Textile and garment sector aims for 30 percent export growth

The textile and garment sector has set the target for a 30 percent growth in 2011. The sector must do this to achieve US$18 billion in export turnover by 2015.

In recent talks with VOVNews, Vice Chairman of the Vietnam Textile & Apparel Association (VITAS), Le Van Dao, said over the past ten months, the sector’s export turnover was equivalent to that in all of 2009 and is likely to surpass the US$10.5 billion target for this year by 20 percent.

Mr Dao attributed this positive result to the economic recovery of the importing countries after the global economic downturn. There has been an increase in the consumption demand in these markets, particularly the US, while the EU began to see growth in July, 2010.

Though there have no been new investments or a rise in workers over the past years, Vietnamese businesses have recorded high export growth thanks to the transfer of new technologies to boost labour productivity.

Vietnamese businesses have received more orders than before because many customers have transferred their business from the Chinese market. By the end of this year, most factories will have achieved their order targets and even have some for next year. The soaring demand for garments and textiles in the global market will provide an excellent opportunity for Vietnamese exports to improve, said Mr Dao.

Reporter: Low-cost orders from China have been shifted to Vietnam. This shows that Vietnam is focusing on producing low-cost products, doesn’t it?

Mr Dao: Not only low-cost orders are transferred to Vietnam because we are entitled to choose our orders. Vietnam’s exports have their own trademarks or at least the trademark of the supermarket that sells the products.

We are producing garment and textile products at average prices for orders from Europe and Africa. For the EU market, the demand for low-cost products accounts for only 10 percent while average priced products account for 85 percent.

Reporter: The sector has worked out a development strategy until 2015 with a vision to 2020. To reach the targets under this strategy, how will the sector achieve export growth next year?

Mr Dao: To reach the export target of US$18 billion by 2015, the sector must record a growth rate of 20-30 percent next year. This is a major target and will be uphill task for the sector as it will compete with big rivals like China and other free markets.

Reporter: Apart from the above-mentioned difficulties, what challenges will the sector face?

Mr Dao: The weakest point is that Vietnam lacks high-quality human resources such as designers, marketing staff and business managers. In fact, the sector has run training programmes for each period but businesses themselves also need to improve their staff by training and hiring highly skilled workers and improving professional skills.

In addition, ensuring the sufficient supply of production materials remains a thorny problem for the sector. For example, cotton is a main input material but the sector has to import nearly 100 percent. Meanwhile, we can only produce a small volume of other materials or many material resources must be imported to make products at the customers’ request.

Reporter: It seems that the sector has not yet paid due attention to the domestic fashion market. What is your opinion on that?

Mr Dao: Major businesses currently focus on both domestic and export markets. However, for some such as Viet Tien, Nha Be, the domestic market still accounts for a relatively high proportion of their business.

In response to the “Vietnamese use Vietnamese Goods” campaign, the Textile and Garment Group (Vinatex) has opened 56 supermarkets in 24 provinces and cities, not including supplying the chain of shops run by other businesses. When facing a global market crisis as in 2009, businesses can rely on the domestic market. The garment and textile industry’s target remains in the export market while smaller businesses can explore the domestic market.

Reporter: Thank you very much. – VOV

Tags: Vietnam garment exports, Vietnam Garment industry, Vietnam textile industry