Textile and apparel firms eyeing rising orders from US market

Textile and apparel firms eyeing enormous opportunities to boost export to US market

The representative office of TNG Investment and Trade JSC in New York has been doing a smart job with trade promotion through signing major export contracts with well-known business partners like Nike and A&F, maybe even GIII Apparel Group in the near future.

In the first eight months of this year, TNG, a major textile and apparel firm in the northern market, raked in VND2.359 trillion ($104 million) in revenue, meeting 86 per cent of its full-year target, and VND117 billion ($51.7 million) in after-tax profit, a 54 per cent jump on-year and reaching 93 per cent of the annual projection.

As the US accounts for 33.7 per cent of TNG’s total export value, the company’s opening a representative office in New York is considered a sound step helping the firm to directly reach out to foreign partners and reduce intermediary costs.

“Based on our current performance and our signed export contracts, TNG is expected to reach VND3.45 trillion ($152 million) in revenue and VND157 billion ($6.9 million) in after-tax profit in the whole year, up 25 per cent on-year on both counts,” said Nguyen Van Thoi, the company’s chairman.

With nearly $20 billion in total export value in the first eight months, a 17 per cent jump on-year (equal to $2.86 billion), and half of the value coming from the US, Vietnam’s textile and apparel export growth hit a five-year record.

Forecasts for the rest of the year are bright as the year-end period is often the peak production season for the sector, leading to soaring revenue and profit figures, especially amid new occurrences in the US-China trade spat.

The US administration’s imposition of import tariffs on billions of textile and apparel products from China has created opportunities for Vietnamese firms to gradually grow their market share in the US.

The performance of Thanh Cong Textile Garment Investment Trading JSC (TCM) was quite upbeat so far this year.

Accordingly, in the first eight months TCM reaped VND2.46 trillion ($109 million) in the revenue, equal to 80 per cent of its full-year revenue target and VND185 billion ($8 million) in after-tax profit, reaching 98 per cent of its full-year after-tax profit target.

Industry experts assumed that the local textile and apparel sector will be one of the biggest beneficiaries of the US-China trade spat.

The US continues to be Vietnam’s largest export market for textile and apparel products, with $9.1 billion in total export value in the first eight months of 2018, a 12 per cent jump on-year, accounting for 46 per cent of Vietnam’s textile and apparel product export value.

The sector is expected to rake in $13.8-14 billion in total export value from the US this year.

According to the Vietnam Textile and Apparel Association (Vitas) chairman Vu Duc Giang, with the current favourable market conditions, the textile and apparel sector could reach $35 billion in export value this year, compared to the $31 billion last year.

Figures by Trademap, which provides trade statistics for international business development, showed that the US’ total textile and apparel import value amounted to $114 billion last year, with $40.8 billion coming from China and $12.26 billion from Vietnam, making up 35.79 and 10.75 per cent of the US total, respectively.