Vietnam’s garment industry looks to $30 billion exports

The target was announced by Le Tien Truong, the general director of Vietnam National Textile and Garment Group (Vinatex).
Truong said the development of the textile and garment market at home and abroad would continue improving due to growth in the US economy, which would spur consumption. This favourable background would support the domestic textile and garment industry in reaching its export target this year.
“To reach this target, the industry needs a strong performance by enterprises and the expertise of management to support the industry’s development,” Truong told the Vietnam News Agency. Truong added that improvements in infrastructure would also support this goal.
Further, enterprises should improve productivity, reduce cargo delivery times and strengthen distribution systems to international markets, the official said.
He said garment and textile enterprises have received enough orders to keep them busy for the first quarter of this year.
However, he was concerned that Vietnam’s garment and textile sector would face challenges, including a lack of support on tax policies, and that several important trade deals, such as the EU-Vietnam free-trade agreement will not take effect in 2017. Further, the proposed Trans Pacific Partnership is under a cloud amid a transition to the Trump administration in the US.
He said competition would become fiercer as other countries try to attract orders thanks to advantages in tax and exchange rates, he said.
Instability in the EU economy may also affect the garment industry in Vietnam. Notwithstanding that, the industry was optimistic about the benefits of the EU pact and Vietnamese companies were preparing to make the most of the opportunities, the official said. The trade deal with Europe comes into effect in 2018.
After the FTA is in place, Vietnam could compete with other countries exporting garments to the EU through the Generalised Scheme of Preferences (GSP), which allows developing countries to pay less or no duties on some exports to the EU. Countries that enjoy these benefits include Cambodia, Bangladesh and Myanmar.
Meanwhile, other bilateral and multilateral trade agreements will bring more opportunities in exporting textile and garment products to small and medium-size enterprises, Truong said.
In 2016, Vietnam’s garment industry saw lower than expected results, with $28.3 billion in exports, up 5.7 percent year on year, Truong added.
 Vinatex earned more than $2.5 billion, an increase of 5 per cent over 2015, with a pre-tax profit of over 41 trillion dong (Bt64.3 billion) on a 5 per cent year on year increase. Also, its employees’ average income rose 8 per cent over the previous year, to reach 6.7 million dong a month. 
Last year was a challenging one for the industry worldwide. Major importers, including the US, the EU and Japan, experienced low or decreased demand for garment and textile products, Truong said.