Businesses also face difficulties due to the deep reduction in unit prices, even by over 50%. Photo: Vinatex

Exports to major markets all decreased

On July 19, the Vietnam Textile and Apparel Association (Vitas) informed the situation of Vietnam's textile and garment industry in the first half of the year.

Accordingly, in 2023, the negative impact of the epidemic and political fluctuations in the world will cause global economic growth to continue to decline (in 2021, it increased by 6%; in 2022, it increased by 3%. 2023 is only about 2%). The textile and garment industry accordingly was affected by a decrease in orders from major markets such as the US and EU.

In the first 6 months of 2023, textile and garment export turnover was estimated at USD 18.6 billion, down 17.6% over the same period in 2022. Import turnover was estimated at USD 10.7 billion, down 20.5% and had a trade surplus with USD 7.9 billion; the same period in 2022 is USD 8.8 billion.

Notably, exports to major markets in the first 5 months of the year mostly decreased: the US decreased by 27.1%, the EU decreased by 6.2%, Japan increased by 6.6%, South Korea decreased by 2%, Canada 10.9% off...

“This deep reduction is not only due to the impact of the economy but also from the pressure of 'greening' the industry, the OECD, EU supply chain tracing directive and the German Supply Chain Appraisal Law (which came into effect) from January 1, 2023). Besides, although the State Bank has reduced the operating interest rate 4 times, but due to the high deposit interest rate from the end of 2022, the loan interest rate is still high; businesses do not have access to support packages, for example, reducing interest rates by 2% with the package of VND 40,000 billion ...", Vitas said.

The unit price can be reduced by more than 50%

According to Vitas, production and export are forecast to improve gradually, but difficulties will continue until the end of 2023, because many businesses have not had enough orders for the third and fourth quarters. Besides the lack of orders, accepting orders is not their strength; businesses still face difficulties due to the deep reduction in unit prices, even more than 50% reduction compared to normal.

In 2023, the entire textile and garment industry aims to reach USD 39-40 billion. To accomplish the goal, the Vietnam Textile and Apparel Association believe that businesses need to focus on three core issues. Firstly, find solutions to retain employees, especially the core force, Organizing vocational skills training classes, training human resources for green and digital transformation.

Secondly, retaining customers, accepting orders is not a strength, it is not profitable to have jobs for employees, avoiding loosing potential customers; building a reliable, long-term partnership, exploiting new markets and paying attention to the domestic market.

Third, minimize the unnecessary expenses of the business.

Vitas said that it will continue to perform well its role of connecting businesses with businesses, businesses with brands, businesses with the Government; actively cooperate with prestigious international organizations to implement programs on labor, green energy, recycling cycle, digital transformation, design, branding, human resource management...

At the same time, organize trade promotion delegations; create opportunities to learn, exchange experiences, find customers for businesses, and at the same time act as an effective bridge between state management agencies and enterprises of textile and garment enterprises, raising awareness of developing the industry in the direction of green - clean - sustainable.

Talking about the production and business situation in the first 6 months of the year and the forecast for the second half of the year of the Vietnam National Textile and Garment Group (Vinatex) taking place at the end of June, Mr. Cao Huu Hieu, General Director of Vinatex shared that in the last months of 2023, it is forecast that Vietnam's textile and garment industry will still face many difficulties with a sharp shortage of orders and high input costs. The main export markets have not recovered while fierce competition is still taking place in the domestic market with the participation of many foreign brands and enterprises...

Facing these challenges, Vinatex continues to flexibly respond to volatile and uncertain movements of the market, regularly forecast and quickly update the situation of the world and domestic textile and garment market, giving priority to maintaining its strength of labor force on the basis of balance between employment and income, preserving human resources to be ready to catch opportunities when the market recovers; continue to invest in the direction of greening textiles…