Vietnam's textiles sector could be facing brighter prospects this year as, despite the overall gloomy forecast for the global economy for 2023, local producers are aiming to meet the growing demand for clothes in the international market.
Thanh Cong Textile Garment Investment Trading unveiled that in January alone, the company had received orders approximating 90 per cent of its revenue target for the whole of the first quarter (Q1) of this year, with more orders for Q2 already being placed.
At TNG Investment and Trading, the company reported $17.2 million in revenue for January, nearly $870,000 over projections. The company’s exports accounted for 99 per cent of the total, with major markets being the US, receiving 34 per cent, France, with 28 per cent, and Canada, purchasing 14 per cent.
The Board of Directors at TNG have set a target of $326 million in revenue and $14.6 million in profit for 2023, equating to an 11 per cent and a 16 per cent jump respectively, on-year.
Global markets already account for 80 per cent of Garment 10 Corporation's (M10) total revenue, and the company is aiming at further expansion this year. M10 hopes to maximise the reach of their products, while simultaneously taking cost optimisation measures and pushing high-tech and digital transformation across the company's infrastructure.
M10 CEO Than Duc Viet noted that besides traditional export markets like the US, EU and Japan, the company would, "Gear towards new markets that have signed free trade agreements with Vietnam, along with tapping the Chinese, Canadian, and Russian markets".
|Last year, in the face of global market headwinds, businesses in the textiles sector had to be flexible, and this year should prove no different |
According to Vietnam Textile Apparel Association (Vitas), amid the gloomy 2023 global economic forecast, the global demand for textiles is expected to drop 8 per cent on-year.
Last year, in the face of global market headwinds, businesses in the textiles sector had to be flexible, and this year should prove no different. As a result, Vitas predicts the value of Vietnamese textile exports to jump as much as 9 per cent on-year, reaching $48 billion from 2022's $44 billion level.
Vietnam's textile industry development strategy towards 2030 has set growth targets of between 6.8-7.2 per cent per year on average, while during the period 2021–2025, efforts will be made to achieve 7.5-8 per cent growth annually.
In a report released on February 10, the analyst team at Mirae Asset Securitiesregarded three key factors contributing to the bullish forecast for textiles this year.
First, fashion retail in several major export markets is still experiencing growth, showing a continuing demand for clothing despite the less than-optimistic growth projections.
Secondly, input material costs of the sector have been falling along with the sharp drop in logistics expenses. This is helping firms to control costs and maintain a healthy profit margin in the midst of soaring inflation.
Thirdly, many countries have re-opened their doors to trade, easing pressure on the supply chain while facilitating the import and export of textile products. Additionally, a relatively stable exchange rate is helpings firms incur fewer surprises and less unpredictability.
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