Garment industry to ride crest of wave

Following the Lunar New Year, businesses nationwide have commenced production in a big way. With positive signs, it is predicted that 2011 will continue to be a successful year for the garment and textile sector, Vietnam New Agency talks with Vinatex deputy general director Le Tien Truong about the market climate.

Can you elaborate on the atmosphere in the garment and textile sector as well as businesses in the Viet Nam Garment and Textile Group (Vinatex)?

Since the beginning of 2011, there have been relatively positive signs for the garment and textile sector for the first and second quarters, thanks to previously signed purchase orders. Businesses under the group have been manufacturing since February 8, around two to four days earlier than last year.

Does Vinatex have any plans or targets to help develop small- and medium-sized enterprises?

To become more competitive, the sector needs to closely co-ordinate to generate a supply chain from A to Z. Vinatex will be at the core of the development of this supply chain, supplying raw materials and distributing purchase orders to small-and medium-sized enterprises.

In this way, I believe that the group will further enhance the capacity of the garment and textile sector. It will benefit the group and help provide sustainable jobs for workers while gradually raising incomes and productivity as a whole.

Around 30 to 40 per cent of the group’s work is expected to be outsourced this year, but we plan to develop the group into a closed supply chain by 2015.

How will Vinatex convince outside businesses to co-operate?

Vinatex employs 8 per cent of the industry’s labour force but it accounts for 19 per cent of its export turnover. This means that labour productivity in Vinatex is double that of the entire sector. The group’s average per capita income is VND3.3 million a month while that for businesses outside the group is just VND2 million. These are the main points we will use to persuade outside businesses to co-operate. Finally, most purchase orders signed by the group are with famous brands and have proven lucrative. This has helped generate favourable conditions to raise the incomes of both businesses and workers. This will also be a major factor in persuading businesses to raise their productivity and stabilise production.

The industry has a target of becoming a key economic sector. Will it have to make breakthroughs to achieve this target?

Viet Nam’s garment and industry sector stood firm in the global economic crisis from 2007-09. The global garment and textile industry dropped by 12-15 per cent, but the Vietnamese industry maintained its export turnover and increased its share in three major markets, becoming the second largest exporter to the US.

Viet Nam is now one of the top five garment exporters in the world. Last year, the country exported US$11.2 billion worth of goods.

Besides establishing itself as a key economic sector from 2011-15, the industry will speed up production based on working environments, conditions and incomes. The group has developed an action plan that includes organising cultural performances and building housing for workers. Domestic enterprises are heavily reliant on imported raw materials so the workforce and support industry and raw material supply are key to developing the industry. The group is prepared for any market-related production activities. — VNS

Tags: Vietnam Garment industry