Illustrative photo (Source: VNA)Under the development strategy approved by the Government, for the long term,the garment, textile, leather and footwear sectors are still key exportindustries of the economy.
The sectors will continue to promote investment in the production of materialsand auxiliary materials, as well as supporting industries.
They will encourage the production of fabrics from domestically produced yarnto reduce imports, and form a complete supply and value chain in the region.
For the leather and footwear industry, Nguyen Duc Thuan, Chairman of Lefaso,said domestic enterprises need to actively adapt to the requirements of themarket and brands on sustainable development standards for products. They mustreduce emissions in the production process, and increase the use of solarenergy and highly sustainable products.
Also, according to the strategy, Vietnam’s textile and garment industry expectsexport turnover to reach 50-52 billion USD in 2025 and 68-70 billion USD in2030.
The strategy also states that developing the fashion industry is considered anew direction. Accordingly, this sector will focus on developing designers, andraw material supply, production and distribution systems to form supply chainsand create sustainable foundations for the development of Vietnam’s fashionindustry as well as fashion centres in Hanoi and HCM City.
The strategy encourages enterprises to gradually switch their productionmethods to FOB (free on board) and ODM (original design manufacturer) to addvalue to products, and build a private brand to improve the competitiveness ofthe businesses and products.
Materials are the most difficult factor in the textile and garment industry.Therefore, to promote the development of the textile and garment supportingindustry, the textile and garment industry strives to have a localisation rateat 51-55% in 2021 - 2025 and 56-60% in 2026-2030.
To achieve this goal, it is necessary to attract investment in the developmentof supporting industries and the production of raw materials and accessoriesfor the textile and garment industry based on advantages in the free tradeagreements Vietnam has joined.
The projects to develop the supporting industry and the production of rawmaterials and accessories should be built in regions with a number of textileand garment enterprises to reduce transport charges and production cost andimprove competitiveness.
The strategy also mentions the role of State management agencies in encouragingenterprises to invest in producing fiber, yarn, textile and dyeing withadvanced technology and connections with domestic garment enterprises.
This approved textile and garment development strategy will helpform industrial parks with wastewater treatment areas to attract textile anddyeing projects. Now, the infrastructure for textile, dyeing and fabricproduction is still limited.
Domestic fabric production only reaches 2 billion metres per year, meeting25-30% of the demand of the garment industry. Vietnam’s textile and garmentindustry currently must import 60-70% of the raw materials. Vietnam has joinedmany FTAs, creating conditions for textiles and garments to expand exportmarkets with the tariff gradually reducing to zero.
According to Chairman of the Vietnam Textile and Apparel Association Vu Duc Giang,in the first quarter of 2023, the number of export orders decreased by 25-27%due to the decrease in global purchasing power.
Therefore, businesses can produce lower-value products, and diversify marketsand products to keep production and promote growth.
Chairman of Vinatex Le Tien Truong said that many businesses now only ran 70-80%of production capacity due to a reduction in consumer demand. So, Vinatex isnow focusing on raw material production more than garment production. Thematerials are always the first step in greening, creating a foundation forqualified materials as green requirements of the US and Europe.
Vinatex had organised the production of yarn products from recycled materialsor organic materials. At the same time, the raw material production factorieswere equipped with solar power to meet green energy standards.
According to forecasts,the situation of Vietnam’s textile and garment industry in 2023 would be worsethan in 2022. Therefore, businesses needed to follow the market's developmentsto have flexible solutions to ensure efficiency in production and business, aswell as promote the export of goods, Truong said./.
VNA
