Garment companies have been told to find new alternative markets as the US and EU are busy fighting against Covid-19.
Thanh Dat Garment specializes in making garment products for export to the US and EU. Le Nhung, general director of the company, said as the epidemic has been escalating in the two economies, partners have suspended imports.
Thanh Dat also exports products to Japan, but the exports account for a small proportion.
In order to get jobs, Thanh Dat has shifted to make cloth face masks for export, a ‘seasonal’ job that, according to Nhung, can retain 70 percent of workers and offer modest income.
Nhung said the epidemic has affected nearly all countries in the globe, so it is not easy to find new markets.
Thanh Dat hopes that American and European partners will return and import products from Vietnam. It’s expected that they will resume imports in May.
The US and EU are the two largest export markets for Vietnam’s textiles and garments. The other positions belong to Japan, South Korea and China. All five markets have suffered heavily from Covid-19.
|The US and EU are the two largest export markets for Vietnam’s textiles and garments. The other positions belong to Japan, South Korea and China. All five markets have suffered heavily from Covid-19.|
The Vietnam Textile and Apparel Association (Vitas) also said that there is no alternative market for Vietnam, because the epidemic affects the entire world.
“Even the US and EU have been hit hard by the epidemic, let alone other markets,” he said, predicting that Vietnam would see sharp decline in export turnover this year.
While Nhung hopes foreign partners will resume imports in May, other producers are not sure about when they will come back.
It is highly possible that the partners would continue delaying the delivery time. In other countries, people just buy food to store, while they don’t have demand for other products.
Some Vietnamese garment companies are making cloth face masks. However, since the product price is low, the job just helps to retain workers, and does not bring profits.
A series of textile and garment companies have reported loss for Q1 2020. Nha Be Corporation reported a net loss of VND2 billion, while it made a profit of VND8.7 billion in Q1 2019.
Most garment companies have set very modest business targets for 2020. Viet Tien Garment has set targets of VND6.3 trillion in revenue and VND150 billion in pre-tax profit, just 70 percent and 39 percent, respectively, of 2019.
Vietnam exported $8.9 billion worth of garments in the first four months of 2020.
The input material supply from China ha resumed, but some American and European buyers have asked to delay deliveries for the orders they had previously placed.
Textile and garment companies are facing double problem: they find it difficult to import input materials and cannot export their goods.