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VietNam Textile Spotlights

28/07/2017 03:06 PM

VINATEX honored in the event "Vietnam's glory in 2017". On the evening of 20 May 2017 at Vietnam-Soviet Friendship Labor Culture Palace, the event "Vietnam's glory in 2017" took place with the theme "30 Years of Innovation". The event is organized to honor collectives and individuals who have made exceptionally outstanding achievements in the cause of national construction and defense in the 30 years of renewal. The Council voted to select 12 groups and 18 individuals who have outstanding achievements in the 30-year renewal process of the country initiated and led by our Party, contributing significantly to the construction. Socialism and national defense. The Vietnam Textile and Garment Group (VINATEX) was honored to be one of the 30 collectives and individuals honored this time with its achievements in bringing the Vietnamese brand name to the world market and export turnover of nearly USD 30 billion (ranked number 4 in textile and garment exporters in the world) and job creation for 2.5 million workers which make a great contribution to the gorverment’s budget. Speaking at the event, Prime Minister Nguyen Xuan Phuc emphasized that collectives and individuals honored are typical examples of dynamic and creative working spirit, daring to do, overcome difficulties and achieve high achievements in the field of activities and work. Contributing to boost national economy, creating jobs for millions of labors, making a great contribution to the national budget, building national brands and images in the region and the world.

 

Textile and apparel industry enhances internal capabilities, towards core values: Textile and garment industry is leading the country in terms of export turnover with proportion of 16%. According to many experts, textiles and garments have not yet been firmly established as most of them still produce and rely on imported raw materials. Therefore, in order to increase the competitiveness of the industry, it is necessary to improve the internal capacity, towards the core value. According to the General Department of Customs, in the first quarter of this year, the export turnover of the textile and garment industry in Vietnam reached over 5 billion 600 million, up 10% over the same period last year. The United States remains the largest market, followed by Japan, South Korea ... In the first two months of this year, the export surplus in the sector reached 50%. This shows that the strategy of diversifying commodities and diversifying export markets have been effective. If the textile and garment export growth in 2016 is only 9.2%, this year's results will be better than the expected with growth of over 10%. Up to this point, many enterprises have orders until the end of August. To ensure sustainable export, the industry needs to form the linkage chain of fiber, weaving, dyeing and sewing to create products with higher value by focusing on investment in the core sector selectively to avoid spreading. At the same time, it is important to focus on the domestic market, develop products that are appropriate to the demand of domestic consumers, build new brands and channel sales.

 

The hike of VietNam textile products penetrated the Russian market: In recent years, businesses of VITAS have received many orders of the Russian enterprises request to sew products such as jacket, jeans ... With the big demand by importing over USD 10 billion of textile and garment products each year and although Vietnamese garment still accounts for a small share in Russia, this is considered as a potential market for Vietnamese enterprises. Textile and garment industry is considered as the most beneficial sector when the FTA between Vietnam and the Eurasian Economic Union (EEA) comes into effect recently and this is expected to generate a big boost for exports to the Russian market. Textile and garment exports to Russia are expected to reach over $ 1 billion or 10% of the world market's capacity in the next few years. Currently, Vietnam exports only about US $ 320 million worth of textiles annually, equivalent to more than 2% of the market share. This is not commensurate with the potential of Vietnamese enterprises and the size of the Russian market. Mr Vu Duc Giang - President of VITAS said that Russia has a rather cold climate so the Russian market has a great demand for such items as jackets, jeans, T-shirts, khaki... These are the items that garment enterprises receive the most demand in recent years. However, the problem is how to import goods to the Russian market at the current competitive price. Because, the Russian economy is still difficult, the cost of exporting products to this market is not as good as the European Union market. Moreover, Mr Giang said that the geographic distance between Vietnam and Russia is quite far so it will be more difficult to do payment. Although BIDV branches have been opened in Russia for direct payment but in the future, if the volume of exports to Russia gradually increases then more branches will be needed to support direct payments.

 

Vietnam textile and apparel industry in the first quarter: good but unsustainable signals. From the beginning of 2017 to now with good signs from the market, textile and garment enterprises have been in stable order til the end of the third quarter 2017, confirm from experts in the industry. The textile and apparel exports this year will grow satisfactorily. Mr Le Tien Truong - Vice President of VITAS / General Director VINATEX said that in the first quarter of 2017, the textile industry is entering the second quarter with many good signals from the markets although it can not be said to be sustainable. In the first quarter of the year, export turnover reached US $ 6.75 billion, a growth rate of 12.4% over the same period last year. The special feature of the I / 2017 is that growth in traditional markets is not high, with the US and EU markets increasing only by 6.3% - 6.4%. But many new markets have had good signals which the Eurasian Economic Coalition has a growth rate of 115%; The ASEAN Economic Community (AEC) has seen growth in six markets: Thailand 17%, Indonesia 11%, Singapore 38%, Laos 24.5%, Cambodia 36% and Myanmar 5%. One of the traditional customers in Vietnam has maintained a high growth rate which is Korea with a growth rate of 14% in the first quarter. In addition, Brazil and India markets are at very good growth rate, up to 34%. From this it can be seen that the efforts of proactively accessing, exploiting and exploiting new bilateral and multilateral trade agreements have yielded results which come from the Asian Economic Coalition - Europe and the ASEAN Economic Community. Added to that is the specifics of the traditional items such as t-shirts, trousers continuing to grow well at 13% - 17%, veston up 15%, shirts and jackets grow by about 1%. Some new items with good growth in the first quarter were 29% swimsuit, 41% raincoat, 18% wind clothes and 31% towels. The emergence of new products and approaches to the market has been and continues to be a step by step leading to higher, more stable and less dependent on traditional markets as in previous years. Mr. Truong said that Q2 / 2017 is still in the forecast of DMVN industry with a growth rate of 10% and there are clear signs that this goal can be achieved. Whether the growth of 10% in the last 6 months will have to wait until May, June when the negotiation of completed orders, the new solution is clearer. However, with the general signal, Vietnam textile and apparel industry fully believes 10% target growth this year. Although the target is high, but with the efforts of the whole industry and the good concentration of resources, the industry can achieve this result.

 

Song Hong Garment Joint Stock Company was granted the priority of customs: Song Hong Garment Joint Stock Company is the newest enterprise in textile and garment industry recognized by the General Department of Customs in favor of customs. The priority application period for businesses is 3 years. After the above time limit, if the company meets the prescribed conditions, the extension of the preferential regime shall continue. According to the Customs Clearance Inspection Department, the General Department of Customs said that the country has 59 / 500.000 enterprises are prioritized in the customs field. According to the provisions of Circular 72/2015 / TT-BTC, enterprises entitled to preferential treatment must satisfy all 6 groups of conditions: conditions for complying with customs law and tax law; Conditions on export and import turnover (each year reached 100 million or more); Conditions of e-customs procedures, electronic tax procedures; Conditions of payment for export and import goods; Conditions on the internal control system and the conditions to well observe the law on accounting and auditing. With the decision to recognize the priority of customs, enterprises will enjoy many incentives such as: exemption of inspection of documents, exemption of physical inspection of goods; Clearance by incomplete declaration; Prioritize the order of customs clearance ...

 

More business opportunities with the United States: Businesses expect more business opportunities with the United States after Prime Minister Nguyen Xuan Phuc's visit. Statistics show that by the end of May 2017, US investors had a total of 838 valid projects with a total registered capital of more than $10,2 billion. The United States is currently the ninth largest country in the total investment in Vietnam. In addition to investment, over the years, the United States is one of Vietnam's leading trading partners. The United States is now one of Vietnam's largest export markets. In particular, while Vietnam is large trade deficit from some markets, the United States alone is the partner to help bring the largest trade surplus for our country in the past years. Le Quang Hung - Chairman of Garmex Saigon Garment Corporation said that the US is one of the leading export markets for garment exporters. Over the past few years, as demand from other markets has declined, the United States remains a positive market with many opportunities for growth. The US economy is recovering, helping VietNam textile and garment enterprises gain more orders and customers. Currently, the US market accounts for more than 50% of Garmex Saigon's export market share. "Partners and US clients often ask for transparency and fairness in the business process and their standards are quality products that meet the requirements of cooperation rather than acquaintance and relationship. The United States is a big market with a lot of potential and attractive opportunities for Vietnamese enterprises, especially in the context of their economic recovery, "said Le Quang Hung.

 

Commenced construction of a garment factory of 300 billion VND in Soc Trang: On 19 May 2017, Nha Be Garment Corporation - NBC Corporation held the commencement ceremony of construction of Nha Be Garment Factory - Soc Trang, the investment cost is 300 billion VND in Ward 7, Soc Trang City, Soc Trang Province. The project built on an area of 6 hectares which is equipped with state-of-the-art machinery and equipment that will provide jobs for 4,000 people. The project is divided into two stages: phase one construction is from now to February 2018 and the second phase will be built in 2019. The factory specializes in producing and trading high quality sewing products such as: veston, trousers, women's fashion, fashion accessories. It is expected that in the near future, the production capacity of the factory will reach 25 million to 30 million products per year and the export turnover is estimated at 90 million to 100 million dollars per year. When it comes into operation, the project will improve competitiveness, develop production and consumption potential, increase profits, create jobs for laborers, contribute to socio-economic development of Soc Trang province. NBC is one of the leading garment enterprises in Vietnam with 37 member units, nearly 30 thousand employees, run by more than 17,000 specialized machines and modern equipments, producing more than 6 million products per month; export turnover in 2016 reached $729 million, expected to reach $820 million by 2017.

 

The "open door" for Vietnamese textile and garment to enter the EU market: To take advantage of the opportunities provided by the FTA, Vietnamese textile and garment enterprises need to prepare resources to meet the requirements of this agreement. Protect the origin of goods. The Vietnam-EU FTA will come into effect in early 2018. And as a result, Vietnam's tariffs on garments exported to the European market will decrease gradually to zero in about 7 years. This will create opportunities for the Vietnamese textile and garment industry to expand and grow faster. But to take advantage of this opportunity, the textile and garment enterprises need to prepare resources to meet the conditions of the agreement that the goods must ensure the origin rules of goods. Europe is one of the big potential markets for Vietnam textile and garment industry with export turnover in 2016 to $ 3.5 billion (just after US market). Mr. Truong Van Cam – Deputy Secretary of VITAS said that origin rules are the most important factor in EVFTA. Accordingly, the textile and garment of VN must ensure the origin of Vietnam completely or must use raw materials of EU origin and countries with bilateral agreements with the EU. If Vietnam meets the regulations on these issues, Vietnam's textile and garment industry will develop in a more sustainable way. However, this is a weakness of the textile and apparel industry as it is too dependent on imported materials. Specifically about the fabric, domestic enterprises have to import up to 86% to serve production and export while the quality of domestic fabric has not met the requirements of the main export markets of textiles and garments.

 

TPP “weave” give more hope for the textile industry: 2016 was the most difficult year for the textile and garment industry in the past 10 years. Activities of the business became gloomy and dragged stock prices fall deep. The TPP negotiation failed causing Vietnamese textile and apparel companies face higher tax rates than other countries. In the European market, Vietnam is subject a tax rate of 9-12% but other countries like Cambodia, Laos or Bangladesh are 0%. However, the United States is still Vietnam's largest export market, accounting for more than 40% of its turnover and this market continues to grow in 2016. In 2017, many experts say that the difficulty for the textile and apparel sector still remains. However, social media have recently quoted from The Economist magazine mentioned about possibility for the revive of TPP. Accordingly, 11 countries in the TPP excluding the United States will once again meet in Hanoi and The Economist said that it could help revive the TPP. Although we can not hope much now but this event has created a positive response for businesses with this information. Most of the potential stocks in textile and garment have increased sharply of which in 10 codes are up with 8. In addition, many opinion believe that TPP is not everything because outside the TPP there is also the European Free Trade Agreement (EVFTA) which is expected to come into effect in early 2018 to help export to the EU and attract investment in fabric production. The EU is the second largest trading partner after the United States with exports accounting for 13% in the last two years. In addition to promoting trade, rules of origin on the fabric will be the driving force for businesses in the industry to remove bottlenecks in the fabric production of Vietnamese enterprises. Other FTA agreements with the European Union (AU-EAEU FTA) entered into force on 5 October 2016 and the Regional Comprehensive Economic Partnership (RCEP) is under negotiation will push up the growth of the textile industry. According to VITAS, the VN-EAEU FTA could help boost bilateral exports by 50% in 2017 and approximately 20% per year during 2018-2022. The difficulty is that the industry is exporting with simple apparel processing methods, accounting for approximately 70% and "bottlenecks" in the export of fabrics. Especially, enterprises lack motivation to improve the risk of TPP breakdown. Therefore, TPP is still the best lifebuoy for textile and garment industry. At the same time, businesses also need to improve themselves to develop by investing in plants and improving production capacity to reduce the rate of apparel processing or untangle knot at the fabric export.

 

Binh Duong Textile Association and the Textile Union of Binh Duong Province signed the Collective Labor Agreement. On 26 May 2017, Binh Duong Textile Association and the Textile Union Binh Duong province has signed the third collective labor agreement (CLA) of the textile and garment industry in Binh Duong. Mr Le Nho Thuong - President of Vietnam Textile Union and Ms. Nguyen Thi Tuyet Mai - Deputy Director of VITAS attended the signing ceremony. The third textile and garment industry sector in Binh Duong province has continued to inherit and promote the results of the first and second ones also adjust, modify and supplement the contents in order to make it more suitable and convenient. It is advantageous for many enterprises of the same industry to participate and pay more attention to differentiation and superiority in comparison between enterprises participating in the CLA and non-participating enterprises. Mr Le Hong Phoa - Chairman of the Textile Association Binh Duong and Ms Dang Thanh Van - President of the Textile Union of Binh Duong Province signed the 3rd CLA in the presence of delegates.

 

The YEN-D program (Young Entrepreneurs Network Development) season 3 was organized by the Department of Foreign Trade of Thailand in cooperation with Thammasat University & Thai Trade in CLMV countries in May 1977 in Thailand. The Vietnamese side is represented by 30 enterprises. The Thai side also has 30 enterprises. Most of them are young business owners or senior staffs with great need to find partners, to set up distribution channel to Vietnam and demand for raw materials from Vietnam to Thailand. After four working days, the models of teamwork, seminars, business-matching ... have been organized very dynamically and attractively which bringing a lot of cooperation potential for participating enterprises. The Vietnam Textile and Apparel Association is represented by three member companies, including Bao Minh Industrial Park, Sai Gon Garment Company No. 2, COMO Company.

Sourced by VITAS
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