The garment industry has orders until the end of the third quarter of 2024, but unit prices are still low. In the photo: textile workers working in Thu Duc City, Ho Chi Minh City - Photo: QUANG DINH
Notably, Vietnam has surpassed China to lead the market share of garment exports in the US, and has the highest growth rate among the top 3 largest textile and garment exporting countries in the world.
Shift of orders from other countries to Vietnam
Specifically, there was a bright spot in exports to the US market when Vietnam’s textile and garment sector rose to the top of the garment export market share, reaching 6 billion USD and increasing by 4% over the same period. With this result, Vietnam surpassed China and ranked first in growth rate among the three largest textile and garment exporting countries in the world.
In the first 5 months of 2024, China's textile and garment exports to the world reached 66 billion USD (down 2%), with exports to the US alone reaching only about 6 billion USD. Bangladesh's exports in May 2024 decreased sharply, by 16%.
However, Vinatex said that this growth was not due to improved global consumption demand, but mainly due to the shift of orders from other countries to Vietnam and the exchange rate advantage when VND depreciated 5% against USD.
Garment companies have orders until the end of the third quarter of 2024 and are negotiating for the fourth quarter - the peak production season for Christmas and New Year orders. However, unit prices are still 20 - 50% lower than in 2019.
For the fiber industry, export orders to major markets such as China, Türkiye, South Korea, etc. have approached the break-even point. If production costs can be reduced, profits can be achieved.
Mr. Cao Huu Hieu, General Director of Vinatex, said that the textile picture in 2024 is brighter than in 2023. In the first 6 months of the year, all employees in the group still maintained their workforce and income equivalent to 2023. This is a very happy thing because when there is a market, businesses immediately have the workforce to produce and retain customers.
Convert products to increase exports
Faced with fierce competition in the market, many businesses in the fiber industry have had to flexibly switch to blended and recycled fiber products, which are not their strengths, to find new directions in niche markets besides traditional cotton fibers. At the same time, units have stepped up their search and development of new markets to balance and reduce dependence on traditional markets, upgrade to ensure the level of automation, research new products, and master technology...
It is forecasted that in the last 6 months of the year, textile and garment demand in major markets will not improve, while competing countries may devalue their currencies by 15-20%. Vietnamese enterprises will face competitive pressure on prices in the context of rising production costs. Shipping costs, wages, electricity bills, bank interest rates, etc. are forecast to continue to increase, which will directly impact the production and business performance of enterprises.
Mr. Cao Huu Hieu said that the positive export orders to the US are thanks to the investment of many businesses. For example, at Vinatex, in the first 6 months of this year, the group has cooperated with the British Coats Group to produce fire-resistant fabrics, so in July, the first product will be exported to the US.
"This is the group's first strategy to enter a narrow and specific product segment of flame retardant and fire-resistant fabrics. This product has a large demand, but the technical requirements are very strict. In the future, we will continue to research special clothing for rescue and firefighting forces, but this is a long-term program that requires a huge investment," said Mr. Hieu.
Accordingly, in July, Vinatex will put into operation the group's new product development center. This is a modern, well-invested center, specializing in FOB goods (purchasing raw materials, selling finished products), focusing on developing the strategic knitting chain that has been shaped in the period up to 2025.
"Currently, we have enough yarn, dyeing, and sewing, but the design stage with Vietnamese brands, aiming to sell the whole package to customers from design to materials and production, has not been done yet. Therefore, this center was invested in 2023 and will be put into operation in July. This will be a highlight in production and business to key markets," said Mr. Hieu.
Source: https://tuoitre.vn/viet-nam-vuot-trung-quoc-dan-dau-thi-phan-xuat-khau-det-may-vao-my-20240623111124624.htm
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