Making breakthroughs for garment and textile sector

However, the National Garment and Textile Group (Vinatex) cautions that a number of thorny problems, particularly those dealing with the procurement of raw materials, must be overcome if such an optimistic outlook is to be achieved.

The sector is overly dependent on the importation of raw materials to meet its production quotas, which adds significantly to its production costs Vinatex reports.

Additionally, businesses are under financial pressures resulting from increases in other production costs such as electricity and transportation, which are even more exaggerated by an increase in the minimum wage that went into effect on January 1 of this year.

Further exasperating the sector is the lack of highly trained workers and an uneven distribution of them in regions throughout the country, the report states.

Deputy Minister of Foreign Affairs Nguyen Thanh Son in turn has stated that weaknesses in terms of design and product quality also plague the sector.

“To be competitive in the international market, businesses need to overcome these design and quality defects”, Son said.

“The goal of becoming a full member of the World Trade Organization (WTO) by 2018, cannot succeed if businesses do not rise to the challenge and effectively resolve these issues.”

Vinatex also points out that, local businesses face challenges from “black market activities” such as illegal smuggling in the domestic market along with an influx of a myriad of fake and inferior quality products with the phony “Made in Vietnam” label flooding the market.

These “black market” activities are denting the images of many high-profile Vietnamese garment and textiles businesses and creating a lack of consumer trust in their international consumers.

Vinatex’s said its priorities are to maintain an export growth by focusing on increasing the rate of growth in original design manufacturer (ODM) products to 12-14%. Regarding Free-on-Board (FOB) products, the group must optimise orders to bring added value to their products.

Vinatex will diligently strive to duplicate a production model in 2014 which has been applied successfully in similar businesses to reduce stockpiles, improve labour productivity and increase the competitive edge of products.

To develop domestic material sources, Vinatex said that it is imperative to strengthen coordination between garment and textile businesses and production sectors in order to shift resources of materials among businesses.

The promotion of both foreign and domestic investment in garment and textile material will facilitate an increase in the rate of localization and increase the added value of products as well as reduce import surplus.

Concurrently, the State should devise much improved zoning plans to support the development of the dyeing and textile industry to produce high-quality raw materials in country.

Without good materials produced in Vietnam, the garment and textile sector will not be able to satisfy the quality demands of Vietnamese and international consumers.