(According to TGVN, translated by TranHoaiDuc.com)
Vietnam's textile and garment industry is facing many difficulties due to a sharp decrease in orders because of the impact of the acute respiratory infection Covid-19.
Vietnam's economy is facing many difficulties due to the Covid-19 epidemic. The country is relying heavily on imports from China. (Source: Nikkei)
Vietnam Textile and Garment Corporation (Vinatex) said that if the epidemic continues, the company could consider stopping operation and stopping paying 50,000 workers.
Data from the Ministry of Industry and Trade shows that Vietnam's April and May textile orders have decreased by about 70% over the same period.
Even if the global epidemic is under control at the end of May, Vinatex is expected to lose about VND 1,000 billion (USD 42.4 million), double the Group's net profit of VND 510 billion in 2019.
Currently, European and American countries have continuously implemented the "lockdown" and the almost interrupted export transport chain has led to a sharp decline in demand, a fairly large blow to Vietnamese textile factories.
In order to "self-saving", textile factories are implementing two strategies: changing foreign market into domestic market, changing products from garments to producing antibacterial masks and protective clothing, others began sharing orders and raw materials.
The Covid-19 epidemic also shows that Vietnam's textile and garment materials are heavily dependent on imports from China.
In 2019, Vietnam's textile and garment exports exceeded US $ 39 billion and imported raw materials amounted to US $ 22.36 billion, of which fabric, yarn and raw materials accounted for 60%, 55% and 45% of the total quantity imported for production purposes.
Although companies are actively seeking other suppliers from India, Korea, Japan and other countries, the raw materials from these markets are not plentiful and difficult to meet orders. Small scale goods and prices are often higher than imported from China.
According to the Nikkei Asian Review, besides the current difficulties, Vietnam's advantages are still very prominent: tariffs and low tax rates are the biggest competitive advantage of Vietnam's textile and garment industry. This is also the biggest reason for many Chinese companies to invest in Vietnam.
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