Textile-garment firms gradually escape hardships

Production transformation

According to Than Duc Viet, General Director of Garment 10 Corporation (Garco 10), producing shirts is an advantage of the corporation. In 2023, due to the lack of orders, its shirt manufacturing factories have to shift to making trousers, polo- and T-shirts. In the past, shirts accounted for 60 percent of Garco 10’s production output, but the rate has now decreased to 39 percent.

“Work from home” trends and factors such as exchange rate, inflation, geopolitics and war have affected and will continue to have impacts on Garco 10’s customers. This requires the corporation to change its advantageous products. Each of its enterprises currently has to focus on three products.

Many domestic textile and garment companies have transformed production to meet the demand of importers

Pham Phu Cuong, Chairman of the Board at the Nha Be Garment Corporation Joint Stock Company, said that the company has never been in such a difficult situation as it is today. It has faced a decline in terms of number and size of orders as well as the price. To cope with the market situation, the company has assigned its factories in other localities to make suits, while the factory in Ho Chi Minh City is responsible for making stitchless products for the Lacoste brand and hunting clothes with the outsourcing cost amounting to US$30-50 per product.

The Nha Be Garment Corporation Joint Stock Company is willing to receive orders for difficult-to-make products and does not accept orders requiring it to work 15 percent over its manufacturing capacity. In early 2023, the company produced eight product lines, and this number has now increased to 10.

Many other domestic textile and garment companies have also transformed production to meet the demand of importers. Production transformation requires the companies to re-train workers and use new machinery and equipment.

Product quality is top priority

Currently, marketing, labor productivity and competition with foreign rivals are big concerns for domestic textile and garment companies.

Nguyen Van Phong, General Director of the Hue Textile Garment Joint Stock Company, predicted that 2024 will be a year of fierce competition in terms of price. The price of textiles and garments in 2024 is forecast to be not higher than the average price in the second half of 2023. Customers will require quicker delivery while placing smaller orders. They will also have stricter requirements in terms of product design and quality. “To meet customer demand, domestic textile and garment companies should improve worker skills, enhance labor productivity and increase automation in production,” Nguyen Van Phong said.

Nguyen Xuan Duong, Chairman of the Board at the Hung Yen Garment Corporation Joint Stock Company, predicted that in 2024 the outsourcing cost will not increase or even drop. Therefore, the company continues its efforts to increase labor productivity, accepting orders for not only high-quality products but also protective clothing. It is aware of the need to invest in automation, improve worker skills and reduce capital management costs.

Tran Thi Kim Chi, General Director of the Phu Bai Spinning Mill Joint Stock Company, said that the company will continue producing high-quality fibers according to market demand along with efforts to reduce costs.

The leaders of the Vietnam National Textile and Garment Group (Vinatex) advised businesses to diversify their markets and be cautious in diversifying products. In addition, they should study short- and medium-term market demand.

Vinatex leaders also suggested narrowing the labor productivity gap between domestic textile and garment companies to enhance their competitiveness. At the same time, it is necessary to accelerate digitization and production transformation as well as market access efforts.