Garment firms expect higher demand

Local garment and textile companies have a positive year ahead with most having export contracts until the 2011 second quarter.

Saigon 3 Garment Joint Stock Company, for instance, has signed orders worth a total of US$50 million to export millions of jeans to Japan in the first half of the year.

Thu Hong from the company’s sales department said export contracts in the first half of 2011 increased by 20 per cent both in volume and value compared to the same period last year.

Le Thi Thanh, deputy general director of Phuong Dong Garment Joint Stock Company, said the company also signed orders until the end of next May to export 5 million garment products.

“For a lot of orders, however, we must consider whether we can fill the contracts,” she told Tuoi Tre (Youth) newspaper.

Export contracts for next year at other large garment and textile companies such as Viet Tien, Nha Be, Phong Phu, Gia Dinh, Thang Loi, Thanh Cong and Viet Thang have also increased by more than 15 per cent.

Private garment companies are also no longer worried about a shortage of orders as in previous years.

Minh Chau Garment Company, for example, already signed contracts to produce 200,000 clothing products, ensuring jobs for more than 200 workers until the end of the first quarter, said Nguyen Thi My Linh, the company’s director.

Pham Xuan Hong, deputy chairman of the Viet Nam Textile and Apparel Association (Vitas), said the signing of long-term export contracts by garment firms had advantages and disadvantages.

“Long-term contracts create more job security for workers and give firms a basis for a stable production and trading plan,” he said.

“But garment firms can lose out if there is an export price increase so they should sign long-term contracts with agreed provision on the amount but the export price should set for every quarter,” he said.

Analysts say the demand for Vietnamese garment products has been increasing mostly from the US, EU and Japan markets. Many importers are switching their orders from other countries to Viet Nam, as they appreciate the consistency in the quality of Vietnamese-made clothes and the skill of its workers as well as reasonable prices and timely delivery.

The added value at many garment companies has also increased strongly this year since they used more domestically-made materials, experts said.

At Saigon 3 Garment Joint Stock Company, for instance, the company has spent only $25 million to import input material for production this year, a decrease of $10-15 million over last year.

Vitas chairman Vu Duc Giang said the garment sector this year was expected to earn more than $11 billion from export, after deducting the cost to import input materials, the sector was estimated to earn $4.5 billion, an increase of 18 per cent over last year. — VNS

Tags: Vietnam garment exports, Vietnam Garment industry