Vietnam’s apparel and textile sector is expected to face a range of hurdles this year as firms look to make progress amid the negative impact caused by the novel coronavirus with annual export turnover poised to decline by 15% to only US$33 billion, according to the Vietnam Textile and Apparel Association.

Obstacles could slow progress for the apparel and textile sector this year

Indeed, the first quarter of the year saw the sector’s export and import turnover fall by 9.07% and 16.59%, respectively, resulting in a 0.62% decline in the annual trade surplus.

Cao Huu Hieu, Managing Director of the Vietnam Textile and Garment Group (Vinatex), said the travel restrictions implemented by European and North American countries have led to the cancellation of many orders whilst severely slowing down new orders. As a consequence, the group’s revenue has decreased by 7% on-year. 

Hieu added that the disruptions in the global supply chain have made it difficult for local firms to optimise production, resulting in high production costs. He predicted global textile and garment orders would fall by 29%. 

In the face of these challenges, a number of garment businesses have shifted to produce items for the health sector due to a sharp increase in epidemic prevention activities. 

Most notably, Garment 10 Corporation has recently signed a contract to export 400 million masks valued at US$52 million. 

Moreover, Vinatex has also stepped up its export of three-layer and antibacterial cloth masks to European countries such as the Czech Republic and Hungary, in addition to North American nations such as Canada and the United States.

The Vinatex representative said the group is capable of meeting large export orders as current production capacity stands at between 90 million and 100 million masks per month, adding that this represents an effective solution to help workers secure jobs following the recent economic downturn. 

Despite these positives, Hieu has urged domestic businesses to devise proper strategies that can be implemented in the near future due to European and US importers often placing stringent requirements on imports in terms of health, safety, and environmental protection, which can contribute to additional costs for local enterprises.