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Textiles and Clothing in Vietnam: Riding the Crest of a Wave
published in Issue 146, August 2010
The past decade has been momentous for Vietnam’s textile and garment industries as the country has moved from complete state control to a much freer economy—thereby allowing individual entrepreneurs and small companies to thrive. Also, Vietnam’s growing trade surplus in textiles and clothing is bringing increasing prosperity to the country. Between 2001 and 2009 its exports rose 78-fold to reach US$9.1 bn. Today there are more than 2,000 textile and garment companies, employing over 2 mn workers, and textiles and clothing have become the country’s largest industry. Moreover in the first four months of 2010, garments alone made up 57% of Vietnam’s total exports to the USA.
The industry benefits from low labour costs and membership of several organisations and trading blocks, including the Association of Southeast Asian Nations (Asean), Asean Economic Ministers (AEM) and Asia-Pacific Economic Cooperation (APEC). Moreover, it also stands to benefit from an agreement to create an Asean-China Free share held by China. To improve the situation, the Vietnam Textiles and Apparel Association (VITAS) has recommended that businesses pay more attention to: increasing the value of their products; vertically integrating their textile and garment production in order to reduce the amounts of materials which need to be imported; strengthening ties with US importers; and advertising their products more widely.
Increasing added value may prove difficult without an injection of skills and capital investment into the finishing sector. Also, the Vietnamese textile and clothing industry will have to contend with problems which are already familiar to those in other low cost countries—notably growing wage expectations and the loss of skilled workers to other industries as these start to look more attractive. Trade Area (ACFTA) by supplying textiles and clothing duty-free to China. Recently, it has benefited in particular from the fact that many of China’s yarn mills have run down their stocks during the recession, and a number of its skilled employees have gone back to working in agriculture. The industry in China also suffers from energy shortages.
But the Vietnamese industry still has some way to go to even approach the success of its counterpart in China. Vietnam is now the second largest supplier of textiles and clothing to the US market. But it accounted for only 6.6% of textiles and clothing imported from all sources in 2009, and its share paled in comparison with the 39.2% share held by China. To improve the situation, the Vietnam Textiles and Apparel Association (VITAS) has recommended that businesses pay more attention to: increasing the value of their products; vertically integrating their textile and garment production in order to reduce the amounts of materials which need to be imported; strengthening ties with US importers; and advertising their products more widely.
Increasing added value may prove difficult without an injection of skills and capital investment into the finishing sector. Also, the Vietnamese textile and clothing industry will have to contend with problems which are already familiar to those in other low cost countries—notably growing wage expectations and the loss of skilled workers to other industries as these start to look more attractive.
Table of Contents
Textiles and Clothing in Vietnam: Riding the Crest of a Wave
Profile of Vinatex (Vietnam National Textile Garment Group)
Profiles of Three Leading Privately Owned Vietnamese Textile and Clothing Companies: Thanh Cong Group, Thien Nam and Vison Yarn Spinning
Six times a year, Textile Outlook International provides up to 200 pages of expert comment and analysis. A subscription provides an overview of the global fibre, textile and apparel industries. It is essential reading for senior executives in the fibre, textile and apparel industries – and for anyone who is not involved in the industry, but needs to quickly gain an understanding of the key issues.
Reports in Textile Outlook International include:
country profiles – providing a comprehensive guide to the textile and clothing industries in a range of countries and regions. The reports include an economic and political profile together with a comprehensive overview of the main issues, plus an outlook for the future.
company profiles – giving you the opportunity to learn from strategies employed by others. Companies profiled recently include retailers, manufacturers, innovators and sourcing companies involved in textiles and apparel as well as smaller companies which illustrate the opportunities for firms which are interested in selected sourcing locations.
trends in world textile and apparel trade and production – taking into account current issues facing the industry – such as global fibre prices; competition from China and other low cost countries; the elimination of quotas and imposition of selective new ones; relocation of production operations; the impact of economic factors affecting trade; international trade agreements; trade promotion agreements (TPAs); and much more.
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