Despite the fact that the Covid-19 pandemic continues to be complicated and volatile around the world, the garment and textile industry receives good news as orders become abundant once more, allowing domestic businesses to produce before the end of the year.
Nearly ten production lines with over 300 employees were rushing to finish orders of clothes and T-shirts to be shipped to the United States at Fly High Garment Co., Ltd in Go Vap District. Mr. Ly Yung Chinh, Director of Fly High Garment Co., Ltd, stated that the company currently has production orders that will last until the end of the year, with a total output of approximately 2 million pieces.
However, the company has only formally concluded production contracts for around 500,000 products due to business difficulties in obtaining raw materials.
‘Depending on the pandemic’s progress and the availability of raw materials, the company will continue to sign other orders to prevent paying penalties if supplies are not delivered as promised,’ says the company. Mr. Ly Yung Chinh shared his thoughts.
Similarly, Thanh Cong Textile Garment Investment Trading Joint Stock Company reported that it had obtained orders until the end of the second quarter of this year, ensuring a steady flow of work in the months ahead.
Up to now, most enterprises of the Vietnam National Textile and Garment Group (Vinatex) with an export scale of about several hundred million US dollars per year have also had customers for this year, concentrating on products such as knitwear and casual apparel, with a total export turnover of more than $39 billion in the garment and textile industry.
Tran Van Cam, Vice-Chairman of the Vietnam Textile and Apparel Association (Vitas), reported that most garment and textile enterprises had orders until the end of June, with some enterprises, such as Saigon 3 Garment Joint Stock Company, Saigon Garmex, and Viet Tien, having orders until July and August. Traditional economies, such as the United States, Europe, and Japan, continue to be the primary consumers.
“While the number of orders is lower than before the pandemic, the fact that businesses have enough orders to keep production lines running and employees employed is a positive factor in the garment and textile industry’s recovery,” said a Vitas official.
According to Vitas, the garment and textile industry will continue to receive more positive information as a result of the Covid-19 vaccine and the potential to achieve large-scale immunity in the last six months of the year. As a result, garment items in the last six months of the year are usually higher-value autumn-winter clothing.
As a result, the overall growth rate for the year could hit 10%, and Vietnam’s textile and apparel exports could return to pre-pandemic levels, at least a year ahead of many other countries.
Practical assistance to businesses
Despite being positive about the orders, Vitas cautioned that domestic garment and textile businesses will face various challenges. For example, the price of yarn has increased by 25% since December of last year, but the selling price of fabrics has not increased in lockstep.
‘It is estimated that the amount of cotton consumed in the world this year will surpass the harvestable amount by 1 million tonnes,’ says the study. Mr. Le Tien Truong, Chairman of Vinatex, said. Furthermore, pandemic surveillance poses a risk to businesses.
That if they don’t have good control and a pandemic breaks out in their factories, or if the factories are in a pandemic-affected region and have to shut, businesses would experience significant losses. To assist enterprises in stabilising production in the new situation, Vitas has just submitted a proposal to the competent authority to enable the use of resources from unutilized support packages to assist enterprises and employees in more open conditions, and to extend the support period to at least the end of this year. Vitas also petitioned the government and other related agencies to reduce road usage fees, BOT fees, and port infrastructure fees. To avoid the extraordinary overcharging of shipping rates and the continuing shortage of empty containers, the government, ministries, and agencies should intervene.
According to the Vitas delegate, localities should have a common policy in the circulation of products between localities and should not create difficulties for companies.
According to the World Bank’s global garment and textile market forecast, overall global garment and textile demand is projected to rise by 10.1 percent from $594 billion in 2020 to $654 billion in 2021. The textile and apparel import turnover of the United States, which is Vietnam’s largest export market, will increase by 20% to $115 billion over the same timeframe. Domestically, growth will hit 10% this year, with the possibility of returning to the peak export level seen in 2019.
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