10:29 | 10/02/2016 Society
(VEN) - The Vietnamese textile and garment sector is forecast to face numerous difficulties and challenges in 2016. However, the successful results it achieved in 2015 and previous years should have laid a firm foundation for the sector to overcome the hardships and make the most of opportunities from international economic integration.
Vietnam exported US$27.2 billion worth of textiles and garments in 2015
Annual export target realized
Vietnam National Textile and Garment Group (Vinatex) General Director Le Tien Truong said that the textile and garment sector realized its annual export target for 2015 with the export value reaching US$27.2 billion, a 10 percent increase compared with 2014. While exports to the EU and Japan did not grow, exports to the US rose 14 percent.
2015 saw the sector’s great efforts to promote domestic production of textile and garment materials to meet the rules of origin outlined in free trade agreements (FTAs). This process began in 2011 when the sector joined the government’s delegation to FTA negotiations.
Vinatex has invested in three large fiber production projects at Phu Hung, Nam Dinh, and Phu Cuong. The construction of the Phu Hung Fiber Plant and a yarn-dyed fabric plant in the Mekong Delta province of Long An has been completed, and the construction of the Nam Dinh Fiber Plant is expected to finish in the first quarter of 2016.
The group is preparing to invest in a fiber, textile, dyeing and garment complex in Quang Nam Province’s Que Son District to produce 12,000 tonnes of knitted fabrics annually for supply to garment factories in the central region. Vinatex also has six garment projects which are focused on knitted, shuttle-woven clothing, and suit production, and are expected to be completed in the first half of 2016.
“Vinatex is pursuing the goal of becoming capable to manufacture 60 percent of fibers and fabrics required for domestic garment production by 2018 when the Trans-Pacific Partnership (TPP) and the EU-Vietnam Free Trade Agreement (EVFTA) take effect. The local content of domestic garment products is projected to reach 65 percent by 2020,” Truong said.
2015 also saw the textile and garment sector’s success in developing human resources. The Industrial College for Textile, Garment and Fashion has been upgraded into a university capable of training 500 students each course. This is Vinatex’s official address for practical engineer training. The university provides students with training with up to 70 percent in the university, while the remainder is spent at workplaces. Through this, the university can ensure that it will produce high quality human resources for the textile and garment sector in the next five years.
Along with long-term training, since 2013 Vinatex has organized short-term courses to train about 300 directors and heads of production facilities each year.
Confidently overcoming difficulties
2015 was a hard year for the Vietnamese textile and garment sector, and these hardships will continue in 2016. Truong predicted that 2016 would see further changes in the financial and monetary markets as well as global economic growth. The US economy has shown many signs of recovery, while the EU and Japan have not seen good economic prospects. Notably, global oil and petrochemical material prices are forecast to remain at low levels in 2016. As a result, suppliers of natural materials such as cotton and fiber will also have to reduce prices to compete. Therefore, it is forecast that there would be no changes in aggregate demand and unit price in 2016.
Despite numerous difficulties, the textile and garment sector expects its annual export value and output would grow 8-10 percent and 11-12 percent respectively in 2016 compared with 2015. So the sector’s export value is expected to reach US$29.5-30 billion in 2016, a rise of US$2 billion compared with 2015,” Truong said.
Experts believe one of the factors making the Vietnamese textile and garment sector confident of its ability to overcome difficulties is that the technical labor productivity has considerably improved. From 2010-2015, the technical labor productivity of the garment and fiber sectors grew 177 percent and nearly 180 percent respectively.
Vinatex has been active in building supply chains and established corporations to promote specialized production.
The group will have two corporations, one in the north, and one in the south. Member units of the corporation in the north include Hanoi Textile and Garment Joint Stock Corporation (Hanosimex), 8/3 Textile Company Limited, Dong Xuan Knitting Sole Member Limited Liability Company, Vinatex Hong Linh Joint Stock Company, Nam Dinh Fiber Plant, Quang Binh Garment Factory, and Tuyen Quang Garment Factory. Hanosimex is the core of the corporation in the north.
Member units of the corporation in the south include Dong Phuong Knitting Company Limited, Kien Giang Garment Factory, Phu Cuong Fiber Plant, the yarn-dyed fabric plant in Long An, Can Tho Garment Factory, and Bac Lieu Garment Factory. Vinatex will also establish a corporation in the central region with the Hoa Tho Textile and Garment Joint Stock Corporation and the Que Son fiber, textile, dyeing and garment complex as its core.
Each of these corporations will operate a complete production chain covering all stages from fiber and fabric production to garment manufacture, providing the basis for setting up small supply chains to help Vinatex improve its competitiveness and gradually comply with FTA rules of origin.