HCM CITY — A plunge in export growth and declining orders have led the Viet Nam Textile and Apparel Association to scale down its export-value target from US$19 billion to US$17-17.5 billion.
Domestic exporters said the weak global economy and sinking textile and garment consumption were the reasons behind the move.
Figures from the Ministry of Industry and Trade showed that the sector’s export value increased 14.7 per cent year-on-year in the first four months of 2012, hitting $4.4 billion.
However, in the first five months, growth fell to 7.7 per cent, reaching $5.3 billion, and in the first seven months, the sector’s export growth was at 8.8 per cent, much lower than the country’s general year-on-year export growth of 19 per cent.
Although exports of textiles, garments and fibres increased 7.5 per cent year on-year to $9.2 billion for the first seven months, the figure was much lower compared to the 30-per-cent increase over the same seven-month period last year.
Only big textile and garment exporters have orders for the third quarter of this year, while many small – and medium-sized enterprises have to cut production because of a shortage of orders.
Consumption demands in the EU have fallen strongly in the past months and export orders have decreased by 20-30 per cent compared to the same period last year.
Le Tien Truong, VITAS deputy chairman, said the apparel industry accounts for 15-16 per cent of the country’s total exports, and employs 2.5 million workers.
WTO membership enabled many garment companies to find new markets as well as enjoy priorities such as the most favoured nation status, he said. It had also brought many foreign investors into the Vietnamese garment industry, he said. In 2007 alone the industry attracted 150 projects with a total investment of $690 million. In 2007-12 there have been 485 FDI projects worth more than $2 billion.
But there have also been many challenges.
The association said the global recession was having a severe impact on the industry, with prices and orders declining significantly.
Truong said the industry’s long-time advantage of cheap human resources has also mostly evaporated.
The industry is under severe pressure and faces a risk of losing even the domestic market, he warned.
Read more …
Garment firms lower outlook, Vietnam News, Aug 15, 2012
WTO boosts garment trade, Vietnam News, Aug 20, 2012
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