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Repositioning Textile Industry

According to Vietnam Textile Association (VITA S)’s record, in quarter 1 of 2017 had the turnover of 6.84 billion USD (11.2% more than the same period last year. This record took away the worry of crisis of the industry in 2016


​2016 was the toughest year of the decade for many textile enterprises; it made the enterprises worry that they could not reach the target set for 2017.

 

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Exported textile production in Dong Tien Jsc
 
* We are losing our advantages.

China, India, Vietnam, Bangladesh, Turkey, Indonesia and Cambodia are currently the top countries in exported textile products

These countries are being seen as the world’s textile factories. At the current Seminar: “Vietnam Textile with the Rules of Origin in Europe – Vietnam Free Trade Agreement” held in Ho Chi Minh City; economy experts pointed out the disadvantages that Vietnam textile industry is facing; in which, lacking of cheap labour force is the most serious issue.

Accordng to the experts’ analysis; Bangladesh, Myanmar, Cambodia, Laos attracted more textile orders than Vietnam since they receive the tax incense of 0% when export to America, the EU, Japan. Meanwhile, Vietnam textile products have to pay around 10% of export tax to the EU.

The International Council showed that cheap labour force was no longer Vietnam textile enterprises’ advantages. Comparing with Bangladesh – the closest rank to Vietnam; it obviously showed that the average income of a Vietnamese textile worker was about $200/month, when a Bangladeshi labour earned nearly $70. Moreover, Bangladesh textile had the total labour of 4.3 million while the total number of textile workers in Vietnam were only 2.5 million. With all those advantages, in the current years, Bangladesh’s export textile turnover had got closer to the Vietnam’s. In 2016, Vietnam export textile turnover was 28 billion VND and the number was 26 billion for Bangladesh.

*Focusing on the quality

Facing such challenges, Vietnamese enterprise are also finding their place. In order to improve the situation, the field experts commented that there was no other way than raising the labour productivity and efficiency to reduce the manufacturing time; well implementing the risk management and maintaining brand’s reputation.

According to Mr. Truong Van Cam – Deputy Chairman and General Secretary of Vietnam Textile Association, the enterprises shall move from outsourcing manufacturing to other methods that can bring higher value to increase competitiveness. At the same time, the enterprises shall look for direct customers, reduce intermediate trading to reduce cost to improve labour force.

Sharing the same idea, Mr. Nguyen Van Hoang – General Deputy Director of Dong Tien Jsc (Tan Tien, Bien Hoa) said that after the rough year of 2016, the reputable textile companies still maintained their orders stability; such as Dong Tien Jsc, which still reached the target of 1,400 billion VND. Mr Hoang also agree that facing the pricing pressure, in order to survive, the enterprises should improve their capacities. “Each country has their own advantages, take it effectively and they will succeed. China’s advantages are from the materials; Bangladesh, Myanmar, Cambodia have the benefits from their young labour force and Vietnam has the strength in labour skill; thus, we should focus on making higher quality products to raise our competitiveness”. Said Mr. Hoang.

According to Mr. Le Tien Truong – General Director of Vietnam Textile Corporation, there are still ways to balance the textile export. The industry will focus on the quality more than quantity to increase competitiveness. In 2017, Vietnam textile industry set the export value target of over 30 billion USD.

Quoc Khanh
 

 

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