Workers process garment products for export at Norfolk Joint Stock Company in Dong Van 1 Industrial Zone. — VNA/VNS Photo Vu Sinh

HA NOI (Biz Hub) — Producers of export quality garments are facing a reduction in orders, according to the Viet Nam Textile and Apparel Association (VITAS).

Vu Duc Giang, VITAS chairman, said they were considering moving export garment orders from Viet Nam to Cambodia, Laos, and Myanmar, because customers of those countries would join the preferential export tax when exporting to the United States (US) and Europe.

Meanwhile, the Trans-Pacific Partnership Agreement (TPP) and Viet Nam-European Free Trade Agreement have not yet come into effect. Therefore, partners of Viet Nam's export garment producers could not join any preferential tax regime from those agreements.

According to the General Department of Customs, Viet Nam gained a year-on-year growth in export values of garments at 7 per cent to US$7 billion in the first four months of this year, lower than the expected rate of 10 per cent. Import of materials for export garment production dropped in four months.

Hoang Trong Khang, deputy head of the import and export division at the Viet An Joint Stock Company specialising in garment exports to the US, European Union (EU) and South Korea, said the company saw reduction in exports to some major markets, including South Korea.

In fact, export orders for production in the second and third quarters have reduced by 5 per cent to 7 per cent against the same period last year, according to the association. The local enterprises were worried about the ability to move export orders of traditional customers to other regional countries in the second and third quarter. That situation would affect exports of enterprises as well as the garment industry.

To take more export orders and set up professional production and business activities, the Viet Nam Textile and Garment Group (Vinatex) has developed Vinatex International Joint Stock Company (VTJ) and the Supply Chain Development Center (SCDC).

The two businesses would combine and support member companies of Vinatex to exploit and expand the export market, seek customers and develop a supply chain from material to finished products, Tran Quang Nghi, Vinatex chairman, said.

So far, the SCDC has had eight regular customers for garment products and been developing 20 customers in the US, the Europe, South Korea and Japan.

The centre has had 10 customers for cotton and fibre and has been developing 30 customers of the products in Chile, China, Thailand, and Malaysia, in addition to South Korea.

VTJ has had 10 customers and it has concentrated on the US and Japan markets with large export volumes.

Viet Nam expected to gain total export value of $30 billion for this whole year, which is $3 billion more than in 2015. — VNS