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Vietnam’s textile and footwear industries are in recovery

Vietnam’s textile and footwear industries are in recovery

Wednesday 16, 12 2020
Textile and footwear industries are among those that have been negatively affected by the Covid-19 epidemic. However, in the last months of the year, the growth of both industries has been positive when the epidemic was well controlled in Vietnam.

Seizing opportunities in challenges


According to the General Statistics Office, the index of industrial production (IIP) of the textile industry for the first 11 months of 2020 decreased by 0.4% over the same period last year, of which the IIP in September decreased by 6.3%; in October decreased by 5% and in November, it rose by 1.3%. Similarly, the decrease in IIP of the garment manufacturing has been narrowed down with an increase of 3.6% in November.
Seizing opportunities in challenges
This result is due to the fact that textile and garment enterprises have sought to seize opportunities in challenges, quickly adapting to the new situation such as manufacturing protective products for the health sector during the epidemics. In particular, natural textile production in November 2020 increased strongly by 24.2% over the same period last year; the output of man-made fibers increased by 3.3%, significantly recovering from the 9.6% decline in October and 5.2% in September.

Export turnover of textiles and garments reached US $ 26.73 billion for the first eleven months of 2020, accounting for 10.5% of the total export turnover. Though the export turnover of this industry decreased by 10.5% over the same period last year, it is still better than that of many other countries. This also shows great efforts made by the textile and garment industry in the context of a 25% decrease in world textile and apparel demand.

According to experts, textile and garment enterprises need to have to change their production and business methods to cope with challenges. The Vietnam - EU Free Trade Agreement (EVFTA) will be a great opportunity to expand export markets. Enterprises need to take advantage of the no-order period to organize training courses to improve workers' skills to increase labor productivity. At the same time, it is also necessary for them to diversify export markets instead of focusing on just a few markets.

Application of technology to the leather and footwear industry


According to the General Statistics Office, similar to other industries, the leather and footwear industry has faced many difficulties due to the impacts of the Covid-19 epidemic. However, the fact that Vietnam has put the epidemic under good control and the effective EVFTA will help the footwear industry to grow again.

Although the leather and footwear industry was strongly affected by the Covid-19 epidemic in the second quarter of 2020, the IIP of the industry has improved when the decrease in IIP between months has been narrowed. 

The EU region has been a major import market for Vietnam's footwear products for many years, second only to the US market. The EVFTA has made positive changes to Vietnam's footwear exports, which is the driving force for the growth of the footwear and handbag industry in the last months of 2020 and 2021.

The total export turnover of footwear in November reached US $ 1.4 billion, an increase of 0.1% from the previous month. Generally, for the first 11 months of the year, it reached US $ 14.93 billion, decreasing by 9.8% compared to the same period last year. Manufacturing enterprises have difficulties from both supply and demand.
Application of technology to the leather and footwear industry
Currently, although the market cannot fully recover, the export turnover of shoes, shoes and bags is expected to increase again when free trade agreements are effective. Consumer demand for footwear products in European and American countries will increase in the New Year 2021.

To achieve highest business results in the context of the complicated Covid-19, it is necessary for businesses in general and those in the footwear industry in particular to promote the application of technology, and lower costs to increase the competitiveness of products.

Source: VCCI

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