Solutions to promote export of textiles and garments

DNHN - In the past 6 months, the total export turnover of textiles and garments reached more than 22.3 billion USD, up 17.7% over the same period last year. However, with the full year target of 43.5 billion USD, the road ahead is still arduous and requires businesses to make more efforts right now, etc.

Contrary to the prosperity in the first half of 2022 when textile and garment orders rushed, businesses worked through the night to keep up with the schedule, now, almost all activities are slowing down when the price of raw materials increases, output in many main export markets are congested. To stabilize production and develop sustainably, textile enterprises need to take flexible measures to adapt to market developments.

Than Duc Viet - General Director of May 10 Corporation shared that the company faced many difficulties due to the negative impact of the COVID-19 pandemic and geopolitical uncertainties in some countries, especially consumption demand fell sharply. It is forecasted that in the coming time, May 10 Corporation will face many difficulties due to the slow growth of the US economy, one of the company's important export markets, leading to a decrease in demand for fashion shopping.

May 10 Corporation will continue to invest in technological equipment and complete the project of expanding Bim Son factory according to green factory standards, improve management level, apply digital transformation technology, and at the same time keep abreast of market developments for timely solutions to promote production and export.

Similarly, Mr. Pham Van Viet - General Director of Viet Thang Jean Co., Ltd (Thu Duc city) also shared: "When the epidemic appeared, textile and garment enterprises faced difficulties in raw material supply; after the If the supply of raw materials is stable, the enterprise will face difficulties in output."

According to statistics, the export of textiles to Europe and the US is decreasing from 30% to 40%; At the same time, the Japanese market will also reduce buying and is expected to drop sharply in the first quarter of 2023. Faced with the above situation, many enterprises in the industry have to cut down their production activities to five sessions/week, possibly to three or four sessions/week in the near future.

Solutions for the textile and garment export industry

Thanks to proactively implementing solutions to stabilize production and business, Hanoi Textile and Garment Joint Stock Company (Hanosimex) of Mr. Ho Le Hung still operates continuously and effectively. Hanosimex's 6-month revenue has exceeded VND 967 billion, up 123% over the same period last year and reaching 54% of the year plan. Profit was more than 68 billion dong, up 302% over the same period and reaching 102% of the year plan.

To achieve a total revenue of more than VND 1,789 billion according to the annual plan, the corporation will focus on expanding markets, finding orders, developing customers and taking advantage of opportunities from new-generation free trade agreements. In addition, the company will strengthen management, strictly control product quality, invest in modern equipment to improve productivity, balance foreign currency sources, interest rates, flexibly use loans to increase competitiveness.

Another unit is Vietnam Textile and Garment Group (Vinatex) with revenue of 10.4 trillion dong, up 39% over the same period, reaching 57.4% of the whole year plan. Mr. Cao Huu Hieu - General Director also said that pre-tax profit reached more than 980 billion dong, up 55.6% over the same period last year and reaching 103% of the year plan. To achieve the above achievement, the Group and its subsidiaries have regularly monitored market developments, improved production management, and took advantage of good cotton prices thanks to early purchasing in 2021.

However, the market has witnessed many adverse signs since March 2022. It is forecasted that Vietnam's textile and garment industry and Vinatex will face many difficulties in the last six months of the year. For example, from the beginning of the year until now, the price of cotton has continuously increased but the price of yarn has not increased accordingly, causing the profit margin of yarn production units to decrease markedly. Cotton prices tend to decrease, leading to low yarn prices; meanwhile, cotton production is purchased during the period when cotton prices are high to keep up with production, leading to a high possibility of losses for the yarn industry. On the other hand, the market situation is also quite bleak with large inventory.

For the garment industry, orders showed signs of slowing down. Most businesses have signed contracts until the end of October due to the drop in world demand after the COVID-19 pandemic, the phenomenon of "overbought" of knitted products in the second half of 2021 and the beginning of 2022, causing market import surplus.

In addition, the shortage of labor and the supply of raw materials, along with high costs, increased production costs, especially logistics and labor costs, also create more difficulties for the garment industry. Therefore, in order to be proactive in production in the direction of breakthroughs and fulfill the set goals, enterprises need to strengthen the link between production and supply chain, form production and business departments in line with industries to jointly support, coordinate and ensure the maximum mobilization of all resources.

It is also necessary to perfect advanced management tools, accelerate digital transformation, and develop human resources to meet production requirements. In addition, it is essential to diversify markets, flexibly convert suitable products and search for input materials in the direction of reducing product costs.

According to Chairman of the Vietnam Textile and Apparel Association (VITAS) - Mr. Vu Duc Giang, 2022 is the year that textile enterprises gradually recover after two years of being heavily affected by the COVID-19 pandemic. Dan Tri Although the first months of production achieved positive results, Vietnam's textile and garment industry continues to face many challenges. Some key export markets are at risk of decline. Important trading partners of Vietnam such as China, Japan, and Taiwan (China) are still applying strict anti-epidemic measures, significantly affecting the supply chain of raw materials and textile products consumption of Vietnam.

Moreover, inflation in Vietnam's major textile and garment export markets, including the US and EU, as well as the complicated developments of the Russia-Ukraine conflict have caused raw material and fuel prices to rise, causing costs of enterprises increased by 20-25%. In addition, exchange rate disadvantages with competitors, post-pandemic labor shortage and requirements related to the traceability of cotton, fabrics and greening of textiles from FTAs ​​are also challenges that Vietnamese textile and garment enterprises are facing.

Therefore, to achieve the goal of sustainable development, businesses need to catch up with market trends and promote investment in machinery and technology, green transformation to adapt to the requirements of brands as well as strengthen appropriate training and resource development measures to promote exports and soon complete the set targets.

In addition, the Government and ministries need to have policies to cut taxes and fees, support businesses to access preferential capital, complete concentrated industrial parks for businesses to invest, accelerate production, exports of goods.

HH