Global uncertainties weigh on the growth of the textile-clothing industry | Company

Illustrative photo. (Source: VNA)

Hanoi (VNA) – Vietnam reported a 23.5% year-on-year increase in textiles and clothing exports to gain $18.7 billion in the first five months of this year amid lingering market uncertainties associated with rising input prices.

A majority of textile-clothing companies have orders to fill by the end of September, many are negotiating to earn more for the rest of the year.

Nam Dinh Textile Garment JSC (Natexco), a major producer located in the northern province of Nam Dinh, generated more than VND 1.02 trillion in revenue at the end of May, up 23% from the same period last year, according to union president Doan Van Dung.

This shows the tremendous efforts of society to deal with the adverse effects of the COVID-19 pandemic, he said. Natexco suffered from severe labor shortages in February and March, as there were times when up to half of its workers had to take sick leave due to COVID infection -19.

Viet Thang Corporation struggled to maintain production in the first quarter of the year, as the Russia-Ukraine crisis caused supply chain disruptions and a spike in input and fuel prices and logistics costs , according to Deputy General Manager Dau Phi Quyet.

These expenses increased three or four times, so all units were struggling to find possible ways out of the situation, Quyet said.

Although the company has managed to find stable supplies of inputs, it suffers from a shortage of imported replacements for the equipment components to manage. It took six to eight weeks to receive deliveries of replacements, which normally came from Europe. Now shipments can take up to 12 weeks to arrive.

To reduce the cost of logistics services, the company gives priority to large orders rather than small ones.

Vietnam National Textile and Garment Group (Vinatex), one of the leading textile-garmentmanufacturers in the country, have recorded impressive business performance since the beginning of this year with a 50% increase in revenue. But similar challenges could potentially stunt its growth in the remaining months.

Decades-high inflation is ravaging major economies including the US, EU and UK, leading to higher inventories and lower purchasing power. This could have substantial effects on Vinatex’s performance, CEO Cao Huu Hieu said.

To overcome the crisis, Hieu advised domestic manufacturers to prepare with more flexible plans to respond quickly to any changes in the market.

He attributed the company’s positive first-quarter business results to its ability to secure a stable and sufficient supply of inputs. Vinatex invested in several yarn production projects using modern technologies between 2015 and 2020, two of which were commissioned last year./.

Michael O. Stutler