Follow market trends
In 2021, Vietnam's textile and garment industry surpassed Bangladesh and rose to the second largest exporter in the world. However, this position did not last long, since 2022, Bangladesh has surpassed it and Vietnam has been pushed back to third place. There are many reasons, but most enterprises, the Vietnam Textile and Apparel Association and the Vietnam Leather, Footwear and Handbag Association all admit that Vietnam 's production costs are higher. In addition, the fact that most textile and garment projects in Bangladesh have promptly achieved global "green" certificates such as ESG (environmental, social and governance index) and LEED (energy and environmental design) standards has helped the country's fashion industry stand firm in the current difficult period.
Green transformation is an urgent need for textile, garment and footwear businesses.
Mr. Diep Thanh Kiet, Vice President of the Vietnam Leather, Footwear and Handbag Association (LEFASO), said that developing a green and circular economy is a global trend and the responsibility of each enterprise. The European Union (EU) has included these standards in the Carbon Border Adjustment Mechanism (CBAM) law. This mechanism is currently only applied to imported goods with high pollution risks such as steel, cement, fertilizer, aluminum, electricity and hydrogen; then it will be expanded to other goods. And usually after the EU implements it, the US and Japan also apply it. These are all major export markets of Vietnam , so enterprises are required to implement it if they want to continue exporting to major markets.
"But to transform, it takes time and state policy because it is a comprehensive, policy-based issue; for example, energy, labor, resources, etc. Currently, green and circular economy is an inevitable global trend. It requires us to take practical actions that are consistent with that trend; it is no longer an encouragement but has become mandatory. The EU has put it into law. Taking action in line with that trend is to protect the legitimate interests of the nation and the development of the country," said Mr. Diep Thanh Kiet.
According to Apparel Resources, Bangladesh currently has the highest number of LEED-certified factories in the world, with 67. Notably, Bangladesh has been very focused on compliance over the years. The country has established two monitoring bodies, the Bangladesh Fire and Building Safety Accord and the Bangladesh Coalition for Workplace Safety. Both have 1,600 and 666 factories, respectively.
Agreeing, Mr. Tran Nhu Tung, Vice President of the Vietnam Textile and Apparel Association, also said that the issue of wages and workers in Vietnam will not change because it will only increase, not decrease. Thus, to increase competitiveness, the only way is to build green, clean factories according to the requirements of partners as well as implement digital transformation, increasing operational efficiency. Almost all textile and garment enterprises are aware of the need to achieve green certification for factories to meet the new regulations of many markets. However, it is not easy to do so. Especially the number of small-scale enterprises that make up the majority of the industry do not have capital to invest.
Therefore, Mr. Tung suggested that to increase the competitiveness of the industry, the government still needs support. For example, it is possible to consider introducing a program to encourage businesses to implement such as when they have a global green certificate, they will have their corporate income tax reduced from 20%/year to 18%/year for a period of time. Or the government needs to have a policy to apply to textile and garment enterprises an investment loan package with a more preferential interest rate than the normal loan interest rate on the market.
Urgent benefits for the business itself
For many large enterprises, the process of changing to green criteria has been gradually implemented. For example, the Vietnam Textile and Garment Group said that in the past 2 years, it has begun to develop industrial parks with investment in dyeing and weaving with green standards to close the supply chain. Or the leader of Thanh Cong Textile - Investment - Trading Company also said that it has been allocating about 10% of its profits each year to invest in this process as well as digital transformation...
According to Dr. Nguyen Quoc Viet, Deputy Director of the Vietnam Institute for Economic and Policy Research (VEPR) under the University of Economics (Vietnam National University, Hanoi), the textile and footwear industries have achieved many successes in the period before and even during the Covid-19 pandemic. However, from enterprises to foreign direct investment companies, all have small investment projects and low-medium basic technology. Even changing energy inputs has encountered many obstacles, limiting the number of projects switching to renewable energy. Since then, both industries have encountered difficulties when the global trade chain has requirements to prove green production and use of renewable energy.
Not to mention the increasing production costs in Vietnam , especially compared to competitors with similar development levels in the past. Since then, the competitiveness of the textile and garment industry has shown signs of decline, most clearly in not being able to maintain the second largest export position in the world. Therefore, in-depth research is needed to clearly identify the factors limiting competitiveness and the factors pushing up input costs, from which appropriate solutions can be found.
Mr. Diep Thanh Kiet, Vice President of Vietnam Leather, Footwear and Handbag Association
Economist Vo Tri Thanh emphasized that green transformation to meet market demands is not really something new for Vietnamese enterprises. Previously, markets already had requirements for green label and eco-label products. But when the market was still good, the pressure to transform was not great and the awareness of enterprises was not really full. Now, facing difficulties, the demands of the market are also stronger and higher. Countries, especially the EU, have started to do it for real and put those standards into law and have a system to monitor the entire supply chain. So the problem here is that our awareness is not good enough to transform in time with the market. Some Vietnamese enterprises have also transformed well, keeping up with the development trend; most of the remaining enterprises must quickly transform.
According to Dr. Vo Tri Thanh, green transformation is no longer a slogan but has become a vital benefit for businesses. Therefore, the best and fastest solution is to link up with service providers to support us to easily and quickly meet market standards. With the rapid development of science and technology and digital transformation, this is both an advantage and a challenge in the transformation process. If businesses can apply these advances well, it will help the process of transforming the current growth model to a green economy more quickly. In addition, for a successful transformation, the role of the state is also extremely important in leading, providing information to the market, and developing relevant policies.
At COP26, Prime Minister Pham Minh Chinh made a commitment that Vietnam strives to achieve net zero emissions by 2050. In recent times, energy policy, specifically Vietnam 's Power Plan 8, has also shifted strongly towards prioritizing green development. These are important policy changes to gradually promote and support Vietnam 's green growth. We still need more positive transformational policies like this.
Source link
Comment (0)