Vietnamese Textile And Garment Enterprises Decline In The Number Of Orders!

Vietnamese textile and garment enterprises decline in orders

According to the Ministry of industry and trade, under the turbulence of the world economy, domestic enterprises face many difficulties in production and operation. Trade tensions between China and the United States have affected currency exchange rates, and Vietnam's commodity processing costs are higher than those of some countries such as Korea and China, thereby affecting export orders.

Yue Tong Hanoi, according to the report of the Ministry of industry and trade, under the turbulence of the world economy, domestic enterprises are facing many difficulties in their production and operation. Trade tensions between China and the United States have affected currency exchange rates, and Vietnam's commodity processing costs are higher than those of some countries such as Korea and China, thereby affecting export orders.

Although the production and export of textiles and clothing both maintained a year-on-year growth momentum in the first half of August this year, however, the number of orders changed. Therefore, enterprises need to take measures to change the way of production and operation and conform to the actual situation.

According to experts in the industry, as of now, the number of orders for enterprises is not improving compared with that in 2018. Accordingly, the order quantity of some enterprises is only about 70% of the same period in 2018. In the mid 2018, orders for many textile and garment enterprises had been put to the end of the year. In 2019, orders from various enterprises were fewer and signed monthly.

Wu De Jiang, chairman of the Vietnam textile and Garment Association, said that because of the changes in the consumption policies of the big exporters such as the United States and Japan and the impact of trade war between the United States and China, the purchasing power of some commodities declined, resulting in a decline in orders for some textile and garment enterprises.

The textile and garment industry has proposed export target of US $40 billion this year.

Wu Dejiang said that Vietnam's textile and garment industry has raised the target of export volume of US $40 billion this year. The United States is the largest market, accounting for about 42% of Vietnam's total exports to the world market. The EU market ranked second, accounting for 21.5%, less than 20% of the target. Japan ranked third, accounting for 19.5%. South Korea ranks fourth, equivalent to 14% of the target set.

According to the Ministry of industry and trade, exports of textiles and clothing amounted to US $21 billion 700 million in the first half of August this year, an increase of 9.8% over the same period last year. Natural fiber fabrics reached 412 square meters, an increase of 10.5% over the same period. The fabric of synthetic fiber and artificial fiber reached 786 million square meters, increasing by 9.9%. (Yue Tong - VNA)

Status quo: orders are not up to expectations.

Small businesses produce or stop production on an appropriate scale.

However, although Vietnam's textile and garment exports generally increase sharply at the end of the year, it is difficult to achieve the annual target of 40 billion US dollars in export volume. With the weakening of the whole world environment, Vietnam's textile industry is also facing great challenges.

Gao Yu Xiao, chief executive of Vietnam textile and Garment Group (Vinatex), said that in the first half of this year, Vietnam's textile and clothing exports totaled 18 billion 100 million US dollars, up 9.3% over the same period last year, of which Vietnam's textile and Apparel Group's exports amounted to US $1 billion 320 million, up 0.7% over the same period last year, reaching 44.5% of the annual plan.

Vietnam's exports to the United States amounted to 7 billion 220 million US dollars, an increase of 117%. It is still the largest export market for Vietnamese textiles and clothing, and exports to the European Union (EU) amounted to US $2 billion 560 million, an increase of 11.7%, and exports to China amounted to us $2 billion, an increase of 10.3%. Exports to Japan amounted to US $1 billion 890 million, an increase of 5.2%, and exports to Korea amounted to 1 billion 630 million US dollars and 4.6% growth.

In the past, the volume of orders was quite large, but the order volume was not up to expectations. Therefore, all fiber enterprises must make enough production and sell the stock fibers mainly.

As for the garment industry, because the importers of big market are listening to the market voice and estimating the market trend, the order volume suddenly drops, the quantity decreases, and the execution time is shortened. Because of this, orders for the major garment enterprises have been put into the third quarter. Other small businesses are operating hard, and they can only produce or stop production in proper quantities.

In the same state, Ruan Wen Huang, general manager of Dovitec, said that the company is currently receiving orders for September, and is still negotiating with its clients to the end of the year. In the first 6 months of this year, the company's exports amounted to 45% of the annual plan (2 trillion and 100 billion of the total expected for the whole year).

Although the export target is equivalent to 2018, the company is also faced with problems such as reduced order price, personnel changes and so on, which makes the company encounter many difficulties. However, because export textiles often increase sharply at the end of the year, the completion of the target is just around the corner, so as to ensure the stability of the employment of ten thousand workers, with a monthly income of 9 million 200 thousand over shield.

On the other hand, unlike those facing difficulties, Ruan Wenshi, chairman of TNG investment and trading company, said that the company had a steady customer volume, so the export of its products increased continuously. The export volume in the first six months of this year reached US $130 million, reaching 61.9% of the annual plan (annual target of US $210 million).

Among them, exports to the United States and other important export markets such as other Member States, the European Union and Russia in the comprehensive and progressive trans Pacific Partnership Agreement (CPTPP) are increasing. About the order quantity, the company has signed the contract with the partners to the end of the year, and even some are negotiating to sign the contract next year.

In the coming months, the export market will release positive signals, which will create a precondition for Vietnam's textile industry to achieve its planned goals. In addition, the Sino US trade war has led some investors to turn their attention to Vietnam's market and expand production scale and export market, so as to create convenient conditions for domestic enterprises.

Vietnam can't be underestimated! It has the ambition to become a factory in the world.

At present, Vietnam has become the third largest textile exporter in the world.

Vietnam's GDP growth rate has been maintained at 7 percentage points for many years.

As China's supply side reform, labor costs and environmental costs are increasing, China's textile industry is undergoing an industrial transfer in recent years, and the textile industry in southeast coastal areas has gradually shifted to the central and western regions of China and Southeast Asian countries. Vietnam is the most important country to undertake the transfer of China's textile industry.

In recent years, a large number of weaving and garment enterprises in China have chosen to run factories in Vietnam. At the same time, some tycoons such as Adidas, Nike and UNIQLO have also moved their factories to Vietnam. With the help of various favorable factors, the Vietnamese textile industry has come to a golden hair extension.

From a tariff point of view, Vietnam has formed a relatively large and mature free trade system, and Chinese enterprises have become more and more popular in order to avoid trade barriers and increase investment. Especially after 2019, Vietnam's new foreign trade agreements came into effect, and Vietnam's export tariff advantage is further highlighted.

In April 24th of this year, Vice Premier Zheng Dingyong of the Vietnamese government signed the government's decision No. 18/2019/Q, -TTg, to prohibit the import of machinery, equipment and production lines with a technology life span of 10 years or more. The technology will come into effect in June 15, 2019.

This means that Vietnam is not only satisfied with low profit links such as garment foundry, but will directly enter the raw material and fabric market. If all textile enterprises investing in Vietnam want to continue to enjoy a low tariff policy, the origin of textile materials used in the future will have to be 90% in Vietnam.