Vietnam apparel companies raise concerns over 2H production

Although the number of orders has increased, businesses face problems delivering on time. VNA/VNS

HANOI: Domestic textile and garment companies will face mounting pressure in production and business in the second half of 2024 due to unstable orders and other factors.

Although working with many partners, the Southern Textile and Garment Corp has struggled to secure orders because customers are still cautious about market developments.

Nguyen Hong Lien, deputy general director of the Hue Textile and Garment JSC, said that in regard to knitwear orders this year, customers have deferred their orders until the third and fourth quarters.

Although the number of orders has increased, businesses face problems delivering on time.

The Vietnam Textile and Apparel Association said apparel companies faced many difficulties this year, especially the increase in shipping fees due to the geopolitical conflict affecting shipping routes via the Red Sea, with some customers putting pressure on the textile and garment businesses to share the fees.

There are also added pressures from the European Union market that require sustainable fashion and textile strategies, starting with design, sustainable production, consumption of textile products and even the recycling of clothing waste.

Many brands have requested that until 2030, firms must use renewable energy, which accounts for 30% of power in production, and by 2050, 100%.

In addition, the labour issue is also a big problem. There is a shortage of labour as many staff have returned to their hometowns to seek other job opportunities.

To fill the gap, some entities have recruited workers from other countries.

Policies on unemployment and social insurance have also created challenges in the labour market, including a rise in the minimum wage.

Truong Van Cam, deputy chairman of the Vietnam Textile and Apparel Association, said the government’s 120 trillion dong programme on building social housing needs to be accelerated to ensure workers stay longer.

Cam said that in the first quarter of this year, textile and garment exports improved with higher orders, and many businesses have contracts to produce until the third quarter.

Nguyen Hung Quy, general director of the Southern Textile and Garment Corp, said the increase in orders was partly due to moving from China and some South-East Asian countries to Vietnam.

In the first three months, the garment and textile sector’s export turnover grew nearly 10% year-on-year to around US$10bil, creating momentum for enterprises to meet the target of US$44bil for the year.

The Vietnam Textile and Apparel Association said that, since the beginning of the year, global textile and garment companies and supply chains have continued to choose Vietnam to place orders.

Vietnam ranks third in the world for textile and garment exports. — Viet Nam News/ANN

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