Announcement

The textile and garment exports face many challenges in 2019

Summary

Investing in technology innovation and doing well in the process of traceability is considered a "key" to help the textile and garment industry overcome the challenges and create a breakthrough in 2019.

Updated on : 16-10-2018

Innovate technology, invest design

According to the Import-Export Department (Ministry of Industry and Trade), following the growth momentum of 2017, in the first eight months of 2018, the textile and garment export value reached over US$ 23 billion, up 15% over the same period last year. It is forecasted that export for the whole year of 2018, textile and garment can reach US$ 35 billion.

Regarding the story of textile and garment export, Mr. Vu Duc Giang, Chairman of Vietnam Textile and Apparel Association (Vitas) predicted: For the whole year, export of textile and garment will certainly reach US$ 34-34.5 billion. In terms of market, the exports will grow the highest in the United States. Currently, the United States accounts for nearly 50% of Vietnam's textile and garment imports, followed by the EU, Japan, Korea, China, Russia-Belarus, Middle East countries. Vietnam Textile has advantages in FTAs, the automation trends, and political stability. Therefore, the investment speed has increased very fast. With the current speed of development, according to Mr. Giang, the textile and garment exports might reach US$ 200 billion by 2035.

Looking optimistically ahead, in particular in 2019, Mr. Tran Thanh Hai, Deputy Head of the Import and Export Department, said that the textile and garment industry would continue to have good growth. However, the industry would face many challenges in 2019.

"This is the period when the textile and garment industry needs to move forward to a new position, a new role in the global textile supply chain. That is the transition from manufacturing and processing CMT) to buying the raw materials and selling the finished products (FOB), producing under a private design and label (ODM and OBM) in order to bring higher value in the supply chain," Hai said.

Around the story of textile development, Dr. Tran Van Quyen, representative of the Woolmark Company, assessed that the textile and garment industry had grown rapidly in the previous year, with the participation of many fashion brands and international retailers such as H&M and Zara… but the development is unbalanced. While the garment sector developed rapidly, other areas such as textiles, dyeing and design still had a long way to go. “The size of the enterprises in the industry is mainly small and medium, the mode of production is still mainly processing, FOB accounts for the low rate, the production capacity ODM limits... In the industrial revolution period 4.0, all of these impediments need solutions to be found for the textile and garment industry quickly,” he added.

Along the way, according to Mr. Hai, the industrial revolution 4.0 has a great impact on the textile and garment industry, forcing the enterprises to change, invest more strongly in equipment and personnel. In the coming time, instead of evaluating how many orders are received, what the annual growth rate is, the enterprises in the industry should try to renovate technology, equipment, promote investment in design, improve the quality of human resources ...

Make traceability well

In the process of deepening economic integration, the opportunities for the Vietnam's textile and garment industry are big, but the barriers and challenges posed are not small. Typically, it is the requirement for tracing the origin from the import markets.

According to Mr. Bui Viet Hong, General Director of the Vietnam Anti-counterfeiting Company Vina CHG, at present, traceability is one of the compulsory regulations of some countries such as the USA, the UK, the EU and Canada for domestic and imported goods. While the countries have been tracing the origins for quite a long time, this issue has only emerged in Vietnam in the last few years when Vietnam made commitments in FTAs. The percentage of Vietnamese companies applying traceability is only about 10%. "This is one of the challenges for the textile garment exporters in particular as well as other sectors in general. If we implement the traceability requirements well, it will not be difficult for our goods to enter into the markets," Mr. Hong said.

Around this issue, Mr. Quyet further analyzes: The consumers are more and more discerning, requiring the origin certificates of products, ensuring environmental protection as well as the factors related to chemical residue. In order to meet the requirements of consumers, the standards of the textile and garment import markets, typically the EU market, in the production and processing of products, the enterprises should pay attention to the origin elements of raw materials, processes, minimizing environmental pollution,...

On the other hand, as the trade war between the United States and China has “escalated”, some experts express that in addition to locating products throughout the supply chain, the traceability can also help the textile and garment enterprises prevent the maximum risk of origin fraud in the case that the Chinese goods are likely to spill into Vietnam to be labeled as Vietnamese goods, then export back to the United States.

Source: Customs News