Want to be in the loop?
subscribe to
our notification
Business News
APPAREL EXPORT TARGET SEEN UNOBTAINABLE IN 2016
Again, the growth was mainly driven by foreign direct investment (FDI) firms while domestic peers struggled to find new orders in the period.
VITAS forecast finding new orders would continue to be tough and that some small and medium enterprises could be forced out of business. If the situation does not improve, the industry would find it hard to obtain outbound sales of US$29 billion this year.
Giang said Vietnamese enterprises are not as competitive as exporters from other parts of Asia.
Cambodia and Bangladesh enjoy tariff incentives offered by the U.S and Europe while wages in Myanmar, Bangladesh, and Sri Lanka are lower than in Vietnam. Recently, China has also lowered social insurance premiums from 20% to 18% in the context that many of its textile and garment companies have been shuttered.
There are signs of buyers shifting their orders from Vietnam to other countries to benefit from lower costs, Giang said.
Global economic woes are presenting an extra headwind to the industry. Particularly, many UK textile and garment enterprises operating in Vietnam have plans to shut down following the Brexit vote to leave the European Union last month.
Speaking at the press conference, VITAS vice chairman Nguyen Xuan Duong pointed out three main negative factors for the local textile and garment industry.
First, Vietnam’s foreign exchange policy has kept the Vietnamese dong currency stable compared with the U.S. dollar while the currencies of major markets such as the EU, Japan and China have fallen by 8-18% against the greenback. At the same time, ASEAN countries, India, and Bangladesh have seen their currencies down by 10-20%.
The annual region-based minimum wage raise has also sent production costs of local textile and garment firms up and undermined the competitiveness of Vietnamese garments.
Besides, lending rates of 8-10%, two to three times higher than in other countries that are Vietnam’s apparel export rivals, have placed another financial burden on local companies. As a result, prices of Vietnamese textiles and garments are 20-30% higher than in other countries.
Source: The Saigon Times
Related News
![Card image cap](/uploads/Promotion news/2024/Promo/Untitled%20design%20%281%29.png)
XIN CHÀO HÀ NỘI: CROSS-BORDER GROWTH WITH E-COMMERCE AND DIGITAL SOLUTIONS
UOB Vietnam organize the "Xin Chào Hà Nội: Cross-border Growth with E-commerce and Digital Solutions" Programme with the desire of to help businesses equip themselves with knowledge on how to apply relevant technologies in developing cross-border e-commerce strategies.
![Card image cap](/uploads/news/Industry%20zone4.jpg)
VINH PHUC TO DEVELOP 24 INDUSTRIAL PARKS BY 2030
According to the plan endorsed by the Prime Minister of Vietnam, Vinh Phuc province is set to establish five new industrial parks by 2030, increasing the total number of parks to 24 and expanding the land area to 7,000 hectares.
![Card image cap](/uploads/news/F%20%26%20B.jpg)
30,000 F&B OUTLETS SHUT DOWN IN FIRST SIX MONTHS OF 2024
As of the end of June, Vietnam had around 304,700 F&B stores, down 4 per cent compared to the same period last year. More than 30,000 stores have closed nationwide, with a limited number of new openings, according to market analysis by iPOS.vn.
![Card image cap](/uploads/news/Investment7.jpg)
MINISTRY DRAFTS PROJECT ON HUMAN RESOURCES DEVELOPMENT FOR SEMICONDUCTOR INDUSTRY
MPI Deputy Minister Nguyen Thi Bich Ngoc said that the building of the project is crucial, especially in the current period. She said that the ministry has collected opinions from ministries, sectors, localities, research institutes, and universities while listening to ideas from domestic and foreign experts.
![Card image cap](/uploads/news/Finance%208.jpg)
CROSS-BORDER E-COMMERCE TO BE BOOSTED
As Vietnam is an export-oriented economy with abounding potential for the development of textile apparel, footwear, rice and agricultural products, the room for cross-border e-commerce development proves enormous, Anh added.
![Card image cap](/uploads/news/Port%204.jpg)
LOGISTICS GROUPS BRANCH OUT FOR GAINS
Deputy director Tran Hong Kien said, “In the next five years, our revenue and profit are expected to grow continuously on an annual basis at an average rate of about 11 and 23 per cent, respectively. Return on equity is expected to reach about 14 per cent a year on average. This is a good performance compared to other companies in the same industry.”