The domestic textile and garment industry is expected to reach its export revenue target of 40 billion USD this year despite facing many difficulties, said Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS).

Illustrative image (Photo: VNA) 

To achieve this target, the industry needs export value growth of at least 11-12 percent for the rest of the year, he said.

According to the association, growth reached only 9.1 percent in the third quarter, much lower than the same period in 2018. However, it was higher than other textile producers including China, India and Bangladesh.

The association hopes textile enterprises will be able to deliver big orders to push export value up in December.

The most important thing is for textile and garment enterprises to search for markets, orders and alternative partners. Currently, the businesses can take advantage of the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) to promote export expansion to some markets in the EU as well as Canada and Australia.

Canada holds a lot of potential for Vietnam with import value of textiles and garments reaching more than 13 billion USD each year, while Vietnam’s textile and apparel exports to this market reach only about 550 million USD per year.

Vietnam does not have a free trade agreement (FTA) with Canada so the CPTPP opens the door for the Southeast Asian country’s textile and apparel products. Businesses need to seize this opportunity and seek partners in Canada.

Than Duc Viet, General Director of Garment 10 Corporation, said to achieve export success, enterprises need to be aware of requirements on price, quality, quantity and production time. Moreover, they must also ensure production stability.

At the same time, enterprises should cooperate with each other through affiliate programmes and support from the association to meet the rules of origin stated in FTAs.

Enterprises, especially small businesses, should build a production chain to meet the demand of large contracts in terms of quantity, quality and time of delivery, as well as to create a name for themselves.

In recent years, the textile and garment industry has developed strongly and exports have grown year by year, according to VITAS. However, it still faces many challenges in production and business, such as low labour productivity, lack of high quality human resources and mainly processing products rather than manufacturing them.

In addition, challenges from export markets have also put pressure on them, including increasing protectionism, higher quality demands, and environment and technical tests.

According to association, local apparel producers are facing falling export orders. Since mid-2019, some businesses have been able to sign export contracts for small quantities each month. Meanwhile, in the same period last year, many large enterprises had export orders stacked up till the end of the year.

Cao Huu Hieu, CEO of the Vietnam Textile and Garment Group (Vinatex), said most textile and garment businesses did not have enough orders to keep them operating until the end of the year.

Large businesses such as Garment 10 Corporation, Duc Giang Garment Joint Stock Company, Hoa Tho Textile Garment Joint Stock Corporation, Hanoi Textile and Garment Joint Stock Corporation (Hanosimex) had export contracts to maintain production until November, but only Viet Tien Garment Joint Stock Company was going to be busy until the year-end.

Hieu said given the current situation, the industry would find it difficult to reach the export target of 40 billion USD this year.