Export garment producers see decline in orders

Vu Duc Giang, VITAS Chairman, said they were considering moving export garment orders from Vietnam to Cambodia, Laos, and Myanmar, because customers of those countries would join the preferential export tax when exporting to the US and Europe.

Meanwhile, the Trans-Pacific Partnership Agreement (TPP) and Vietnam-European Free Trade Agreement have not yet come into effect. Therefore, partners of Vietnam's export garment producers could not join any preferential tax regime from those agreements. 

According to the General Department of Customs, Vietnam gained a year-on-year growth in export values of garments at 7% to US$7 billion in the first four months of this year, lower than the expected rate of 10%. Import of materials for export garment production dropped in four months.

Hoang Trong Khang, Deputy Head of the Import and Export Division at the Viet An Joint Stock Company specialising in garment exports to the US, EU and the Republic of Korea (RoK), said the company saw reduction in exports to some major markets, including RoK.

In fact, export orders for production in the second and third quarters have reduced by 5% to 7% against the same period last year, according to the association. The local enterprises were worried about the ability to move export orders of traditional customers to other regional countries in the second and third quarter. That situation would affect exports of enterprises as well as the garment industry.

To take more export orders and set up professional production and business activities, the Vietnam Textile and Garment Group (Vinatex) has developed Vinatex International Joint Stock Company (VTJ) and the Supply Chain Development Center (SCDC).

The two businesses would combine and support member companies of Vinatex to exploit and expand the export market, seek customers and develop a supply chain from material to finished products, Tran Quang Nghi, Vinatex Chairman, said.

So far, the SCDC has had eight regular customers for garment products and been developing 20 customers in the US, the Europe, RoK and Japan.

The centre has had 10 customers for cotton and fibre and has been developing 30 customers of the products in Chile, China, Thailand, and Malaysia, in addition to RoK.

VTJ has had 10 customers and it has concentrated on the US and Japan markets with large export volumes.

Vietnam expected to gain total export value of US$30 billion for this whole year, which is US$3 billion more than in 2015.