06:00 | 21/08/2020 Industry
(VEN) - The export value of textiles and garments is forecast to continue plunging in the third quarter of this year without any sign of recovery. Therefore, businesses need to be flexible to adapt themselves to the situation.
|The 2020 textile and garment export value is forecast to decrease sharply|
Exports down 20 percent
According to Le Tien Truong, General Director of the Vietnam National Textile and Garment Group (Vinatex), in the first five months of 2020, the export value of textiles and garments decreased 15.5 percent compared with the same period last year, and the decline is forecast to be 20 percent by the end of June compared with the first half of 2019. “The storehouses of companies are full of finished products as they cannot export,” Truong said.
Than Duc Viet, General Director of the Garment 10 Corporation Joint Stock Company, said that the company has received no new orders except the ones placed in March, April and May, for which importers requested delivery in January 2021.
This situation is attributed to the impact of the Covid-19 pandemic on major importers of Vietnamese textiles and garments. Ongoing lockdown has affected consumer incomes and led to a strong decline in their demand for textiles and garments.
Vu Duc Giang, President of the Vietnam Textile and Apparel Association, said that Covid-19 social distancing has changed consumer habits. Instead of going to the supermarket or buying large volumes of goods online, consumers have cut their spending and give priority to essential goods. High-end garments that are sold at high prices have been excluded from the choice list.
Le Tien Truong believes businesses will continue facing difficulties from now to year’s end. Meanwhile, Vu Duc Giang predicted the export value of textiles and garments would decline even more sharply in the third quarter of 2020 compared with the first and second quarters, and reach no more than US$34 billion by year’s end.
If they continue facing order shortages next year, textile and garment companies will have to cut their human resources costs, increasing the unemployment burden and making it hard for them to bring back workers once they receive new orders.
One positive signal for exports is the decline in the number of unemployment benefit recipients in the US - a major and traditional export market of Vietnamese textiles and garments. Vinatex warned domestic companies of the need to restructure production to shift from high-end products to those of lower costs. Le Tien Truong believes this is not a long-term but suitable solution for the current situation.
Vu Duc Giang said that Vinatex has encouraged textile and garment companies to expand protective suit production to meet high market demand as well as to maintain manufacturing.
Vu Duc Giang,
President of the Vietnam Textile and Apparel Association:
The government should allow foreign investors and experts, especially machinery and equipment experts, to enter Vietnam to assist domestic companies in operating textile and dyeing projects.