HA NOI — The garment and textiles industry is facing a hard year, with the global economy remaining insecure and major importers cutting back, warned experts.
The country's major importers such as the US, the EU and Japan will continue to tighten monetary policies and cut spending, according to Dang Phuong Dung, general secretary of the Viet Nam Textiles Association.
Dung said that since Viet Nam became an official member of the World Trade Organisation (WTO) five years ago, the domestic garment and textiles industry along with other economic sectors had made flexible changes to adapt to new conditions.
The garment and textiles industry was seeing the fastest and most stable growth for many years, and was an industry that Viet Nam had many advantages in, she said.
Viet Nam had broken into the list of the top 10 exporters of apparel in the world. Export turnover last year reached US$15.8 billion and maintained impressive growth of 25 per cent against 2010.
The country was now the second largest exporter of apparel to the US market with $6.87 billion in 2011, equivalent to a 12 per cent year-on-year increase. The world's second largest importer – the EU – contributed $2.5 billion to Viet Nam's garment and textiles industry last year, rising 33 per cent over 2010. Exports to Japan also brought a turnover of $1.86 billion with growth of 45 per cent, she said.
Vietnamese garment and textile products are now present in 180 markets worldwide, with major markets including the US, the EU, Japan, Canada, South Korea and Australia.
After joining the WTO, Viet Nam had better conditions to integrate into the world economy and attract foreign investment, develop the domestic economy, promote local production and improve the investment environment.
The country is committed to expanding its market, reducing tariffs and removing other trade barriers, especially apparel tariffs.
Economists have predicted that this year and the following years would be extremely difficult, as importers will continue to cut spending on garment and textile products. It was reported that in the remaining months of last year, local garment and textile exports were in decline both in turnover and orders.
Many businesses, especially small and medium enterprises, reported that in the first quarter of this year, they were struggling to secure orders for their Q3 and Q4 production plans.
It is forecast that competition on the world garment and textiles market is going to heat up, with many countries making efforts to raise quality.
In addition, the US and the EU have allowed China to abolish garment and textiles quotas. As a result, Viet Nam will face more competitive pressure from China and other Asian countries like India, Pakistan, Bangladesh and Sri Lanka.
General director of Garment 10 Nguyen Thi Thanh Huyen said Bangladesh and Cambodia had been granted zero per cent export tariffs to the EU market, and Myanmar was soon to follow. As a result, Viet Nam would see fierce competition from these countries.
Vietnamese apparel companies would have to manufacture high-quality, well designed products while closely managing the production process to compete with its rivals.
Domestic companies should closely monitor any changes in major importers and seek other opportunities in potential markets like Canada, Turkey, the Middle East, Russia and Eastern Europe in order to increase their export turnover, said Huyen. — VNS