Surrounded by difficulties, Ha Tinh textile and garment enterprises cut workers, accept losses

With orders plummeting, textile and garment businesses in Ha Tinh are having to lay off workers, reduce production capacity, accept losses, and even temporarily close down because they cannot withstand the difficulties.

From November 1st, 2023, Five Star Garment Joint Stock Company (Dai Kim Industrial Park, Son Kim 1 Commune, Huong Son District) officially suspended operations due to a lack of production orders. As a result, 300 workers were temporarily laid off. Currently, the management of Five Star Garment Joint Stock Company is trying to find new markets and secure new orders so that the company can resume operations and create stable jobs for its workers.

Vinatex Hong Linh Joint Stock Company is incurring losses due to increased import prices of raw materials, production and transportation costs, while product selling prices have decreased.

Meanwhile, at Vinatex Hong Linh Joint Stock Company (Nam Hong Industrial Cluster, Hong Linh Town), this is also an extremely difficult period as the company is facing its biggest losses ever. In the first 10 months of 2023, Vinatex Hong Linh Joint Stock Company produced and sold over 5,300 tons of yarn, generating revenue of approximately 389 billion VND, but incurring a loss of over 30 billion VND. Not only is it incurring losses, but orders have also decreased, resulting in a large inventory of over 600 tons of yarn.

According to Mr. Pham Anh Tuan, Chief Accountant of Vinatex Hong Linh Joint Stock Company: The company specializes in the production and export of yarn, with the main raw materials being imported. Recently, tensions between Russia and Ukraine, along with the impact of the global economic recession, have negatively affected the company's production and business. The price of imported cotton has increased, while the selling price of yarn has dropped sharply, and production and transportation costs have also risen significantly, resulting in losses for the company. Currently, the company is striving to maintain its production and business chain to preserve employment for over 300 workers.

Surrounded by difficulties, Ha Tinh textile and garment enterprises cut workers, accept losses

The Vietnam Garment Export Joint Stock Company is only operating 4 out of 8 production lines due to low order volumes.

Also facing difficulties, the Vietinbank Garment Export Joint Stock Company (Bac Cam Xuyen Industrial Park) is only maintaining production on 4 out of 8 production lines. With declining orders, the company has had to reduce its workforce from 300 to 170 employees. Workers' incomes have also decreased by approximately 1 million VND per person per month. In the first 10 months of 2023, the company's revenue was only about 25 billion VND, reaching 71% of its 2023 annual plan.

Ms. Luong Thi Tuyet, General Accountant at MTV Garment Export Joint Stock Company, shared: “Traditional orders from the Japanese market have been reduced in quantity, so we have to strive to find new customers in the European and American markets. However, the new product lines are difficult to produce, resulting in low productivity. The business is not making a profit, and may even incur losses, but we still have to make an effort to avoid disrupting the production chain. At this time, the factory's capacity has been halved, and production has also decreased by about one-third compared to last year.”

Surrounded by difficulties, Ha Tinh textile and garment enterprises cut workers, accept losses

TAAD Ha Tinh Production, Investment and Trading Joint Stock Company accepts small orders for both domestic and international markets to maintain its production chain.

According to businesses operating in the textile and garment sector in Ha Tinh province, this difficult situation has lasted from February 2023 until now and is projected to continue until mid-2024. The reasons for the difficulties are the global economic downturn, high inflation in the US, UK, EU, Japan, South Korea, etc., which reduces demand for textiles and garments; leading to a shortage of orders and a sharp drop in processing prices.

To maintain operations, textile and garment businesses in Ha Tinh are actively seeking customers, accepting small orders both domestically and internationally. "The company accepts even difficult orders, with processing prices drastically reduced by 20-40% compared to before, to keep workers employed. For many months now, the company hasn't organized Sunday work. We plan to give workers Saturdays off in December as well, because orders are currently very scarce. In the first 10 months, revenue reached 30 billion VND, only slightly over 54% of the annual plan," said Mr. Pham Dinh Nhan, Director of TAAD Ha Tinh Production, Investment and Trading Joint Stock Company.

Surrounded by difficulties, Ha Tinh textile and garment enterprises cut workers, accept losses

Currently, Ha Tinh province has 6 enterprises producing and trading textile and garment products with more than 3,500 workers.

According to statistics from the Department of Industry and Trade, Ha Tinh currently has 6 enterprises operating in the production and trading of textiles and garments with more than 3,500 workers, a decrease of more than 1,000 workers compared to 2022. Surveys show that orders for textile and garment businesses in Ha Tinh have decreased by about 40% compared to before.

In October, textile and garment exports reached $1.3 million, only 62% of the figure for October last year. Currently, the Department of Industry and Trade is gathering and receiving suggestions from businesses operating in the textile and garment sector to develop a plan to support and help businesses overcome this difficult period.

Phan Tram - Thu Phuong

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