This is a short-term difficulty that forces businesses to calculate, make efforts to overcome, as well as have a reasonable input development policy to achieve the set goals.

Production line at 10 Garment Corporation. Photo: Thanh Hai

Difficult in the short term

According to Vice President and General Secretary of the Vietnam Textile and Apparel Association (VITAS) Truong Van Cam, in 2022, the forecast of the Covid-19 epidemic situation in the world and Vietnam is still very complicated and unpredictable. But the positive signal is that major markets such as the US, Europe... have reopened, especially Vietnam has had a policy of safe and flexible adaptation, and effective control of the Covid-19 epidemic. economic recovery and development under Resolution No. 128/NQ-CP. In addition, new-generation free trade agreements are effective, Vietnamese textile and garment enterprises will have more opportunities to expand their markets.

As one of the leading enterprises in the industry, Garment 10 Corporation currently has orders until the end of August 2022, especially for veston products, there are orders until the end of the year. But May 10's biggest worry is that China's implementation of Zero Covid will disrupt the supply chain. General Director of Garment 10 Than Duc Viet shared that the company is currently adjusting its assessment of the market in the face of many fluctuations. It was the Russia-Ukraine conflict that caused the price of gasoline and gas to escalate, leading to an increase in the price of input materials. In particular, with 50% of textile and garment materials imported from China, while the country applies the Zero Covid strategy, it leads to a shortage of raw materials in the short term and existing high costs.

However, Mr. Than Duc Viet said that, even if the cost increased, the selling price of products would be difficult to increase, or if it did, it would not be possible to keep up with the growth rate of input materials. While the production of enterprises must still be maintained, but if input prices rise too high, the more enterprises make losses. In fact, transportation costs are 3 times higher than the average of the past 5 years. The disadvantage of exchange rate makes Vietnamese textile and garment enterprises less competitive against their competitors.

Currently, enterprises are forced to reorganize production lines due to labor shortages. Depending on the locality, the labor shortage rate is about 5-7% in the South (accounting for about 40% of the total export turnover of the industry) and 8-10% in the North. In particular, the lack of raw materials and accessories in the short term will make it difficult for businesses to meet orders for partners.

Flexibility to fix

Faced with many challenges, Mr. Than Duc Viet shared, for many years now, the unit has had a strategy of diversifying the supply of construction materials, about 600 suppliers of construction materials around the world to serve the products. business. In addition to promoting cooperation and association with domestic suppliers and suppliers, May 10 targets partners from India, Taiwan (China), Korea... This proportion will increase and have can be proactive in the next 5-10 years. But in the short term, there is no other way but to accept other shipping methods, seek sharing from longtime customers to limit the impact of China's Zero Covid policy.

"May 10 continuously follows each product code, order, at each production plant to make adjustments most effectively in the face of the current shortage of raw materials and accessories," said Mr. Than Duc Viet. Hopefully, in export markets like the US, Europe... after Covid-19 consumer demand will recover.In addition, when China - the world's largest textile export market applies Zero Covid, then it will is an opportunity with the movement of orders to Vietnam in both the short and long term.

Talking more about this issue, Mr. Truong Van Cam said that the vital point for textile enterprises is to have orders, enough workforce and control the Covid-19 epidemic. Currently, many textile and garment enterprises have orders until the third quarter of 2022, but it is not possible to predict what the market will be like after that because it depends a lot on the epidemic situation. Moreover, the difficulty of the textile industry is the input materials, especially fabric, textile dyeing.

“In some localities, we still feel that the textile industry causes pollution, so we are not interested in projects to develop this field. The textile and garment industry is coordinating with the Ministry of Industry and Trade to build large textile and garment industrial parks with wastewater treatment and environmental protection systems... to partly meet the source of raw materials for the industry," he said. .

Chairman of the Board of Directors of the Vietnam National Textile and Garment Group (Vinatex) Le Tien Truong said that in the first months of the year, there were many different signals of the market from rising oil prices, the Russian-Ukrainian political crisis, and the Reserve Department. The US Federal Reserve (FED) raises interest rates… These pressures make businesses more difficult, changing world demand.

However, he is quite optimistic, after the recent epidemic period, maintaining the continuity of Vietnam's position in the global supply chain is an advantage. Vietnam is a priority destination when large customers and large orders in the world return to place orders. The forecast that Vietnam's textile and garment industry in general can achieve an export turnover of 43 billion USD in 2022 is completely reasonable. Because, the world forecasts that the total demand for textiles and garments in 2022 will increase by about 3%.

Khac Kien

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