Workers making goods for export at a Gia Toc Garment Export factory in Ha Nam province. (Photo: VNA)After being heavily impacted by the COVID-19 pandemic, textile and garmententerprises have gradually recovered and were one of the key export industriesthat recorded extraordinary growth rates in the first months of 2022.
Data from the General Department of Customs showed that the export value of thetextiles and garments sector in 2022 reached 37.57 billion USD, a gain of 14.7%year-on-year.
The US is the biggest import market of Vietnamese textile andgarments, worth 17.36 billion USD last year, up 7.9%. It was followed by theEurope Union and Japanese markets, reaching 4.46 billion USD and 4.07 billionUSD, up 34.7 and 25.8%, respectively.
Although the industry saw positive export prospects in the first andsecond quarters of 2022, it began to face many difficulties in the last twoquarters of the year as global demand for textiles and garments declined.
The export value peaked in August 2022.
The sharp decline in orders since September was attributed to a reversal of thetrend, causing the industry's export value to fall to 2022's lowest levelin the last quarter.
Vietnamese textile and garment enterprises' profits diverged in the fourthquarter after achieving impressive growth in the year's first quarter.
Statistics from 15 leading enterprises in the textile and garment industrycompiled by cafef.vn point outthat the total consolidated profit after tax in the fourth quarter of 2022 wasonly 440 billion VND (18.7 million USD), down 63% from the fourth quarterof 2021, amid high inflation and recession risks in the main export markets.
Vinatex surprised the market with a loss of 5 billion USD. Its profit after taxreached 450 billion USD in the same period last year, which was the mostprofitable enterprise in the textile group. This is also the first quarter thatVinatex has recorded a loss.
Vinatex said that due to the influence of China's zero-COVID policy, demand insome markets decreased at the end of the year, affecting the consumption situationand the prices of yarn inventory.
In the first months of the fourth quarter, businesses were trapped in adifficult situation when the yarn market's liquidity was almost zero, thegarment market's orders dropped sharply, and information about losses from itssubsidiaries, especially fibre units, was reported.
However, for the whole of 2022, Vinatex still made a profit of more than 1trillion VND, down 20% year-on-year thanks to the large profit in the year'sfirst half.
Similarly, Garmex Saigon Corporation also suffered a loss of approximately 59billion VND in the fourth quarter, while it posted a profit of nearly 35billion VND in 2021.
The company said it had to stop production at some factories from mid-August toimprove the quality, so most of the finished goods had to be kept in storagewhile the inventory had not been consumed. Garmex Saigon only reported a profitin the second quarter and lost all three remaining quarters last year, leadingto a net loss of nearly 66 billion VND in 2022, marking its first yearly losssince listing.
Other well-known enterprises in the industry, such as Song Hong Garment,Century Synthetic Fiber Corporation, and Everpia, experienced badresults, with their profits decreasing about 40-50% over 2021 to 55billion VND, 43 billion VND and 27 billion VND, respectively.
On the contrary, some leading companies recorded positive growth of up to twoor even three digits.
Thanh Cong Textile Garment Investment Trading's profit after tax surged 140%on-year to 60 billion VND in the fourth quarter. For 2022, it recorded anincrease of 95% in profit to 281 billion VND.
Phong Phu Corporation was the most profitable enterprise in the absolutefigure. Its after-tax profit reached 99 billion VND, 125% up year-on-year. Itreported a record profit since its operation of 486 billion VND last year, up42% over the same period.
Thanks to effective free trade agreements and increasing compliance with therules of origin to enjoy preferential tariffs as committed at the FTAs, theexport results of textiles and garments increased in 2022.
However, the Vietnamese textile and garment industry still faces manydifficulties and challenges when it is heavily affected by input costs, labourcosts and potential economic recession. The current slowdown of globaleconomies has lowered demand in the domestic market and major importingcountries including the US, Japan, and the Republic of Korea.
In a recent report, KIS Securities said that 2023 would be a challenging yearfor the textile industry due to the low demand for apparel products. Accordingto the Vietnam Textile and Apparel Association (VITAS), pre-orders for thefirst quarter of 2023 fell by 25-27% year-on-year, signalling a difficult year ahead./.
VNA
