Reduced Orders For Masks In Vietnam

Vietnam is pushing garment manufacturers to produce personal protective equipment such as masks to offset the decline in textile exports and the impact of foreign investment on the local supply chain as a result of the new crown epidemic.

In recent years, some clothing and shoe-making enterprises have shifted their production lines or parts of their production lines to this Southeast Asian country. This epidemic has put a brake on this trend. The Vietnam textile and Apparel Association calls this its most serious crisis. Vitas represents 450 companies.

From the beginning of this year to August 20, foreign direct investment (FDI) decreased by 13.7% compared with the same period in 2019. Investment has been growing rapidly for many years, up 7% from 2019.

Vietnam's clothing and textile exports also fell 11.6% in the year to August compared with the same period in 2019 due to lower orders from the United States and Europe, according to the National Bureau of statistics.

Vietnam is the third largest textile exporter in the world after China and India. This industry has helped Vietnam become one of the fastest growing economies in the world through the development of manufacturing industry. In 2019, Vietnam exported $32.6 billion worth of clothing and textiles through different brands such as Wal Mart and Adidas.

Swedish fashion brand H & M once said: "this spring, the sharp decline in global demand has naturally had a significant impact on our order arrangements with suppliers in all production markets, including Vietnam."

"Our textile industry in Vietnam has never experienced such pressure and rapid change," said Vu Duc Giang, head of Vitas "Every day is different from the next day, and every week is different from the next."

In order to survive the crisis, Vietnam hopes to become a world mask factory.

However, with the decrease of clothing demand, some factories have shifted their focus. According to the Ministry of trade, at least 50 companies are or are planning to mass produce medical masks. TNG, one of the biggest companies, typically supplies to buyers such as Levi's, Tesco and decathlon. But since this spring, it has exported millions of masks.

Although masks are small ticket goods, Vitas Giang said they have great export potential because masks have become mandatory and can be seen everywhere in the world. Vietnamese textile manufacturers are betting on the production of masks, saying global demand will continue because it will take time to end the epidemic.

Another way for Vietnamese companies to adapt to this environment is to adopt new technologies, such as connecting with partners digitally, he said.

For example, Vietnam's textile enterprises, for the first time, conducted all commercial transactions from introducing products to negotiating prices through wechat.

The Asian Development Bank expects Vietnam's economy to grow by 1.8% this year, one of the few countries expected to grow. However, this forecast is far below the 7% growth rate in 2019, and Vietnam is looking for a way out of the economic downturn.

Vitas estimates that 60% of its member companies rely on foreign procurement, most of which come from China, and hopes to reduce that figure to 30% by developing Vietnam's supply chain.

The supply chain of Vietnam and China will still be larger than that of Vietnam and China.