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| Garment production at the Thai Nguyen Export Garment Joint Stcok Company. Harment and textile exports in the first five months of 2016 rose 6.1 per cent to US$8.6 billion. — VNA/VNS Photo Hoang Ngan |
HA NOI (Biz Hub) — Garment and textile industry exports in the first five months of this year rose 6.1 per cent to US$8.6 billion, according to the Ministry of Industry and Trade.
The rise was lower than the targeted growth of 10 per cent this year.
In May, the industry earned $1.75 billion, up only 3.8 per cent.
The United States was the largest export market of the industry, with $3.4 billion, up 6 per cent. The European Union, Japan and South Korea followed with $936 million, $845.17 million and $677.2 million, respectively.
Industry insiders are concerned with meeting the industry's export target of $31 billion this year due to falling export prices and difficulties in finding new export contracts, especially for shirts, pants and jackets.
Than Duc Viet, deputy general director of the Garment No.10 Corporation, said this year's business results for local textile and garment exporters, especially among small- and medium-sized firms, were not as good as expected due to rising input costs and falling demand.
The chairman of the Viet Nam Textile and Apparel Association (VITAS), Vu Duc Giang, said some traditional customers of Viet Nam's garment exporters were moving their orders to Laos and Myanmar, which have preferential tax rates for exports to the United States and European Union.
Currently, the tax imposed on Viet Nam's textile and garment exports to the United States averages 17 per cent, while the rate to the European Union is nearly 10 per cent. The taxes are expected to drop to zero by mid-2018 when the Trans-Pacific Partnership and Viet Nam-EU Free Trade Agreement take effect.
Giang said domestic textile and garment exporters will therefore have to compete fiercely against producers from Laos, Myanmar, Cambodia and Bangladesh.
VITAS said export growth rates among these producers were rising faster than in Viet Nam. It offered Cambodia as an example. Viet Nam's textile and garment exports to the European Union were valued at 2.53 billion euros in 2014 and 3.13 billion euros in 2015. Meanwhile, the European Union imported textiles and garments worth 2.26 billion euros in 2014 and 2.97 billion euros in 2015 from Cambodia.
Vinatex eyes export growth
The Viet Nam Textile and Garment Group (Vinatex) is expecting the export turnover to grow by 10 per cent this year to US$2.6 billion.
At the annual shareholders' meeting in Ha Noi yesterday, Vinatex General Director Le Tien Truong said that the group would focus on supporting its subsidiaries in trade promotion to enlarge export markets to meet the target.
The group would also set up research boards on free trade agreements to take up the initiative in building effective business and investment strategies, Truong said.
Vinatex has invested in developing supply chains from materials to finished products over the past year. After launching operations of the Kien Giang project in 2015, the group is completing the Phu Hung Fibre Plant and a yarn dyed cloth project.
Besides, the group has also developed the Supply Chain Development Centre (SCDC) to be dependent on material sources. So far, the SCDC has eight regular customers for garment products and has been developing 20 customers in the United States, Europe, South Korea and Japan. The centre has had 10 customers for cotton and fibre and has been developing 30 customers for its products in Chile, China, Thailand, and Malaysia, in addition to South Korea.
Vinatex gained good business results last year with high growth rates from 7 per cent to 13 per cent from most of its large export markets. The group reported an export value of $2.37 billion and a pre-tax profit of VND628 billion last year. — VNS