In 2024, with a turnover of 44 billion USD, a growth of nearly 11% compared to 2023, Vietnam is likely to surpass Bangladesh to become the world's second largest textile and garment exporter.
Winning with unexpected order shifts
On the morning of December 25, in Hanoi, Vietnam National Textile and Garment Group (Vinatex) held a press conference to inform about production and business activities, labor movement in 2024 and activities to take care of Lunar New Year 2025.
Mr. Cao Huu Hieu, General Director of Vinatex, said that in 2024, in the context of the world situation continuing to fluctuate unpredictably, causing many difficulties for businesses in organizing production, the Vietnamese Textile and Garment industry still maintained a fairly good growth rate. With the experience gained through the storms of 2022 and 2023, the Vietnamese Textile and Garment industry is expected to reach the export milestone of approximately 44 billion USD, an increase of nearly 11% compared to 2023.
The world textile market began to show signs of recovery from mid-year when major central banks such as the FED and ECB cut interest rates and employment and people's income improved. It is estimated that in 2024, the total demand for textiles and garments in the world will reach about 794 billion USD, an increase of nearly 3% compared to 2023, but still 8% lower than in 2022. For the Vietnamese textile and garment industry, although the market in the first 6 months of 2024 was better, it was still a difficult and quiet period of 2023. In the last 6 months of the year, orders to Vietnam increased dramatically due to unexpected political fluctuations in competing countries.
Faced with new market developments, the Vietnam Textile and Garment Group has promoted many solutions to maintain and promote production and business activities, and welcome the return of orders. In particular, the garment industry has maintained its growth momentum with production and business efficiency clearly improved since the third quarter of 2024, with no unit suffering losses in 2024. The yarn industry has reduced losses by 90% compared to 2023, but still faces prolonged difficulties leading to ineffective production and business.
"With determination and many positive innovations in operations, improving competitiveness and labor productivity in the entire system, Vinatex has preserved its core resources of labor and customers, overcoming difficulties in 2024 with consolidated revenue estimated at VND 18,100 billion, equal to 102.8% compared to 2023; Consolidated profit estimated at VND 740 billion, equal to 137.5% compared to 2023; Average income reached VND 10.3 million/person/month, equal to 108.9% compared to 2023. According to preliminary statistics, the 13th month salary and Tet bonus for employees in the system are estimated at an average of more than VND 18 million/person, equivalent to 1.5 - 2 months' salary", said Mr. Cao Huu Hieu.
Sharing more about the difficulties in 2024, Mr. Cao Huu Hieu said that in the first and second quarters of this year, the situation of the Vietnamese textile and garment industry is still very difficult. Objective factors are that the world economy continues to decline, inflation increases; political instability continues to exist... In addition, textile and garment demand does not increase, orders for the garment industry continue to be small orders, with strict requirements on quality and fast delivery time. Notably, the unit price of the garment industry in the first 6 months of the year is still very low compared to the unit price of 2023.
For the yarn industry, the market is still gloomy, the selling price is below the cost price, although it has improved a little but still makes a loss. However, in the second half of the year, there was a sudden reversal. According to Mr. Cao Huu Hieu, that reversal was not due to the improvement of the market or strong increase in demand, but most importantly, it came from the "luck" of shifting orders. Some of Vietnam's textile and garment competitors' markets are experiencing political instability, typically Bangladesh, leading to customers shifting orders from Bangladesh to Vietnam. Vietnam is one of the priority markets for shifting orders.
“Bangladesh is a major export market for general orders, so when orders are shifted to Vietnam, the unit price does not improve much. However, the number of orders is much larger. Vietnamese garment enterprises in general and the group in particular are almost full of orders from July to December 2024. Many units have orders until the end of the first quarter of 2025, and some units even have orders until the end of April and May 2025,” said Mr. Hieu.
Regarding the fiber industry, Vinatex leaders shared that with many drastic solutions in production management, cost reduction, flexibility in converting products and searching for some niche markets, differentiated products..., the fiber industry has clearly improved in the second half of the year. This year, the fiber industry is expected to lose 100 billion VND, while last year it lost more than 700 billion VND.
Many good prospects for 2025
According to Mr. Hoang Manh Cam, Deputy Chief of Office of Vinatex Board of Directors, compared to competitors, Vietnam has achieved the best growth rate, at over 10% and it is expected that by the end of 2024, total export turnover will reach nearly 44 billion USD.
“With this result, Vietnam surpassed India in terms of textile and garment export growth rate when this country reached nearly 7%. China had a total export turnover of 273.4 billion USD in 11 months, an increase of only 2%; its rival Bangladesh saw a decrease in export growth and only exported 27.7 billion USD,” Mr. Hoang Manh Cam informed.
Commenting on the textile and garment market and export prospects in 2025, Mr. Hoang Manh Cam said: "The growth signal is better when the main import markets such as the US and EU recover economically, people's spending needs improve with better prospects for the textile and garment industry. Therefore, the export forecast for the first half of next year is positive."
However, experts in this industry also acknowledge that although political turmoil is affecting Bangladesh, this country is also recovering export orders quickly, because textiles are a major contributor to their foreign exchange exports.
Therefore, in the long term, next year there will not be much room to exploit orders shifting from this country, not to mention that most of the orders flowing in from next year will not have much room to exploit textile and garment sources, all of which are of low value. In addition, textile and garment enterprises are also 'eagerly' following US policies after US President Donald Trump took office. Accordingly, the US may implement a new tax policy with China of up to 60%, some countries from 10-20%. With that possibility, Vietnam may be subject to an additional 10% tax on goods exported to this market.
"The US's imposition of additional taxes will make textile orders from China more expensive than usual and this is a good opportunity for competitive countries, including Vietnam, to take the lead in orders shifting from China if they comply with requirements on origin," said a Vinatex representative.
Regarding textile and garment exports in general next year, Vinatex forecasts that the total world textile and garment demand in 2025 will reach 850 billion USD, and Bangladesh's textile and garment exports may recover from July 2025. Vietnam's textile and garment exports next year may reach 45.5 - 46 billion USD, an increase of 5 - 6% compared to this year.
Source
Comment (0)