TOUGHER COMPETITION FOR APPAREL SECTOR AHEAD

In fact, apparel enterprises have seen competition intensifying in recent times. Some producers performed well in 2014 but have failed to win contracts this year while their employees have left for bigger firms.

“Despite preparations since 2013, we’ve faced cutthroat competition since last year,” Dung said.

He noted that apparel exports have been swelling, from US$25 billion in 2014 to an estimated US$28 billion this year, but some companies have won less orders than expected over the past months, including foreign-invested enterprises.

Dung suggested local companies manage to participate in the value chains to take advantage of the country’s deeper integration into the world; otherwise, they will have to close or sell their factories.

Around 30,000 textile and garment companies have generated jobs for a large number of local laborers and contributed around 15% of the nation’s total export revenue. Vietnam is among the top five apparel exporting countries by volume.

Nonetheless, Vietnam is still heavily dependent on material imports.

Vinatex general director Le Tien Truong said the sector aims to raise its outsourcing ratio to 50% by 2020 compared to 38% currently. The localization ratio targets are 60% this year and 70% in 2020 versus around 50% last year.

Vietnam’s textile and garment industry targets exports of US$50 billion by 2020.

Truong said as the nation needs to import over US$12 billion worth of material each year, there is huge potential for the investors of material production on the domestic market.

According to experts, foreign enterprises are speeding up investments in the sector to take advantage of the upcoming FTAs, including the Trans-Pacific Partnership (TPP). Many companies from China, Hong Kong, Taiwan, Japan and Korea have spent big on garment and textile projects this year.

With around 650 local and foreign enterprises taking part, the four-day expo at Tan Binh Exhibition & Convention Center in Tan Binh District lasts until Sunday.

Source: Business Times