Bright forecast for textile industry

Saigon 3 Garment Company factory

According to the Ministry of Industry and Trade, the export quota in the first quarter of 2013 reached $1.05 billion, a 28.4pct increase compared to the same period last year. Most textile firms already have a lot of orders.

The Vietnam National Textile and Garment Group (Vinatex) said Vietnam is on a priority list with many foreign importers. Even though the import industry of many countries decreased because of recession in 2012, Vietnam's exports still increased by 9.2pct to US, 9pct to South Korea and 19.3pct to Japan.

Pham Xuan Hong, deputy chairman of Vietnam Textile and Apparel Association (Vitas) said many companies decided to transfer their orders from China to Vietnam due to rising prices for Chinese textile exports.

Some new costumers have surveyed Vietnam's export industry in anticipation of approval for the Trans-Pacific Partnership (TPP) Agreement in 2015. If the agreement goes into effect, textile products that export to member countries of TPP would be exempt from taxes.

Since late 2012, businesses from China, Japan have come to explore opportunities in Vietnam.

According to Hong, many Vietnamese firms are busy as they have received many orders.

Facing the new opportunities, domestic enterprises said they would fix any mistakes and shortcomings and enhance production capacity in 2013.

Trade agreements such as the TPP, ASEAN Free Trade Area (AFTA), and agreements with the EU and China all point to greater exports at lower tax rates.

Vitas consultant Le Quoc An said the biggest challenge for the Vietnamese textile industry was a shortage of raw materials. If a firm wants to enjoy tax incentives, they must prove that their materials come from their own countries or member countries and this would cause difficulties for many companies.