Garment and textile export turnover reaches US$13.7 billion during Jan-Aug period

Nhan Dan – Exports of textiles and garments reached nearly US$2.2 billion in August, up 0.2% from the previous month and up 20.9% compared to the same period last year, according to statistics from the Ministry of Industry and Trade (MoIT).

Sourcing domestic raw materials and changing production methods are among top priorities to promote development of the garment and textile industry. (Image credit: VNA)
Sourcing domestic raw materials and changing production methods are among top priorities to promote development of the garment and textile industry. (Image credit: VNA)

The industry reclaimed its leading position on exports in the processing industry group with total turnover during the last eight months reaching nearly US$13.7 billion, a year-on-year increase of 19.7%.

However, according to General Secretary of Vietnam Textile and Apparel Association, Dang Phuong Dung, despite high export turnover, the industry still recorded a relatively modest added value, which was mainly sourced from its dependence on imported raw materials for production.

Domestic suppliers only satisfy 1% of demand for cotton and 20.2% for fabric needs. Particularly with fibrous materials, the sector has a capacity of producing 6 million spindles per year, but only 30% of them were used for production.

In addition, Vietnam's garment industry was mainly an outsourced manufacturing link with inactive involvement in the dynamic global textile supply chain. Outsourced domestic manufacturers themselves are also passive in finding customers and expanding markets.

It is essential to realise that under pressure from trade agreements that soon will be signed, developing the supply of domestic raw materials and promoting production method change are the top solutions for improving the quality of textile products for export.

General Director of Vietnam National Textile and Garment Group, Le Tien Truong said that outsourced domestic manufacturers having accumulated experiences and are on their way to switch production methods to the mode of FOB (free on board) and ODM (original design manufacturer) to add value to products.

Proceeding to the higher production methods to enhance the added value in products is the inevitable trend of businesses, especially prior to a series of new trade agreements. Therefore, businesses should be aware of and thoroughly prepare, focusing on material market research and producing on demand from their partners.

In a bid to maintain the sector’s growth momentum in September and the remainder of the year, MoIT will strengthen solutions to further boost trade promotion and diversify markets for local products.

Along with better implementation of measures to stabilise prices and domestic market, the ministry will focus on promoting the development of industrial production, reducing inventory, and effectively managing imports to promote the development of the domestic market.