Although Vietnam's textile and garment export turnover in the first three months of the year reached nearly 10 billion USD, an increase of about 10% over the same period in 2023, the industry is still facing many difficulties and challenges due to decreased consumer demand, high inventories; geopolitical instability in some countries around the world... To achieve the set goals, businesses need to flexibly deploy appropriate solutions, contributing to promoting production and business activities.
At present, the number of orders is relatively abundant, however, unit prices have not increased, and some contracts have even decreased by 30% to 50% in price compared to 2023. Many textile and garment enterprises still accept these contracts to ensure jobs for workers and maintain production.
Stable operation
General Director of Garment 10 Corporation Than Duc Viet said that the total revenue of the unit in the first three months of the year reached 1,128 billion VND, an increase of 24.41% over the same period, reaching 25.07% of the 2024 plan. Of which, export revenue reached 1,020 billion VND, domestic revenue was more than 73.1 billion VND, an increase of 3% over the same period. The workforce is maintained stable, with an average income of 10.7 million VND/person/month.
In the coming time, May 10 will continue to invest, focusing on key projects including Thai Ha - Thai Binh Garment Factory and expanding production capacity at Bim Son Factory. It is forecasted that the unit will continue to face many difficulties when the market recovers slowly, the situation is unpredictable, although orders have recovered but prices have not improved, even many product lines are expected to have prices in the second half of the year lower than in 2023. Meanwhile, requirements for production and delivery progress have also gradually shortened. "To cope with the difficulties, in the past two years, May 10 has diversified its products in both design and material. At the same time, the unit has combined AI and technology to maintain maximum efficiency" - Mr. Than Duc Viet emphasized.
Regarding the production and business activities of the unit, General Director of Dong Xuan Knitting Company Limited Nguyen Dang Loi affirmed: In the first quarter of 2024, the enterprise operated stably. Specifically, with textile and dyeing orders, this year's capacity has increased to more than 100 tons/month compared to the average of 60-70 tons in 2023. Garment orders have also been signed until the end of September and continue to be discussed and negotiated for the fourth quarter of 2024.
In addition, the old equipment from the 90s of the 20th century has been replaced by the unit to gradually increase the scale of capacity as well as competitive position in the market. The enterprise will continue to be steadfast, aiming to only carry out FOB orders (purchase of raw materials, semi-finished products) from fabrics produced by Dong Xuan to increase value and profit instead of developing and making CMT (processing) products - a field that is increasingly competitive.
Similarly, the leader of Thanh Cong Textile-Investment-Trade Joint Stock Company said that in the first three months of the year, the unit's revenue reached 39 million USD, an increase of 6% over the same period and the highest level in the last six quarters, with after-tax profit estimated to increase by 9% to 2.5 million USD. In 2023, the unit was always operating at below capacity, but in the first quarter of 2024, the company increased its capacity to 100%, and has currently received 85% of orders for the second quarter and 80% of orders for the third quarter. With this positive situation, the unit expects to complete the revenue target of 3,707 billion VND.
According to General Director of Vietnam National Textile and Garment Group (Vinatex) Cao Huu Hieu, in the past three months, units in the group have ensured jobs and kept the workforce stable; the rate of workers returning to textile and garment enterprises after Tet reached 95%; total revenue reached 4,115 billion VND, equal to 23%; profit reached 96.8 billion VND, equal to 17% of the yearly plan; average income reached 9.57 million VND/person/month, equal to 101% over the same period...
Build a suitable roadmap and direction
In the context of many general difficulties, the garment industry has shown signs of improvement in orders, but efficiency is not high because unit prices remain low as in the third and fourth quarters of 2023. Meanwhile, cotton prices are expected to remain high due to speculation, hoarding, and logistics difficulties; yarn exports to the Chinese market are less competitive because this country is promoting policies to support taxes, fees, transportation, electricity prices, etc. for domestic production and consumption.
Vinatex General Director Cao Huu Hieu commented that in order to maintain stable production and business, textile and garment enterprises need to implement solutions to ensure orders, quickly take advantage of all opportunities as well as continuously forecast and update the situation to have timely solutions; resolutely restructure units that have been facing difficulties for a long time, improve productivity, reduce costs, apply advanced management solutions; promote the implementation of projects to increase production capacity, such as the fireproof fabric production project, Nam Dinh fiber project, etc.
Sharing the same view, Chairman of the Board of Directors of Vinatex Le Tien Truong emphasized that, in addition to difficulties and challenges, the textile and garment market still has room for development for businesses with the right strategy, outstanding productivity and quality, close supply chain linkage, meeting the new requirements of the digital economy and green economy with appropriate steps. In the first quarter of 2024, the production and business efficiency of many units has improved compared to the same period, especially large units in the garment industry with an improvement of more than 20%.
In the coming time, the group's executive body will closely follow market information and production and business activities of its subsidiaries to have flexible and innovative solutions in product development and finding new markets to bring about better efficiency.
Analyzing more clearly the difficulties of enterprises, Chairman of the Board of Directors of Hung Yen Garment Corporation (Hugaco) Nguyen Xuan Duong said that although the number of orders is relatively large, the prices are low, while the costs are increasing such as wages, input material prices, etc. On the other hand, the tendency of workers to move to newly opened markets such as Korea and Japan to improve their lives is also a factor affecting the maintenance of stable production and business.
“There are also other pressures due to the increased cost of many orders in Vietnam, so large foreign enterprises tend to downsize and move to other countries. In addition, some major markets have added more reserves and in fact, total demand has not increased, even predicted to decrease by 5% to 10% compared to 2023. Not to mention, a series of large fashion businesses in the world are facing the risk of bankruptcy, causing many domestic enterprises to be unable to recover tens of millions of USD in wages,” Mr. Nguyen Xuan Duong emphasized.
According to Mr. Duong, while the order price is low and wages for workers have not improved, businesses are "bound" by the regulation of not being allowed to work overtime, currently working six days a week, eight hours a day and are expected to reduce to 40 hours a week, making businesses "more difficult than ever".
Meanwhile, in Japan or some other markets, workers work 10 to 12 hours a day, continuously all week to earn more than 20 million VND/month. "Even workers in the industry want to work more to accumulate and cover their living expenses, so it is necessary to issue policies suitable to the conditions and actual needs of workers. In addition, relevant functional sectors need to have mechanisms and policies to support capital to help businesses, especially small and medium enterprises, to access to promote investment and develop production," Mr. Nguyen Xuan Duong affirmed.
In the first quarter of 2024, textile and garment export turnover reached nearly 10 billion USD, an increase of nearly 10% over the same period. This is the driving force for businesses in the industry to achieve the target of 44 billion USD this year. In addition, businesses have been investing in many modern equipment, improving management, etc. to increase competitiveness and meet the increasing demands of the market. Grandfather Vu Duc Giang , Chairman of Vietnam Textile and Apparel Association |
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