Exports see sharp increase

Le Quoc An, Chairman of the Vietnam Textile and Apparel Association (VITAS), has announced that the sector’s export value reached more than US$1 billion in July, bringing the turnover in seven months to US$5.8 billion, up 17 percent compared to last year’s same period.

So it will not be that difficult for the sector to meet this year’s target of earning US$10.5 billion, said An.

Exports to the Republic of Korea saw the highest increase of 80 percent, thanks to a drop in import taxes under the ASEAN-RoK agreement, followed by ASEAN countries (30 percent), the US (23 percent), Japan (15 percent), and the EU (1.5 percent).

As usual, textile and garment exports began to rise in the second quarter and will reach their peak in the third quarter of this year, said the General Department of Vietnam Customs.

According to the Ministry of Industry and Trade, many businesses now have enough orders to fill until the third or even fourth quarter of this year.

Vietnamese textiles and garments now account for about 2.69 percent of global market share. In the US and Japan, Vietnam is the second biggest exporter after China.

In addition to finished products, businesses are now promoting the export of raw materials to meet the yearly target of earning US$1.8-1.9 billion. Vietnamese cotton is now exported to new markets like Turkey and Brazil.

VITAS Secretary General Nguyen Son said that cotton businesses are faring well in the wake of the world economic recovery, especially after Brazil and Turkey decided to levy anti-dumping tariffs on Chinese cotton.

With its cotton industry growing fast to meet demands for both consumption and export, China has started to import cotton from Vietnam and this is a good opportunity for Vietnamese businesses, said Son.

He predicted that with businesses operating at full throttle, the cotton industry of Vietnam would see an impressive growth in 2010.

Cotton exports are on the rise but the total turnover is still far from expected. In 2009, Vietnam earned more than US$400 million from exporting raw cloth which was then re-processed and re-exported to other countries.

Mr Son said that as the dying industry has not yet fully developed, the garment and textile sector is facing major difficulties. Mr. Son proposed that the country should come up with measures to deal with the export of raw cloth and the import of finished cloth.

Mr An said that the Vietnam National Garment and Textile Group (VINATEX) has invested in some major programmes, encouraging the use of domestic materials in production, and building more weaving and dying factories in Tra Vinh and Thai Binh provinces.

In addition, the garment and textile sector is restructuring its operations and moving to areas that have an abundant workforce to stabilise production, save input costs and produce high quality products to raise their added value and competitiveness.

Cornering the domestic market

VINATEX's General Director Vu Duc Giang said that businesses are joining hands to corner the domestic market.

In the first half of this year, the total earnings from the domestic market reached VND6,000 billion, a year-on-year increase of 28 percent. The sector has more than 1,500 outlets and agents all over the country, creating a firm foundation for the sector to develop comprehensively and sustainably.

VINATEX’s chain of shops attract thousands of customers a day with an average revenue of around VND300 million each.

Many businesses, such as Garment Company No10, Nha Be, Viet Tiet, and Thang Long have also opened shops and linked up with distributors to develop chains of shops. Furthermore, they have expanded their distribution networks and promoted their products in rural areas.

With the achievements they have made in the past 7 months, Mr An emphasised that garments are filling a niche in the domestic market with an average growth rate of 15-18 percent. Despite a small decline in some export markets, most businesses have still managed to maintain a higher export growth than in the same period last year.