Textile and apparel manufacturers are experiencing a dearth of orders, which is lowering capacity towards the end of the year

DNHN - Consumption of goods stalled, and clients prolonged orders, leading the company's inventory to build to 3-6 months, causing cash flow to halt, making future commercial operations impossible.

Participating in a talk program "The textile and garment sector has set a target of exporting 43-44 billion USD this year," Mr Nguyen Van Thoi, Chairman of the Board of Directors of TNG Investment and Trading Joint Stock Company, remarked, “We can cross the finish line if the next six months are as good as the first six months of the year. However, in light of inflation, I believe textile and garment exports can only expand by 5% in comparison to the 39 billion level in 2021."

Viet Thang Jean Co., Ltd (VitaJean) Chairman of the Board of Directors, Mr Pham Van Viet, stated: "This quarter will be extremely challenging for the textile and apparel industries. Orders from the United States and the European Union have dropped by around 20%, according to VitaJean. As a result, we anticipate cutting our labour capacity to four days per week, rather than six days as previously." 

According to a VitaJean spokesperson, the paucity of textile and garment orders is a typical story for many enterprises, since these two countries account for 60% of the industry's overall export sales. Mr Viet is also concerned that if inflation continues to rise, clients would cancel 2023 reservations.

TNG Investment and Trading Joint Stock Company, on the other hand, chooses to balance profit margins and share challenges with consumers. As a result, TNG's orders remain consistent, with the company establishing contracts with roughly 4-5 significant clients in the United States, France, and Colombia. Furthermore, this company seizes the chance when the Russian market's consumption improves; the entire value of orders in this market is around 30 million USD.

Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, projected that the international market will see unpredictable changes in the second half of this year, offering several problems for firms throughout the textile and garment sector. In the context of the present difficult-to-predict global economic environment, enterprises must apply several methods to proactively create raw materials while assuring enough order fulfilment. 

Simultaneously, it is vital to constantly monitor information and market trends, as well as understand the requirements of the importing country's market, to make relevant modifications.

"We have trade agreements that are a driving force; this is also a solution to minimize tariff lines, as well as an appealing enough option for investment solutions in Vietnam's textile and apparel sector. Second, we have taken the initiative in some input materials, which will lessen challenges while preserving purchasing power in global textile products. We also have solutions to adapt to some high-end product lines and challenging goods, as well as products with differences and distinctive features, which influences fostering innovation in equipment and technology to adapt to new product lines "- Mr Vu Duc Giang shared.

Unpredictable market developments, as well as continually rising raw material and accessory prices, provide significant hurdles to textile businesses. As a result, firms must build flexible ways to deal with and quickly adjust to market signals to be proactive in increasing product production and export, supporting development, and meeting established targets.

Anh Dieu