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Garment makers struggle to make threads meet

Update: June, 06/2012 - 10:22

HA NOI — Domestic garment and textile makers are striving to survive amid the global economic turmoil, industry experts said.

Tran Dang Chuc, general director of Thien Nam Garment and Textile Company, said that in the last few weeks his company had not exported anything.

Chuc said Thien Nam, which has 18,000 workers, was receiving just a few orders each month. To reduce losses, he said the company had adjusted its prices to take into account changes in interest rates and the cost of raw materials.

Meanwhile, Nguyen An, general director of Garment Sai Gon, said his company's traditional partners in Europe had significantly reduced imports.

An said export orders were down 30 per cent across the entire garment and textile sector. He added that small firms faced closure due to larger firms' competitive advantage. He also said big exporters benefited from free on board (FOB) shipping, where the buyer or seller pays transport and loading costs.

In a bid to survive, Garment Sai Gon is constantly looking for new markets, while boosting productivity and adopting FOB shipping when it came to exports, An said.

An said his company had orders up to September. In the last four months, Garment Sai Gon reached an export turnover of VND300 billion (US$14.2 million) earning a profit of VND20 billion ($952,000) or 30 per cent of its yearly target.

"If there is no change, Garment Sai Gon will reach its target this year," he said.

In the second quarter of this year, the company opened a representative office in Hong Kong to directly buy raw materials and opened a retail outlet in the US.

Ninh Thi Ty, Ho Guom Garment and Textiles chair, said her firm was under intense pressure to reduce prices. She said her company had also taken steps to cut production costs.

This year, the garment and textile industry set itself a turnover target of $15 billion, a 12 per cent increase against 2011. In the first five months this year, export turnover reached $5.3 billion or an increase of 7.7 per cent against 2011.

Meanwhile, imports of raw materials decreased both in volume and value. Imports of cotton dropped 33.7 per cent in value and 2.3 per cent in volume, while imports of fibre dropped by 29.3 per cent in value but were up 0.2 per cent in volume. — VNS

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