The textile industry is still confident of welcoming the new year

With a deep belief in the leadership of the Government, ministries, sectors and localities always create the most favorable conditions for businesses, the textile and garment industry is determined to achieve the goal of a strong return in 2021 with export turnover from 38-39 billion USD.

The market share of Vietnam's textiles and garments continues to grow

In 2020, the first year in 25 years, Vietnam's textile and garment exports grew negatively by 10.5%, reaching only USD 35 billion compared to USD 39 billion in 2019. However, in the context of the world's total demand decreased by over 22%, from $ 740 billion to $ 600 billion, competitive countries have a decrease of 15-20%, even nearly 30% if long isolation. According to McKinsey's report on December 4, global fashion industry profits have fallen by 93%, more than 10 major supply chain brands and fashion brands are bankrupt. About 200,000 workers in fashion supply chains in the U.S. have lost their jobs. Meanwhile, thanks to uninterrupted production, the market share of Vietnam's textiles and garments continues to grow, reaching 20% for the first time in the US market, of which many months ranked no. 1 in terms of market share. Trade agreements, especially EVFTA, have not been able to offset the decline in turnover, but have also had significant effects in reducing order shortages.

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Mr. Le Tien Truong – Chairman of Vietnam Textile and Garment Group (Vinatex) said: Internally, the textile and garment industry has been proactive since the beginning of the year when the supply chain of raw materials was interrupted by many integrated solutions, shifting supply. At the same time, participating from the beginning of February to produce PPE products for domestic epidemic rooms, ensuring demand, stabilizing prices, and from March to June, this is the main export, ensuring employment and income for workers. The industry has identified since the beginning of February that the most important asset to be determined to protect is the skilled workforce and its position in the global supply chain, with the goal of being able to recover as soon as the market shows signs of warming. With that view, the textile and footwear industry has basically secured jobs for a very large workforce, up to more than 4 million people, although fewer jobs, less income but still above the minimum and not losing jobs of workers, contributing to ensuring order , social safety.

Particularly for Vietnam Textile and Garment Group, in 2020, although export turnover decreased by 10%, profit decreased by 15%, but wages decreased only 4.5%, reaching an average of VND 8.05 million per person per month; keep enough jobs for 150,000 workers; reduced working hours by over 12%, real hourly wages increased by over 8%; especially not to receive subsidies for workers to maintain the position of enterprises in the supply chain. Enterprises have received the close attention of the Government, the Prime Minister, the State Bank, the Ministry of Industry and Trade, the Ministry of Labor , Trade and Social, and the system of commercial banks, especially in the first 6 months of the year, helping enterprises confidently, stabilize production and accept production of all possible items just to maintain jobs and incomes for employees.

Determination to implement export turnover in 2021 from 38-39 billion USD

According to world forecasts, the textile and garment market recovered demand to 2019 as early as the second quarter of 2022, no later than the fourth quarter of 2023. Therefore, 2021 is still the year the market continues to be difficult, uncertainty, depending on the epidemic situation in the world.

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Many new features of the supply chain will be established: The down trend dominates the whole market; Simple goods, replacing fashion goods, leading to many excess production capacity but new capacity is lacking; Online business, reducing intermediaries, requires governance and digital communication with all components of the supply chain.

Clearly identifying the challenges of 2021, Vietnam textile and garment industry and Vietnam Textile and Garment Group set a high plan to achieve export turnover in 2021 equivalent to 2019 faster than the general market from 9 months to 2 years. With a high target for 2021 of $39 billion in exports, the average target is $38 billion.

In order to achieve the above objectives, besides the determination of enterprises, Mr. Le Tien Truong expressed his desire for the Government to continue to maintain macroeconomic stability, exchange rates and interest rates. Interest continues to reduce long-term borrowing rates as 2021 begins in the investment cycle to meet the new post-Covid-19 requirements, as well as investing in the production of raw materials to meet the rules of origin of FTA. The commercial banking system is flexible in credit rating, after a difficult year of low efficiency, investment projects of textiles, especially investment in yarn production, fabrics are no longer given high priority, access to capital is difficult, high interest rates should be re-evaluated for the new period corresponding to the speed of market recovery.

The government has specific policies for the development of textile supporting industries, including development space and conditions that stimulate development. Localities support textile development on the principle of sustainable development, clean production that textile enterprises must comply with the global convention of the supply chain.

The Government continues to direct the reduction of out-of-production costs, especially logistics costs through national logistics network planning, and other tariff costs.

The Ministry of Industry and Trade continues to support enterprises to effectively exploit FTA through the earliest guidance of procedures to meet the Rules of Origin, there is a portal to look up the benefits of FTA because Vietnam now has 17 FTA, there are countries with 4 FTA with Vietnam as Japan (RCEP , CPTPP, Asean-JP, VN-JP) help businesses can choose not optimal.

2020 is a particularly difficult year for the whole world due to the overall impact of the epidemic. However, thanks to uninterrupted production, the market share of Vietnam's textiles and garments continues to grow, reaching 20% for the first time in the US market, of which many months ranked no. 1 in terms of market share. Trade agreements, especially EVFTA, have not been able to offset the decline in turnover, but have also had significant effects in reducing order shortages.

Clearly identifying the challenges of 2021, Vietnam textile and garment industry and Vietnam Textile and Garment Group set a high plan to achieve export turnover in 2021 equivalent to 2019 faster than the general market from 9 months to 2 years. With a high target for 2021 of $39 billion in exports, the average target is $38 billion.

Source: Minh Chau – Brand and Public Opinion

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