Vietnam aims for a place in the top three garment and textile exporters

“In 2011, the garment and textile sector should strive to be among the top three garment and textile exporters in the world”, said Deputy Prime Minister Hoang Trung Hai at a recent conference to implement the sector’s tasks for 2011.

Industries aim for a bigger share of total exports

The Vietnam Garment and Textile Association (Vitas) has reported that Vietnam’s garments and textiles currently account for 2.5 percent of the world’s total market share. The sector is set to achieve more than US$13 billion in turnover in 2011 due to a growing global market share.

According to Vitas, Vietnam will make a deeper approach to some major markets, including the US, the EU and Japan. Deputy Director of the Vietnam Garment and Textile Group (Vinatex) Le Tien Truong says these are three important markets for any exporters.

In 2010, Vietnam ranked second in exporting garments and textiles to the US market, and third to Japan and the EU. Although the world’s garment and textile sector shrank by 12-15 percent, Vietnam’s export earnings from such markets kept increasing.

Vu Duc Giang, President of the Vinatex Management Board, says that the US is now the largest trading partner of Vietnam. In 2010, the country earned more than US$11 billion, including more than US$6 billion from the US market, 22 percent more than in the previous year.

Vinatex is working with American partners to affirm the quality and standards of Vietnamese products. Vitas forecasted Vietnam’s market share in the US will increase by 4.6 – 5.1 percent, and in the EU market by 2.02 percent.

Vitas’s forecast shows that Vietnam’s garment and textile business will have numerous opportunities to increase their market share in the EU in 2011 because Eastern Europe and North Africa are unable to gain ground any more.

Last year, Vietnam’s garment and textile exports to the Japanese market increased by 20 percent, earning US$1.2 billion. This was the first time the sector’s export turnover in Japan could reach more than US$1 billion.

According to the general director of the Viet Tien Garment Joint Stock Company, his company has worked with six major Japanese groups which have selected Vietnam as their second import option after China.

Under the Free Trade Agreement (FTA) ASEAN-RoK, AKFTA, the garment and textile sector saw a sharp increase in Vietnam’s key export items to the Republic of Korea.

After enjoying preferential treatment from AKFTA’s commitments, with average tariffs reducing from 8 percent to 0 percent and the average tax for garments from 13 percent to 0 percent. Along with ASEAN nations, Vietnam has completed negotiations for the Free Trade Agreement with the RoK.

Accorrding to Vitas’ deputy chairman and general secretary Le Van Dao, Vietnam’s garment and textile exports to the RoK market increased by at least 60 percent in 2010.

In recent years, some Vinatex companies have introduced Vietnam’s trademarks to the world market. For example, the Viet Tien Garment Joint Stock Company has a plan to develop sales through its agents in Laos and Cambodia and later in Myanmar and China.

Ensuring stable orders of garment and textiles

Since early this year, many garment and textile businesses have received new orders which are valid until the second quarter of the year.

The Dong Tien Joint Stock Company (Dovitec) has already signed enough export contracts through the end of October 2011. Dovitec deputy director Nguyen Van Hoang says, the company in focused on exporting to Europe (50 percent), the US and Japan.

The Dong Nai Garment Joint Stock Company (Donagamex) has so far signed contracts lasting until mid- 2011.

However, Vitas has warned that businesses should sign contracts on a quarterly basis, depending on their production plans to provide jobs for workers and cope with fluctuations in the market through out the year.

Experts attribute the signing of many contracts to foreign partners’ growing confidence in Vietnamese products which meet international standards, are sold at reasonable prices and always delivered in time.

Localization to increase the value of goods

Vinatex deputy director Le Tien Truong says the garment and textile sector has attached much importance to improving the quality of goods.

It has invested strongly in fibre technologies. In July this year, its Dinh Vu fibre production plant will be put into operation in the northern port city of Hai Phong to meet 60-70 percent of domestic demand. Currently, Vinatex is conducting surveys in Cambodia and Canada with the hope of finding a stable supply of materials for the production of pisco fibre (a kind of fibre extracted from eucalyptus and pines).

For the domestic market, Truong affirms the group will devise plans for development of both domestic and international markets with priority given to building trademarks and a chain of stores and supermarkets for domestic consumption.

In future, the group will invest in building production factories in the northern and central regions to increase productivity and output in response to the “Vietnamese using Vietnamese goods” campaign spreading across the country.

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