the newly recovered textile industry into trouble again.
According to VuDucGiang, Chairman of the Vietnam Textile and Apparel Association (VITAS), Vietnam’s textile exports in the first half of 2021 were US$18.79 billion, compared with the same period in 2020 and 2019 Growth rates were 21.27% and 4.23% respectively. Regarding the export and production of the textile industry in the second half of 2021, Chairman Vu believes that Vietnamese textile enterprises will face severe challenges, including unsolved problems in 2020 and the first half of 2021, and the continued spread of a new wave of epidemics, hitting key production areas in South Vietnam.
Although the Vietnamese textile industry has received orders in the third quarter, they have obtained them at lower prices. Until now, companies have struggled to strike a balance between production activities, ensuring employee employment, and generating profits. Requiring brand customers to delay payment for 2-3 months or even 6 months exceeds corporate financial plans. The difficulty for operators is that if they do not accept the conditions proposed by customers, they will lose orders; if they accept, they will encounter difficulties in capital turnover.
On the other hand, due to the epidemic, 97% of textile companies in South Vietnam have suspended production, and a small number of remaining companies have agreed to implement 3 local epidemic prevention measures to maintain production. . Chairman Wu said that according to the information received by the association, in the face of the huge risks brought by the increasingly complex epidemic, some brand customers have moved their orders out of Vietnam, and there is even a tendency to transfer them back to China.
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