From the second half of 2022, businesses face many difficulties and challenges

Mr. Truong Van Cam, Vice President and General Secretary of VITAS, said that the production and business situation of textile and garment enterprises in the first 7 months of 2022 is quite favorable. Orders are abundant, the workforce is gradually stabilizing.

Total export turnover in the first 7 months of 2022 was estimated at 26.55 billion USD, up 16.5% over the same period in 2021. Trade surplus reached 11.07 billion USD, up 31% compared to 7 months of 2021. Settle 1.9 million industrial workers with an income of about 8.5 million VND/person/month.

THREE EXISTING TEXTILE CHALLENGES

However, according to Mr. Cam, from the second half of 2022, businesses face many difficulties and challenges, although the whole industry still keeps the goal of striving to reach 43.5 billion USD for the whole year of 2022. The VITAS representative pointed out that 3 big challenges that Vietnamese textile and garment enterprises are and will have to face.

Firstly, as the import and export industry is very large, the textile and garment industry is directly affected by unpredictable fluctuations in the world. China, Japan, Taiwan... are still applying strict anti-epidemic measures and have significantly affected the supply chain of raw materials, auxiliary materials and product consumption.

In addition, economic difficulties and high inflation rates in major textile and garment consuming markets such as the US and EU have made the purchasing power of consumer goods, including textiles and garments, significantly reduced. affecting orders and unit prices of textile enterprises from now until the end of 2022. Therefore, many businesses fall into a shortage of orders.

The Russian-Ukrainian military conflict is still complicated, with no end, affecting a number of Vietnamese textile and garment markets such as Russia, Ukraine and other countries in the region.

Meanwhile, textile and garment enterprises have to bear costs increased by 20-25% because the price of raw materials, fuel and auxiliary materials has increased rapidly since the beginning of the year. Specifically: crude oil and gasoline prices in the country and in the world fluctuated at a high level; transportation costs are 3 times higher than the average of the past 5 years…

Not only that, from the beginning of the year until now, the local currencies of many countries in the region have depreciated significantly against the USD. Example: The yuan depreciated 5.3%; Korean Won 4.7%; NT$ 6%; Thai Bath 3.4% and Japanese Yen nearly 16%, while VND only depreciated 1.8%…. detrimental to exporters.

In addition, challenges from major Vietnamese markets such as the US and EU will also create pressure for businesses in the coming time, such as the issue of tracing the origin of cotton and products made from Xinjiang cotton when "Religious". Law on prevention of forced labor with Uighurs” effective from June 21, 2022 or intended to collect carbon fees, requirements on recycled and reused content for imports in the EU market .

Secondly, according to Mr. Cam, the textile and garment industry is a labor-intensive industry and is greatly affected by the impact of Covid-19. Many workers who returned to their hometowns did not return, and recruiting new workers also faced difficulties. Especially the situation that many workers withdraw their social insurance once, work for a short time and then take leave to enjoy unemployment insurance, which has caused labor instability...

Thirdly, after a long time focusing on fighting the epidemic and maintaining production, many textile and garment enterprises have faced many difficulties in capital for production and business, while the support packages approved by the National Assembly of VND 350,000 billion have been slow to be approved by the National Assembly. implementation.

In addition, tax policy, especially the State's tax refund for businesses is very slow, making it even more difficult for businesses.