Textiles and garments expect a big crop for 2015

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Le Tien Truong, vice chairman of Vietnam Textile and Garment Association and general director of state-run Vietnam National Garment and Textile Group, said Vietnam’s textile and garment industry was likely to achieve export turnover of at least $28.36 billion in 2015.

Truong added that the local textile and garment industry had raked in export turnover of nearly $24.5 billion, up 19 per cent against 2013, including $21 billion from exporting garments and over $3 billion from exporting textiles and fibre.

This view was echoed by Norfolk Hatexco deputy general director Thanh Thuy who told VIR that the firm had recorded export turnover of more than $25 million in 2014, up 10 per cent on-year.

“2015 will see this figure increasing, to more than $25 million. We recently invested an additional $4 million to our factory in Ha Nam province and will double the 1,000-strong workforce at the factory in the coming time,” she said.

The Singaporean-Vietnamese garment and textile joint venture’s products are exported to the US, EU and Japan. Thuy said the turnover would likely increase over the coming years thanks to the free trade agreement (FTA) between Vietnam and the EU and the potential Trans-Pacific Partnership Agreement.

Under these deals, import and export tariffs for many items including garments and textiles will be slashed.

Quach Thi Nhung, head of South Korean garment maker KJ Vina’s Human Resources Section told VIR that the firm’s 2014 export turnover to the US and EU had reached $3.62 million. The figure was expected to hit $3.8 million in 2015.
“We are using hi-tech solutions to improve productivity. It is expected that we will greatly benefit from the agreements,” she said.

Nguyen Viet Thang, head of locally-owned garment maker X26 Company’s Technical Section, told VIR that the company’s turnover had reached $21.43 million, up from $20.14 million in 2013 and would hit $26.2 million in 2015.

This company’s products are sold locally and exported to the EU. This year, X26 would spend millions of dollars installing a new production chain. Several export contracts have been inked for 2015.

According to HSBC’s recent Vietnam trade link report, garments and textiles would continue being the key driver of Vietnam’s exports in 2015.

“Vietnam has a strong foothold in the global market for textiles and garments, supported by comparatively low wages and its central Asian location. Education is improving and technological infrastructure is good. These factors have supported the growth of low cost manufacturing sectors such as garments,” the reported stated.

The textiles and garments industry will be a significant contributor to Vietnam’s exports and is expected “to grow by more than 11 per cent per year from 2014-2020,” it said.

However, key markets for Vietnamese garments are gradually shifting eastwards. Around 6 per cent of textile and garment exports in 2013 went to China and 12 per cent to the rest of Asia, excluding Japan.

By 2020, the share going to China will have doubled, while the share of textile and garment exports to the US will fall from around 50 per cent in 2013 to nearly 40 per cent by 2020.