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Vietnam’s textile industry surrounded by difficulties

Monday 27, 07 2020
The Covid-19 epidemic has not been under control, seriously affecting Vietnam's textile and garment industry which has a large export proportion in Vietnam’s export structure.
Vietnam’s textile industry surrounded by difficulties

It is forecasted that in the last 6 months of 2020, export turnover of this industry will decrease by 30-40% compared to the previous year.

Real challenge is ahead

Mr. Le Tien Truong - General Director of Vietnam National Textile and Garment Group (Vinatex) said: "The real challenge is just ahead".

According to Le Tien Truong, predictions for difficulties faced by the textile industry in the first 6 months of this year due to the impact of Covid-19 were completely accurate. However, during this period, the textile and garment industry still had orders which were masks and PPE products (personal protective equipment).

As a result, the Group's branches and subsidiaries have not suffered from a serious shortage of jobs, and still have good liquidity because sales of masks and PPEs were very positive. In addition, the price for these products was relatively high when Covid-19 broke out.

Vietnam’s textile industry surrounded by difficulties

“However, in the last 6 months of the year, the market and demand for PPE are shrinking very fast. There have been signs that this demand will return to normal from in 2020. In Vietnam, meanwhile, the mass production of this product in the recent period has led to a greater supply than demand.

Price has reached the limit of costs. PPE products are no longer easy to sell. It is not realistic to rely on PPE demand in the last 6 months of the year.” said Le Tien Truong. In addition, that it is difficult to predict when the pandemic will end will weaken demands for shopping of people.

“The reduction in aggregate demand will make the competition among textile and apparel manufacturers become more intense. Buyer's pressure is greater. Especially in the first 6 months of the year, because Vietnam did not stop production as China or Bangladesh because of social distancing, the market share of Vietnam’s textile and garment in the US and EU has increased. The fight to regain market share will be fierce in the near future” - General Director of Vinatex said.

It is believed that in the last 6 months, export turnover of this industry will decrease by 30-40% compared to the previous year. Selling prices will also be under pressure and there will be fewer jobs.
Seeking for orders

Ms. Pham Thi Phuong Hoa, General Director of Hung Yen Garment Corporation - Joint Stock Company said that the company still maintains a stable production activity and can divide jobs for employees, but their income has declined.

"Currently, we have orders until the end of the third quarter and are looking for orders for the fourth quarter" - General Director of Hung Yen Garment Corporation - Joint Stock Company said.

Having more optimistic forecasts about the market situation in the last months of the year, Mr. Nguyen Van Mieng, General Director of Nam Dinh Textile Garment Joint Stock Corporation said that the proportion of yarn exported has decrease from 65% to 45%, and this business has made up that gap by boosting exploitation of the domestic market.

Regarding fabric, Nam Dinh Textile Garment is currently producing about 1.2 million meters per month, and it is likely that the production output of this item will be reduced by about 230-300,000 meters in the third quarter of this year. Currently, the company is expanding its market to Northern provinces.

“In general, yarns, fabrics, and dyes of Nam Dinh Textile Garment are expected to experience growth from now to the end of the year. We may be very close to the plan, despite suffering losses in the first 6 months of the year.” said Nguyen Van Mieng.

According to Vinatex's report, due to the negative impact of Covid-19, in the first 6 months of this year, the total consolidated revenue of the group is estimated to decrease by about 15% compared to the same period in 2019 while consolidated profit is estimated to decrease by 25% compared to the same period last year. This loss is indeed lower than forecast.

>> 
Textile & Garment industry to face the 4.0 industrial revolution​

Source: anninhthudo

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