Vietnam relies on textile exports as an important economic pillar. However, affected by factors such as supply chain disruptions, labor shortages, and soaring freight costs, industry insiders warn that Vietnamese apparel exporters may experience a turmoil in the second half of the year, which will affect the performance of textile and garment exports. Bring variables.
Vietnamese media “VnExpress” reported that according to Vietnamese securities company VnDirect, due to the severe COVID-19 epidemic in South Vietnam, strict epidemic prevention regulations have been implemented in many regions, including the economic center of Ho Chi Minh City since 23 With the implementation of the city-wide lockdown since today, many textile and garment manufacturers are facing serious shortages of raw materials and labor.
Vietnam Textile and Apparel Association (VITAS) stated that 30%-50% of local small and medium-sized enterprises Textile and garment factories were forced to temporarily suspend operations because they were unable to cooperate with the implementation of the “three local principles.” Under this situation, many customers have transferred their orders to other countries, which is a heavy blow to Vietnam’s garment and textile industry.
Currently, the Vietnamese government implements the “three local principles” for the Greater Ho Chi Minh City (including Ho Chi Minh City, Dong Nai Province, Long An Province, etc.), which means that factories must arrange for employees to “produce locally” , eat locally, rest locally” to keep the production line running.
VITAS Vice Chairman Truong Van Cam warned that if the epidemic cannot be controlled as soon as possible, Vietnam’s clothing and textile products may not be able to achieve the annual export target of 39 billion U.S. dollars, and may ultimately only reach 330 to 39 billion U.S. dollars. $34 billion.
At the same time, logistics costs, which account for about 9% of Vietnam’s garment and textile production costs, have also increased sharply. According to VnDirect, container rentals have tripled significantly in the first half of this year.
Reports indicate that many textile and garment companies ship materials to North Vietnam in order to keep production and delivery uninterrupted, but must bear high transportation costs. Vu Duc Giang, chairman of VITAS, said the most feasible solution now is to vaccinate textile and garment factory workers in industrial parks as soon as possible.
VITAS statistics show that from January to July this year, Vietnam’s garment and textile exports totaled nearly 23 billion U.S. dollars, a significant increase of more than 50% compared with the same period last year, surpassing Bangladesh in one fell swoop. , becoming the second largest exporter of garments and textiles after China. </p
