Workers at a garment-textile firm (Photo: VNA)HCMCity (VNS/VNA) - Armed with experience from coping with thefirst wave of the COVID-19 epidemic, many textile and footwear enterprises arequietly confident they can alter their plans as required and find new marketsto cope with the second.
The situation is worsening, according to most companies in the two sectors asthe epidemic returns to Vietnam and continues to rage in many countries aroundthe world.
Le Tien Truong, general director of the Vietnam National Textile and GarmentGroup, said that in the first six months of the year, though affected a greatdeal by the COVID-19 pandemic, his company sustained its operations and cashflows thanks to its decision to produce face masks and personal protectiveequipment (PPE).
But the situation would be very different in the second half since the demandfor those products is shrinking rapidly, he said.
The fact that many manufacturers switched to producing PPE has seen supplyshoot past demand, he added.
Since the global outbreak began in April, many Vietnamese garment and textilebusinesses have been told by their US and EU partners that they wouldtemporarily stop taking delivery of goods.
Pham Xuan Hong, chairman of the HCM City Association of Garment TextileEmbroidery and Knitting, said this was because governments in the US and EUhave declared a state of emergency and tightened border controls due to therapid spread of COVID-19.
“They have asked Vietnamese businesses to suspend delivery, including of thoseen route, until borders are reopened.”
He said the US and EU are two important textile export markets for the country,while half of all exports from HCM City go to the US and 15-18 percent to theEU.
“Partners in these markets have announced the suspension of deliveries, meaningthe market for textiles and garments has narrowed by nearly two-thirds.”
Truong said developing the domestic market is the most feasible way to survivethe pandemic.
Though the domestic market accounts for only 10 percent of the industry’scapacity and cannot fully mitigate the unemployment problem, it is still a solution, he said.
Support from the Government in the form of access to cheap credit and deferredtax payment is also imperative, he said.
Phan Thi Thanh Xuan, general secretary of the Vietnam Leather, Footwear andHandbag Association (LEFASO), too said though the domestic market is verysmall, developing it would be a key solution amid the difficulties inexporting.
Nguyen Van Mieng, general director of the Nam Dinh Textile and GarmentCorporation, said companies have restructured their markets to sustain jobs. Inthe past, his company produced 1,100 tonnes of yarn and exported 65 percent ofit, but has now cut it to 45 percent.
It produces around 1.2 million metres of fabric per month, but this is likelyto decrease to 23,000-300,000 metres in the last two quarters of the year, hesaid.
The company is seeking to expand its market for new products in the north andtaking advantage of dyed fabrics to sell finished products and supply togarment companies, he said.
It also wants to strengthen the yarn-weaving-dyeing links so that allcompanies in the chain could benefit, he added.
The EU-Vietnam Free Trade Agreement (EVFTA) that took effect on August 1will reduce import taxes on Vietnam’s garment exportsby more than 70 percentage points.
Vietnamese footwear and textile and apparel enterprises will benefitsignificantly from the EVFTA because of the tariff cuts, according to Bao VietSecurities Joint Stock Company.
With most other countries that export textile and garments to the EU not havinga trade deal with the bloc, the EVFTA would open a great opportunity forVietnam’s footwear, textile and garment exports if companies enterprises meetorigin requirements, it added./.
VNA
