In the first two months of this year, garment exports hit a record high, reaching US$867 million, a year-on-year increase of 45 percent. Even with this growth, Le Quoc An, chairman of the Vietnam Garment and Textile Association, warns that garment makers should be cautious to brace for difficulties ahead.

Mr An attributes the rapid growth to the automatic visa licensing mechanism for garment makers exporting products to the US market. He says most garment makers have capitalised on this mechanism to boost exports right from the beginning of the year, while China, which is the world leading garment exporter and Vietnam’s tough rival, has also faced export quotas imposed by the US and the European Union.  

Mr An warns that once China’s quotas are lifted, Vietnam’s garment sector will fall into recession after a period of heated growth if it is not restructured to sharpen its competitiveness.  

“We will find it hard to stand firm amidst the domination of China-made garments across the world,” says Mr An. “In addition, we will face tough competition from India, Bangladesh and Pakistan, which are boosting their cutting-edge exports.”   

According to Mr An, Vietnamese garment makers must find solutions for overcoming difficulties that would prevent them from increasing the effectiveness of business operations.

One of the largest obstacles to their export activities is the cumbersome customs procedure, which takes up to seven days to go through in Vietnam, while it takes only 10 minutes in Singapore, 60 minutes in New Zealand and seven hours in Thailand. This is clearly a disadvantage for Vietnam.

Many garment makers have complained that they lack information and detailed statistics from State agencies. So far they have only been informed of the sector’s monthly and yearly export turnover. With inadequate information, they cannot map out business strategies.

Most enterprises have proposed that State agencies provide them with updated and specific information about the sector’s activities every quarter so that they can devise orientations and market forecasts to cope with new problems in time.