Garment enterprises run out of orders

The production manager at a textile enterprise in HCMC’s Thu Duc City said last year his company had to pick and choose orders to sign contracts, but now has orders only for this month.

Cao Huu Hieu, general director of the Vietnam National Textile and Garment Group (Vinatex), said the situation in the first few months of this year has been very bad. The values of many orders were reduced by 2-3%.

Group companies only have orders for until April, while last year they had them for until December, he said.

Pham Xuan Hong, chairman of the Ho Chi Minh City Textile and Garment - Embroidery Association, said major markets such as the U.S. and Europe have not shown signs of recovery.

Hieu said the global market could fall from US$750 billion to $712 billion, even $687 billion, this year, making it an extremely difficult period for the industry.

Securities company VnDirect expects China's reopening to pose a challenge to textile companies this year. China is currently Vietnam's main competitor in the US market.

According to data from the U.S. Office of Textiles and Apparel, textile and garment imports from China last year topped $132 billion, or 26% of all imports, making it the largest supplier. Vietnam followed with a 14.9% share.

Tuan said his company is accepting orders at low prices, even below cost, to keep its customers and employees.

"We expect the market will recover in the second half of the year to compensate for the first."

In Vinatex’s case, the group is planning to ensure there are cash flows and feedstock for when the market eventually picks up.

It is reducing redundant processes and seeking modern technologies for smart production with low costs but high productivity.

According to the chairman of the Vietnam Textile and Apparel Association, Vu Duc Giang, for the textile and garment industry to grow sustainably, investment in raw material supply chains is necessary, as are FOB sales solutions (purchase of raw materials, production, semi-finished products) and ODM (design and manufacture as ordered).

Vietnam would benefit greatly from the largest textile and garment exhibition ever held in Ho Chi Minh City on Wednesday, he said.

It featured hundreds of booths displaying smart devices made by 1,300 companies from 21 countries and territories.

Globally buyers are changing, not just demanding high quality but also rapid supply, meaning manufacturers require sophisticated equipment to meet their needs.

Analysts forecast the textile and garment market to recover slightly in the second quarter, but Vietnam will face stiff competition from Bangladesh, India and China.

But the yarn market is still looking bleak.

Garment exports for January-March fell 17.4% from a year earlier to $7.2 billion, according to the General Statistics Office.