With a relatively abundant number of orders, businesses are negotiating and signing contracts for 2025. To increase efficiency, businesses need to prepare resources, boost production, etc.
Achieving the set target
General Director of Vietnam Textile and Garment Group (Vinatex) Cao Huu Hieu said that the garment export market has recovered in recent months due to the shift of orders from China, Bangladesh, and Myanmar to Vietnam. Inventory in key markets such as the US, Europe, and Japan tends to decrease gradually, while increased purchasing power helps restore demand for orders from partners. Garment orders in the fourth quarter of 2024 and the first quarter of 2025 will continue to be abundant, but unit prices have not improved.
In the long term, when the policy of cutting interest rates in major markets takes effect, creating stable jobs and increasing purchasing power will lead to improved unit prices. For the yarn industry, raw cotton prices are greatly affected by speculation and logistics factors, so it is difficult to predict. It is expected that in the fourth quarter of 2024, the demand for yarn in general will not be able to recover strongly, in addition, increasing freight rates, fierce competition with Chinese yarn, etc. will make the efficiency of the yarn industry show no clear signs of improvement.
In the context of the world market continuing to be complicated, gasoline prices, freight rates fluctuate strongly, and the trade economy recovers slowly, but the Vietnamese textile and garment industry still maintains a fairly good growth rate. According to information from the Vietnam Textile and Apparel Association (Vitas), the industry’s export turnover will reach the target of 44 billion USD, up 11.26% compared to 2023. In particular, the US continues to be the largest market with export turnover reaching 16.71 billion USD, up 12.33%; Japan, 4.57 billion USD, up 6.18% compared to 2023, ...
Besides the positive signals of the market, Vitas also believes that businesses need to be well prepared for all challenges, identify difficulties and disadvantages to proactively focus on improvement, ensure to promote advantages, and limit weaknesses. Thus, regardless of market developments, businesses are still proactive, operating production and business flexibly and sustainably.
Chairman of the Board of Directors of Thanh Cong Textile-Investment-Trade Joint Stock Company Tran Nhu Tung affirmed that up to now, the total revenue of the unit has achieved the planned growth rate, after-tax profit reached more than 136% of the annual plan. In which, textile revenue comes from three main segments: garment products accounting for 75%, fabric 15% and yarn accounting for 8%. Currently, the unit has received about 90% of the revenue plan for orders in 2024.
"According to the forecast, the situation of Vietnam’s textile and garment exports is positive in the last months of the year due to the festive season, so the company’s production and business plan will be completed soon. In addition to traditional products, the unit is promoting environmentally friendly products, recycled products and high-value products to enhance the product value chain. In addition, the company continues to expand markets with much room, seek new markets, and at the same time promote the domestic market to increase business efficiency", Tung emphasised.
Proactive in the face of difficulties
According to the report of the Ministry of Industry and Trade, the export turnover of Vietnamese goods to markets, especially markets that are major trading partners, has recovered well and achieved high growth rates at double digits. The US continues to be the largest export market, followed by China, the Republic of Korea, Japan, etc. Trade promotion and export market expansion continue to be directed by the Ministry of Industry and Trade, with trade offices in countries operating actively, combining the exploitation of traditional markets with the expansion of new markets such as Africa, Eastern Europe, Northern Europe, West Asia, etc.
It is expected that the increase in global demand for goods at the end of the year will create conditions for businesses to increase orders and boost production. The Ministry of Industry and Trade will continue to support industries and businesses to promote export activities to key markets, taking advantage of incentives brought by free trade agreements (FTAs) such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Vietnam-EU Free Trade Agreement (EVFTA), the Regional Comprehensive Economic Partnership Agreement (RCEP), etc.
Evaluating the effectiveness of FTAs, Chairman of Vitas Vu Duc Giang said that FTAs help businesses expand their markets and customers, thereby contributing greatly to the growth of the industry. Notably, the CPTPP has created great opportunities for Vietnamese textiles and garments to access new markets such as Canada, Australia, New Zealand as well as helping businesses adapt to the purchasing methods of importers in the bloc, creating very clear growth when exporting to countries within the bloc, especially the Americas.
In addition to competitive pressure from rivals, businesses are also facing many challenges due to market fluctuations. Due to the rapid change in global consumer culture, consumers demand that design products meet the requirements of style and dress sense of each country and each different culture. Next, garment products must be highly applicable and sustainable, meeting the requirements of greening, etc.
"Domestic textile and garment enterprises need to further improve the capacity, skills, and qualifications of workers; be flexible in production, accept difficult orders, have complex technical requirements, short production time, and fast delivery to meet consumer demand," Giang emphasised.
Commenting on the difficulties in the coming time, Vinatex General Director Cao Huu Hieu said that although the number of orders is abundant, the unit price is low and has not improved much; the demand for yarn has not yet recovered strongly, in addition to increased transportation costs and production costs, etc., which will create significant pressure on the business’ operating efficiency.
Faced with increasing customer demands for difficult and differentiated products, businesses must adhere to the goal of participating in the supply chain with a solid position, being a priority partner of major manufacturers and distributors in the world. At the same time, implement the strategic goal of becoming a one-stop destination for providing complete solutions for textiles and green fashion as well as persistently training staff to meet new market requirements. In addition, businesses need to be extremely cautious, closely manage production and business activities to successfully complete the set goals, avoid depending on the luck of the market, thereby maintaining growth targets.
