Vietnam's textile and garment industry is facing many challenges due to declining orders, high interest rates and exchange rate differences.

However, sharing at the textile and garment industry press conference this morning on November 18, Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association, expects signs of prosperity in the coming year, predicting that the export figure will continue to grow. continued strong growth.

Sewing goods for export to the Spanish market at Ho Guom Garment Company (Hung Yen).

Hungry for orders

According to information from textile, leather and footwear enterprises, in contrast to the middle of the year with abundant orders, now, at the end of the year, orders of many businesses have plummeted.

General Director of Dap Cau Garment Company Luong Van Thu said that difficulties in the market, finding sources of goods, in terms of scale and unit price all decreased from the beginning of the third quarter. In major markets such as the US and Europe, orders have fallen by up to 50%.

Chairman of the Ho Chi Minh City Textile, Embroidery and Knitting Association Pham Xuan Hong also shared that from July 2022 to now, many businesses are facing difficulties due to a very strong decrease in orders, especially businesses in the southern region. , focusing on the US and EU markets due to inflationary pressure and reduced spending.

The report of the Vietnam Textile and Apparel Association (Vitas) said that businesses are in a difficult period, under great pressure. It can be mentioned that the orders of November-December this year, and the first quarter of 2023, decreased by 25-27% on average, especially for processing enterprises, this decline is even more severe. than.

In addition, businesses are also under pressure from rising bank interest rates, raw material purchases and exchange rate differences.

"Another difficulty is the problem of labor, because labor is the number one asset of an enterprise, above all technological equipment and factories, so even in the current context, units that have reduced orders and missed orders must also try their best. Many units have had to switch from garment production to making bags for supermarkets to have jobs for workers and retain them while waiting for the textile industry to recover next year. We expect a strong recovery will fall in the third quarter of 2023," said Mr. Vu Duc Giang.

However, according to Vitas' report, in the past 10 months, the textile and garment industry has recorded the efforts of enterprises and many bright spots. Exports in the past 10 months reached nearly $38 billion, up 17.2% over the same period in 2021. This is a great effort and a premise for the whole industry to achieve exports of $43 billion this year.

The diversity of businesses when exporting to 66 countries and territories; in which large markets such as the US, EU, CPTPP countries, Korea and China.

According to Mr. Vu Duc Giang, the above result was achieved thanks to Vietnam's opening the door to integration with 15 effective trade agreements. It is the foundation that creates market diversification.

In addition, enterprises in the textile and garment industry are accelerating the transformation from highly processed Vietnamese textile and garment products, to digital management, supply chain, self-reliance, catching up with the trend of greening, sustainable development with different types of products. new yarn from hemp, wool.

"We consider inflation, currency devaluation, and purchasing power of major countries to decrease as risks. But recently, this has been the pressure forcing Vietnamese textile and garment enterprises to seek and diversify. Many businesses in difficulties are still growing, such as Viet Tien Garment, Garment 10, Nha Be, An Phuoc...," said Mr. Vu Duc Giang.

Ambitious export 47 billion USD

Vitas said that this year, the export target of 42-43 billion USD is achievable. In 2023, the textile and garment industry set out ambitions and breakthroughs to overcome difficult challenges, reaching an export value of about 45-47 billion USD, depending on the evolution of the import market.

Sewing goods for export to the Japanese market

"We have the basis to set that ambition, as information on trade agreements is the driving force to promote the shift of investment from abroad into Vietnam, helping businesses diversify markets and products. For example, in the past, we supply products to Muslim countries with a small proportion, but up to now, the businesses that are supplying goods to this market are very large, they shift a part of their orders from Bangladesh countries. In addition, Vietnam's textile and garment has been promoting to reduce imports and increase the localization of domestic raw materials, which is the solution for enterprises to be proactive in the source of raw materials for production." Mr. Giang said.

According to preliminary statistics of Vitas, currently the textile and garment has been localized about 49%, in the coming 2023-2025 time, this number is expected to be raised to 51-55%.

In addition, the motivation for brands to come to the Vietnamese market is the programs of sustainable development, greening, digital governance, and circular economy in Vietnam. This is the solution to promote, stabilize and develop in Vietnam; especially encouraging textile and garment enterprises to develop sales by design, creativity, and minimize the processing of goods for partners.

To help businesses overcome difficulties, Mr. Vu Duc Giang also made recommendations to the Government and ministries and sectors, this year considering tax reduction or tax delay for businesses. Along with that, find financial sources for businesses to borrow at low interest rates to maintain production and stabilize labor.

Regarding the bank interest rate, the State can consider with a number of sectors with large exports, high trade surplus, and job creation, keep the interest rate at a reasonable rate to encourage businesses to maintain, keep labor stable.

According to Mr. Le Tien Truong, General Director of Vietnam National Textile and Garment Group, the total recovery of textile and garment demand, if any, only from the 3rd and 4th quarter of 2023 corresponds to a decrease in inflation.

In that context, in order to increase competitiveness, Vietnam's garment industry needs to prioritize the ability to supply packages, which can produce both yarn, fabric and sewing; pioneer in the production of green products, recycled products to promote exports to European countries.

"We need to persist in orienting production along the chain to improve the ratio of green products. To stick to customers, to follow the market, to respond flexibly to the market and to ensure jobs for workers; protect enterprise resources to cope in the context of long-term difficulties ... " - Mr. Le Tien Truong said.

According to VNA