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Vietnam’s garment sector expected to miss $31 bn target

Due to a lack of orders, the garment and textile industry in Vietnam will be hard pressed to achieve its export turnover target of $31 billion this year. Hence, the target needs to be lowered to $29 billion, observed Truong Van Cam, Deputy Chairman of Vietnam Textile and Apparel Association (VITAS). According to Cam, the current order shortage could result in the decade's lowest growth level of 4.3 per cent. In the first eight months of the year, export turnover of garment and textile products reached $18.7 billion thus meeting 64.5 per cent of the annual target.

Hung Yen Garment Joint Stock Corporation has 13 businesses with more than 14,000 labourers. The Corporation targeted an export turnover of $280 million but by the end of last month, it had only reached $160 million denoting a 10 per cent drop compared to that of last year.

Nguyen Xuan Duong, Chairman of the corporation's management board said that his firm had enough orders for this month. But in the by-gone years, the number of contracts at this time was usually enough for production until the end of the year. In addition, the exchange rate and salary policies have escalated the price by 2 to 4 per cent the textiles from other countries. Increasing production costs, limited orders and pressure by exporters to reduce selling prices have put a burden on the Corporation, Duong claimed.

He added that the exchange rate of the Vietnamese dong had not been adjusted for years, while the currencies of other countries were devalued by 18-20 per cent making their products 20 per cent cheaper than the Vietnamese ones. This, he said could be one of the reasons of orders coming down. Importers asked us to lower selling prices by 18-20 per cent, even 30 per cent. However, several still found partners from other countries, he said. Several other garment and textile firms have also received small orders until the end of the third quarter of the year.

 
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