|Apparel exports have been showing signs of a rebound since the end of the third quarter last year |
Recent figures by the Vietnam General Department of Customs show that as of February 15, Vietnam raked in $3.77 billion from textile and apparel exports, up $270 million compared to the same period in 2020.
Le Tien Truong, deputy chairman of the Vietnam Textile and Apparel Association (Vitas) and chairman of state-run group Vinatex noted that with the COVID-19 situation still intense and consumption declining in Vietnam’s major export markets like the US, EU, and Japan, many local firms have adopted smartly by shifting to producing items for common use with reasonable price tags.
“In fact, the textile and clothing sector has been trending in this direction from the second half of last year, helping to ensure continuous work for labourers with stable order placement. This helped the sector to reach an export turnover of $35.2 billion last year, which, albeit lower than in 2019, was much better than other major exporters like India and Bangladesh,” Truong said.
|According to Vitas, in the brightest forecast the sector would recover consumption level as in 2019 in the third quarter of 2022, whereas based on the slow recovery scenario such consumption would reach by end of 2023. |
Due to the pandemic, total aggregate demand for textile and apparel products shed more than 22 per cent globally, going from $740 billion to $600 billion. Competing countries all saw 15-20 per cent decreases. The reduction of Vietnam’s textile and apparel sector was far less than the world average.
A Vinatexsource certified that many firms in the sector, including Vinatex members, have signed orders until the end of April. Significantly, orders have been placed for several product lines such as knitwear and items for common use until July and August.
Hung Yen Garment Corporation (Hugaco) – a major member belonging to Vinatex group – posted a revenue of $15.7 million and after-tax profit of $1.07 million in January 2021, up 83 and 160 per cent compared to January 2020.
The company has signed export orders until the end of this year’s second quarter, ensuring stable work for its labourers in the upcoming months.
In 2020, COVID-19 has adversely impacted firms across the board, and Hugaco was not an exception. Its total revenue shed 5 per cent to VND2.6 trillion($113 million) and profit sank 20 per cent due to declining orders and price rates.
Nguyen Xuan Duong, chairman of Hugaco, said that after a challenging year like 2020, this year, Hugaco’s prime goal in the short term is to sign more export orders and expand its market to ensure employment for its labourers.
According to Vitas, in the best case scenario, the sector would recover 2019 consumption level by the third quarter of 2022, while under a slower recovery scenario it would take until the end of 2023.
Under the current market conditions, the sector has set forth the target of achieving $39 billion in export value this year, equivalent to the 2019 performance.