Orders increase, textile and garment enterprises show many positive signs
In the first quarter, the export turnover of the entire textile and garment industry reached over 9.53 billion USD, an increase of 9.62% over the same period, and this is a good sign for the textile and garment industry because there have been improvements.
Sewing export goods at Tinh Loi Garment Company, Hai Duong. Photo: Tran Viet/VNAHowever, to achieve the 2024 plan of exporting about 44 billion USD, an increase of 9% compared to 2023, the textile and garment industry needs to make more efforts.
Good news
According to the Vietnam Textile and Apparel Association, the textile and garment industry has many positive signs because manufacturers and global textile and garment supply chains continue to choose Vietnam as a place to produce and place orders. Vietnam currently holds the third position in the world in textile and garment exports. Demand in key export markets and the production situation of enterprises, although not yet really clear, are more positive than the same period last year. This signals prospects for the Vietnamese textile and garment industry in 2024.
A survey of some enterprises showed that many enterprises have enough orders to serve production until the end of June, some even have enough orders until the end of the year. According to the Chairman of the Board of Directors of Vietnam Textile and Garment Group - Mr. Le Tien Truong, many Vinatex member enterprises have received orders until June. In addition, the fiber industry has received a lot of positive information when many customers negotiate and make transactions for the following months.
Similarly, at Garment Corporation 10 since after Tet until now, the employment of workers has been stable with enough orders in the first quarter and main season orders until August. With the spirit of overcoming difficulties, Garment Corporation 10 is still determined to achieve the revenue target of 4,500 billion VND in 2024, exceeding 6.6% compared to 2023. Profit reached 130 billion VND, exceeding 5.7% compared to 2023. At TNG Investment and Trading Joint Stock Company, the number of orders of the unit has been signed until the end of June. With such a number of orders, TNG plans to increase total capacity by 15% by deploying 45 more sewing lines and recruiting 3,000 more workers.
Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, commented: The recent increase in orders shows that the textile and garment industry is continuing to recover. However, in the face of potential risks in the market, businesses are required to proactively take measures to maintain growth and stabilize jobs for workers.
Efforts to overcome difficulties
Sewing export goods at Tinh Loi Garment Company, Hai Duong. Photo: Tran Viet/VNAAccording to economic experts, the world economy has many bright spots for the textile and garment industry to recover, especially in the industry's traditional and large export markets. Vietnam is a safe destination, a new driving force for orders to have a better chance of returning to Vietnam. The domestic macro economy continues to be stable, with a forecast of higher gross domestic product (GDP) growth in 2023.
On that basis, the mindset of the textile industry is to seize the opportunity to achieve the highest efficiency. At the same time, prepare equipment conditions, management capacity, and production with the highest productivity and quality. At the same time, continue to save and ensure good production costs, achieve the earliest efficiency, thereby proactively welcoming the “wave” of new orders.
However, the textile and garment industry still faces many difficulties such as: conflicts in the Red Sea, Russia - Ukraine tensions, trade wars between major countries... Mr. Than Duc Viet - General Director of May 10 Corporation shared that there are still many difficulties from the application of the EPR mechanism (extended producer responsibility) and CBAM (carbon border adjustment mechanism) as well as the “sustainable fashion” strategy instead of “fast fashion”, the EU's OECD Supply Chain Audit Directive; Germany's Supply Chain Audit Law...
Furthermore, export orders are expected to be small in quantity, with fast delivery times, risky supply chains, and high input costs. In addition, debt repayment risks, interest rate risks, and falling exchange rates; the trend of digital transformation and rapid circular business are issues facing the textile and garment industry in the coming time.
“Therefore, May 10's solution in the current context is to speed up production as quickly as possible to compensate for the extended shipping time due to tensions in the Red Sea,” said Mr. Than Duc Viet.
Some experts also said that the target set by the Vietnamese textile and garment industry of exporting 44 billion USD this year is quite challenging when there are still many risks in the supply chain. Transportation costs as well as businesses must increase investment to meet the requirements of brands on greening, extended responsibility of manufacturers, ESG (environment - society - corporate governance), digital transformation... Accordingly, finding new customers, new markets as well as developing new sources of raw materials for textile and garment enterprises is an urgent requirement today.
Mr. Vu Duc Giang said: The market is warming up, many retail groups in FTA member blocs such as Canada, Australia, Europe... have come to Vietnam to find supply chains with competitive prices. Therefore, the plan to increase textile and garment export turnover to 44 billion USD in 2024 is completely possible.
However, Mr. Giang also pointed out 3 challenges for textile and garment enterprises including: origin of product lines; recycled products, recycling rate - there must be a specific rate and method to meet their requirements. Enterprises need to make the most of opportunities from free trade agreements (FTAs), with 16 FTAs in effect and Vietnamese goods having the opportunity to access a large market. When the agreements come into effect, the role of the supply chain is very important. Customers will look for suppliers who are capable of providing complete textile and garment products.
