Low foreign demand to hold back Vietnamese textiles | Business

A Vietnamese garment manufacturing unit. Weak demand from the US and EU is anticipated to have a detrimental affect on Vietnamese garment export. (Photograph: vneconomy.vn)

Hanoi (VNS/VNA) – Though textile export was using excessive
within the first half of the yr with a progress of 23%, insiders are pessimistic
that the remainder of 2022 won’t match up.

Nguyen Van Thoi,
Chairman of the TNG Funding and Buying and selling JSC., was involved that Fed’s
benchmark hikes amid excessive inflation would depress consumption demand within the US.

Comparable points would additionally hamper export to the European Union.

Because the US and EU are two main importers of Vietnamese clothes, the falling
demand would drag down their imports, to the detriment of Vietnamese textiles.

“Vietnamese textiles set an export goal of 43-44 billion USD this yr, however I
don’t suppose it will obtain the goal,” he stated.

“Garment export is prone to develop round 5% year-on-year.”

He additionally revealed that beforehand international companies positioned orders for Vietnamese
clothes six months upfront, however now they’ve to cut back the time window to
three months because of the excessive inventory of unsold merchandise attributable to low home
spending.

Than Duc Viet, Normal Director of the Garment 10 Corp., claimed that the
variety of positioned orders for his firm’s merchandise is massive sufficient to maintain it
busy till late 2022.

Nonetheless, there’s a danger that international companies may scale back or cancel the
orders to cope with mounting inventory of unsold merchandise. Greater gasoline and materials
prices, coupled with weak demand from overseas, are eroding the corporate’s revenue
margin.

Manufacturing unit 8 of the Ho Guom Group revealed that it usually obtained
manufacturing requests of 300,000-400,000 clothes prior to now, however from
Q2 complete manufacturing orders diminished to lower than 200,000 clothes.

“The outlook for garment export just isn’t very vibrant till year-end.
Beforehand, our companions had been at all times keen to position orders, however now their
demand has change into lukewarm”, stated Khong Van Tai, Director of the manufacturing unit.

Tran Nhu Tung, Chairman of the Thanh Cong Textile Garment Funding Buying and selling
JSC., shares the priority.

He held that demand for Vietnamese clothes would drop additional in This autumn because the
US has begun to implement Uyghur Compelled Labor Prevention Act, making companies
extra cautious about garment imports.

“Companies are unsure concerning the future, so that they reduce down on garment import
to keep away from danger”, he defined.

Vu Duc Giang, Chairman of the Vietnam Textile and Attire Affiliation, forecast
that world demand for Vietnamese clothes would change into extra risky within the
second half of this yr.

Excessive inflation within the US and EU would trigger costs to skyrocket, successfully
eroding shoppers’ buying energy. As weak buying energy reduces client
demand, textile companies are prone to really feel the pinch over the remainder of the yr.

To cope with the state of affairs, the chairman recommends that Vietnamese
producers search prospects elsewhere and be much less depending on the US and EU
markets.

“Vietnamese producers have to search out new companions in different markets to fill
the demand hole left by these within the US,” he added.

The final director of the Garment 10 revealed that his firm has to regulate
its manufacturing plan extra incessantly to cope with risky demand. 

“Beforehand, we adjusted the manufacturing plan quarterly or month-to-month, however now
we now have to do this weekly or every day. Now we have no different selection
as a result of it’s the solely option to adapt to the volatility”, he stated.

He advisable that Vietnamese producers go greener to achieve floor in
highly-demanding markets, thereby offsetting the demand contraction in
conventional markets.

He additionally advisable the producers not shed workers however quickly shift
their manufacturing to different merchandise to maintain the ball rolling whereas ready
for demand restoration.

Lastly, he urged the producers so as to add extra worth to their current merchandise to
carve out a distinct segment in conventional markets./.