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Rosy outlook for Vietnam’s garment trade in the new year

The New Year is looking good for Vietnam’s garment-textile industry, with exports estimated to fetch around $33.5 to $34 billion, up by 10 per cent year-on-year. Chairman of Hung Yen Garment Company (HUGACO) assesses the achievements recorded in 2017, thorough preparations of businesses and the government’s plan to support industry development will go a long way in helping the industry achieve strong growth.

The Vietnam Textile and Apparel Association (VTAA), noted at the beginning of last year, the sector overcome various challenges caused by the pending Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the falling international demand for apparel. Vietnam’s industry reversed the trend from the second quarter of the year and ultimately managed an export turnover of $31 billion, a rise of 10.23 per cent as against 2016.

In the year, Vietnam’s garment-textile exports to major markets such as the US, the EU, Japan, the Republic of Korea and Russia went up by 7.2 per cent, 9.23 per cent, 6.1 per cent, 11.8 per cent and 56 per cent, respectively. The growth of the Vietnamese garment-textile sector is rated the highest as against that of other garment-textile exporters such as China, India, Bangladesh, Turkey and Indonesia.

Vietnamese garment manufacturers’ are expected to get more orders in 2018, but face many issues including that caused by falling garment prices in many markets. Truong Van Cam, VTAA Vice Chairman, noted the domestic garment enterprises will have to compete with their rivals from Myanmar, Cambodia and Bangladesh in terms of insurance, land, tax, transportation and customs procedure costs.

Le Tien Truong, General Director of the Vietnam Textile and Garment Group (Vinatex), suggested local garment-textile businesses focus on technological applications, investment attraction and the building of connectivity chains of the VTTA. Besides spending more investments in design, original design manufacturing (ODM) should be increased to 10 per cent to raise added values of products. To achieve the two-digit growth target in 2018, VTAA advises businesses to adapt to market changes, expand the domestic market and diversify products, while forming effective production chains.