VietNamNet Bridge - Vietnamese textile & garment companies have had to scale down production, while others are facing closure.

Bui Duc Thinh, chair of Song Hong Garment Company said: “The directors of some large corporations are my age, but their enterprises can export $1.6-1.7 billion worth of products. My company’s export revenue is $300 million and we can pocket $130 million only."

“Our businesses were set up at the same time, but different policies created different businesses,” Thinh said, saying that private businesses remain undersized.

The director of the company with 10,000 workers said he has had to struggle hard to survive the difficult period, ‘turnover down, profit down, orders not enough’.

“I know that garment companies have to try to take any job they can to survive difficult times,” he said.

Vietnamese textile & garment companies have had to scale down production, while others are facing closure.

Nguyen Xuan Duong, chair of Hung Yen Garment JSC, which has 13 subsidiaries and employ 14,000 workers, confirmed that Vietnam’s textile & garment industry is experiencing tough days. 

“By this time of the last years, we had obtained orders to ensure enough jobs until the end of the year. But some of us still don’t have enough jobs for August,” he said. “We have to live from hand to mouth”.

“We have to accept the price decreases of 10-15 percent and sometimes 20 percent for some orders,” he complained. 

Nguyen Van Thoi, chair of TNG Investment & Trade JSC, confirmed that garment companies are facing big difficulties in both foreign and domestic markets. 

“Foreign partners try to force prices down. If we don’t accept lower prices, we will lose the orders. If we do, we will incur losses,” he said.

Nguyen Thi Thanh Huyen, general director of Garment Company 10, said Vietnam now has to compete fiercely with Bangladesh and Cambodia.

“Orders are leaving Vietnam for the countries which give support to their enterprises and can enjoy preferential tariffs when exporting products to large markets,” Huyen said. 

Meanwhile, as Thinh complained, Vietnamese enterprises are burdened with social insurance, healthcare and unemployment insurance premiums.

“We have to pay VND50-60 billion a year on the expenses. While the profit is modest, just 4-6 percent per annum, the cost has increased by tens of percent,” he complained.

The Ministry of Industry and Trade (MOIT) reported a 6 percent export increase in the first half of this year to US$12.8 billion.

MOIT saw growth in export value to the major markets, including the US, increasing by 5.9 percent to $4.29 billion, Japan with an increase of 2.9 percent to $1.04 billion and South Korea with an increase of 15.58 percent to $764.9 million.


Luong Bang