Mr. Truong Van Cam, Vice President and Secretary General of the Vietnam Textile and Apparel Association (VITAS), reiterated that from the end of the third quarter of 2022, the manufacturing and business situation of many other economies and many other economic sectors in the country. including textiles got into a difficult situation. Even more difficult than the Covid-19 period.

Fragmented ORDER, 50% OFF the PRICE

In the fourth quarter of 2022, textile and apparel exports reached just $8.7 billion – down 15% compared to the average of the previous three quarters. In the first 5 months of 2023, the lack of orders and falling prices had a strong impact on companies.

Statistics from Vitas show that Vietnam’s total textile and apparel export revenue is estimated at US$14.422 billion in the first five months of 2023, down 21.42% from the same period in 2022.

In May 2023 alone, Vietnam’s total Textile & Garment Export Revenue was valued at US$2.780 billion, down 8.73% from the previous month and down 27.16% from the same period last year.

The total import sales of textile and clothing materials reached US$8.782 billion in the first five months of 2023, down 21.6% from the same period in 2022.

Mr. Cao Huu Hieu, director general of Vietnam National Textile and Garment Group (Vinatex), also said the situation is very difficult for all industries. According to the General Ministry of Customs, up to six-sevenths of Vietnam’s top export industries, with sales of more than US$5 billion, fell in the first five months of 2023, with the sharpest decline seen in electronics and telephone assembly. Wood processing, aquatic products, textiles, leather and shoes.

In particular, for Vinatex, the yarn industry and the garment industry are the two main areas facing the greatest difficulties.

For the yarn industry, difficulties continued from the third quarter of 2022, peaked in the fourth quarter of 2022 and lasted until June 2023. The reason lies in the low demand, the price fell because the price of cotton (the main raw material of the spinning industry) is constantly fluctuating up and down and now it is falling very sharply compared to the same period in 2022. Yarn companies suffer losses and large inventories. While maintaining production at the same time.

For the garment industry, from the fourth quarter of 2022 and the first six months of 2023, small and fragmented orders. “Never before have clothing companies with several thousand employees had to take orders for 500 to 1,000 jackets as they do now. Companies have to do it because if they don’t, customers won’t know about it and there won’t be any orders,” Mr. Hieu said.

Even the goods that don’t suit you still have to be processed: knitting to knitting, knitting to weaving; If there is no order for pants, they get an order for a shirt… To make a good backhand, companies need to invest in more machinery and equipment and train workers in skills, otherwise workers have to quit.

From April 2022 to now, the companies that produce knitwear have had almost no orders. Due to the 2020-2021 epidemic period, customers are only working from home. Therefore, when consumption is large, companies focus mainly on the production of this item. Therefore, knitwear of all brands worldwide have large stocks from 2022 to now.

In addition, the unit price has also dropped dramatically. In fact, many units currently have the garment industry processing prices with a code reduction of up to 50% compared to the same period last year. A shirt used to cost $1.7-1.8, now it’s only 85-90 cents.

Not to mention that when it’s difficult, many other difficult factors come into play. After processing, customers delay receiving goods, causing instability for companies with cash flow problems and product stocks cannot be exported immediately. Customers have more demanding requirements…

The government must return support packages

The textile and fashion market is forecast to still face many difficulties during the remaining months of 2023. Total global textile and apparel demand is expected to reach about US$700 billion, down 8% from 2022 and less than all of 2020 when the Covid-19 epidemic broke out.

In addition, there are strict requirements from brands, such as reduced production costs, small order quantities, fast delivery times, higher quality requirements, conversion of fabrics with recycled fibers, etc.

Vietnam’s textile and garment industry is also expected to face many difficulties due to severe shortage of orders and high production costs. The main export markets have not recovered, while the domestic market is still facing fierce competition involving many foreign brands and companies.

Faced with these challenges, Mr. Hieu said Vinatex will focus on key solutions such as promoting market forecasting, support and guidance to enable units to proactively plan production.

At the same time, we closely monitor the financial situation of the units, stabilize the cash flow and ensure the liquidity of the companies. Prioritize workforce retention based on the balance between employment and income, and ensure the workforce is ready to seize opportunities when the market recovers.

The good news, according to Vinatex’s general director, is that despite these difficulties, all employees (almost 63,000 employees) of the group still have a job, no entity has to lay off employees and still maintain their income. imported over 9 million VND/month in the whole system.

In addition to retaining employees, companies organize their production flexibly and react to small orders that change quickly, with difficulties and under time pressure.

The apparel industry is flexible in converting items to ensure orders meet market demand. The yarn industry is exploring new items and new markets to catch the trend. Simultaneous development of technologies and techniques for the textile dyeing industry to improve product quality; Focus on green criteria, clean production, raw materials and circulating products…

Mr Cam also acknowledged that there had been no positive signs of business recovery in the final months of the year. Therefore, the government must resume business support packages to recover post-Covid. It is necessary to review the use of the business support packages, focusing on the best possible support for the businesses.

The government has introduced many measures to support businesses, but there are still many issues that need further promotion. For example, the VND 40,000 billion support package to support the 2 percent interest rate is still blocked.

The National Assembly resolution said: “Support only for companies that can recover,” according to Mr. Cam. Such a regulation makes implementation more difficult for both companies and commercial banks. It is therefore recommended that this regulation be amended to make it easier for difficult companies to access the support package.

In addition, Mr. Cam suggested lowering the lending rate so companies would have less cash flow difficulties. In addition, the state should focus on supporting workers and helping companies find ways to retain workers.

For example, residual funds such as union expenses – the part that the company pays – should be left to the base union to take care of the employees. Or the pension and death fund should continue to be halted or extended, delaying the closing time so companies have cash flow for production and business…