Although the number of orders is currently relatively abundant, in the face of fierce competition, especially in terms of human resources, as well as unit prices that are forecast to continue to remain low, businesses need to have solutions to “retain” workers, increase investment to improve productivity, and be ready to meet market demand.
Promoting investment and development
Chairman of the Board of Directors of Hung Yen Garment Corporation (Hugaco) Nguyen Xuan Duong said that the production and business situation of the unit this year is stable, achieving a good growth rate, with an increase of 8% to 10% compared to 2023. CM price (cost of cutting and sewing finished products) in the past 10 months reached more than 115 million USD, thereby bringing the total export value of the unit to more than 304 million USD, the income of workers also increased by about 8-10% compared to 2023 with an average of 10.5 million VND/person/month. The current number of orders is relatively abundant but the price is still low, unable to return to the price level of the time before the Covid-19 pandemic, causing many difficulties for businesses.
On the other hand, public opinion is also worried that the upcoming US President’s term will impose import tariffs that could be disadvantageous for Vietnam’s textile and garment exports to this market. “Most of the new partners and customers have placed orders until the end of January 2025 and are waiting for market signals as well as the US textile import tax policy to have a plan to continue placing orders,” Duong affirmed.
To maintain growth in the coming time, businesses need to have plans to develop and expand new markets such as countries in the Middle East, South America, etc. At the same time, increase investment in machinery and automatic equipment, enhance digital transformation, move towards greening textiles, cut costs to the maximum to improve product quality, and increase competitiveness in the market.
Similarly, Chairman of the Board of Directors of Thanh Cong Textile-Investment-Trade Joint Stock Company Tran Nhu Tung said that the unit's revenue in the first 10 months reached more than 134.2 million USD, up 15% over the same period, reaching 85% of the yearly plan. Profit reached more than 10.3 million USD, up 44% over the same period and reaching 150% of the annual plan. At present, the company has received more than 90% of the 2024 order revenue plan and received orders for the first quarter of 2025. With positive signals from the market, especially during the holiday season, the year-end shopping season increases, this will be the time to "accelerate" for units to reach the set goals.
Assessing the import and export activities of textiles and garments in recent times, Chairman of the Vietnam Textile and Apparel Association (Vitas) Vu Duc Giang informed that the total export turnover of textiles and garments of Vietnam in the past 10 months reached 36.11 billion USD, up 9.86% over the same period, of which, the export turnover of garments reached 28.38 billion USD, up 10.54%; fiber reached 3.66 billion USD, up 0.47%; Fabric reached 2.22 billion USD, up 11.12%,...; total import turnover of textile and garment raw materials reached 20.61 billion USD, up 15% over the same period.
Vietnam’s textile and garment export activities continue to improve, reflected in the increasingly expanding growth rate compared to the first months of the year. In particular, key export markets such as the US, EU, Japan, China still maintain growth; ASEAN markets, Russia, Canada,... are potential bright spots for businesses to promote production and export of textile and garment products. In addition, the continuing downward trend in freight rates is also supporting the growth of textile and garment exports.
Proactively responding to market fluctuations
After the US Federal Reserve (FED) cut interest rates by 0.5% in early September, inflation in the US and the European Union (EU) also tended to decrease, leading to improved consumer demand in the two largest textile and garment export markets of Vietnam in the coming time. In addition, factors such as natural disasters, political instability, and policy inadequacies in some competing countries continue to be opportunities for Vietnamese textile and garment enterprises to receive shifting orders.
However, in addition to favorable factors, textile and garment enterprises also face many challenges as Vietnam is still one of the countries inspected by the US Customs and Border Protection (CBP) in the enforcement of the UFLPA in the US. The exchange rate of the Vietnamese Dong tends to increase compared to the USD, while competing countries continue to devalue their currencies to create competitive advantages; forecasts of declining consumption in Japan and China; Factors of increasing geopolitical conflicts cause instability, affecting the recovery of the global economy, etc.
Regarding this issue, Chairman of the Board of Directors of Vietnam National Textile and Garment Group (Vinatex) Le Tien Truong said that orders will benefit when consumer demand improves during the holiday shopping season. However, demand and unit prices will only really improve from 2025 in a good scenario. Therefore, businesses need to be careful to build appropriate scenarios, in which they need to pay attention to factors of instability, geopolitical tensions, and potential risks to consumer psychology.
Sharing the same view, General Director of Vinatex Cao Huu Hieu affirmed: Businesses are still under a lot of pressure when the market has not improved. For the garment industry, the pressure on delivery time, unit prices have not improved, and product quality requirements are more stringent.
In the yarn industry, although losses have been reduced by 80-85% compared to 2023, businesses still have to face fluctuations in cotton prices and there has been no improvement in yarn prices, etc. Therefore, units need to ensure the maintenance of production activities, have solutions to “retain” workers, increase digital transformation, invest in machinery and automation equipment as well as proactively prepare resources to take advantage of the opportunities.
Vitas Chairman Vu Duc Giang affirmed: Although the world situation continues to be complicated, conflicts escalate in many regions; gasoline prices, freight rates fluctuate strongly, the trade economy recovers slowly, total global investment declines, natural disasters, climate change, etc., the Vietnamese textile and garment industry still maintains a good growth rate. Export turnover reached 44 billion USD, up 11.26%; import turnover reached 25 billion USD, up 14.79%; trade surplus of 19 billion USD, up 6.93% compared to 2023.
Achieving the above results demonstrates the efforts of the units to overcome difficulties as well as the efforts of Vitas in policy advocacy activities, contributing to removing difficulties for businesses, while strengthening in-depth domestic and international trade promotion activities, aiming to expand export markets, diversify customers and products.
With the advantage of 17/19 new-generation Free Trade Agreements (FTAs) taking effect, textile and garment enterprises will have great opportunities to boost exports. However, to maintain stability as well as boost production, the textile and garment industry needs to develop a strategy to diversify markets, customer partners and products with high added value; constantly absorb and innovate automation technology, digital management, proactively adapt to the requirements and demands for sustainable green standards from many export markets, striving to reach the export turnover target of 47-48 billion USD in 2025.
