Opportunities for strong growth of textile and garment industry

Update: 11-03-2019 | 08:34:09

With the participation of free trade agreements (FTAs) in Vietnam with many other advantages, the domestic textile industry is expected to grow strongly this year.

Production line at Binh Duong Garment Company. Photo: PHUONG LE

Opportunity to accelerate

The Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) was officially in effect from January 14, 2012, so Vietnamese exports to six countries that have ratified CPTPP are Mexico. Japan, Singapore, New Zealand, Canada and Australia can make a declaration of product origin (C / O) to enjoy tax incentives with a tax cut of more than 60% and increase to 80% after 3 years . CPTPP is expected by enterprises (enterprises) to create a breakthrough in all aspects, from domestic institutional reforms, to create an investment and business environment to attract domestic and foreign investment, eliminate tariff barriers, market expansion, export growth, production and business activities of enterprises in the province continue to be stable and developed.

Mr. Le Hong Phoa, Chairman of Binh Duong Garment Association, said that starting from March 2016 onwards, businesses will be abundantly exporting orders due to the season of the textile industry. Currently, orders are showing signs of moving from China to Vietnam due to the impact of the US-China trade war and the advantages of the FTAs Vietnam has brought, especially from CPTPP. According to Mr. Phoa, in 2019, textile enterprises in the province will have more orders than the previous year, estimated to increase by 5-10%.

Ms. Phan Le Diem Trang, Vice Chairman of Binh Duong Garment Association - Director of International Garment Company (An Dien Commune, Ben Cat Town), also said that with the FTAs that Vietnam participated in, it was effective. force, 2019 promises more member companies than the previous year. Particularly for International Garment Company, up to this point, it has signed orders until the end of June 2016.

Active source of materials

According to experts, 2019 is the year when Vietnam starts implementing many FTAs, the textile industry has more growth opportunities but also many challenges. The biggest challenge is that if businesses in the industry do not invest, improve competitiveness will be difficult to compete with products from the countries participating in the agreement, especially the origin of input materials. .

Mr. Phoa said, textile enterprises need to proactively source raw materials to solve the dependence of raw materials dependence from countries where Vietnam has not yet signed FTA. Besides, domestic textile enterprises need to provide specific solutions, supply chain linkage to overcome difficulties and challenges that market fluctuations cause.

According to Ms. Trang, in 2018, International Garment Company changed the operating model from processing products to producing products. As a result, the company has been more proactive with customers; export revenue increased; more orders than in 2017.

Currently, domestic textile enterprises in general and in Binh Duong in particular have been developing advanced technology, management, building and developing a team of designers to produce in FOB form (self master material), ODM (self-design, production). Companies are also closely linked to address the supply shortage; focus on producing high-quality products, bringing Vietnamese products and Vietnamese brands to the world market.

However, according to textile experts, in order for textile enterprises to have favorable conditions, increase competitiveness, make good use of opportunities from FTAs, managers should continue to persist in implementing measures to improve administrative procedures, simplifying specialized inspection procedures; and promptly remove difficulties for businesses, ensuring a clear business investment environment.

Reported by Phuong Le – Translated by Vi Bao

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Opportunities for strong growth of textile and garment industry

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