The Foreign Investment Advisory Services (FIAS) has recently undertaken a survey asking international buyers about their view on the competitiveness of Vietnam’s apparel industry, and their concerns, Saigon Times newspaper reported November 1.
The survey information was shared by Pham Thi Hoai An, a local compliance officer of Perry Ellis International (PEI), at an event PEI organized for local suppliers’ factories in Ho Chi Minh City.
The 17 international brands from the U.S. and EU who responded to the survey consider Vietnam highly competitive with other regional rivals, especially in social and political stability, labor and environmental laws, and commitment to fight corruption.
International buyers ranked Vietnam second after China in terms of labor skills and productivity, third after China and Indonesia in terms of inputs such as the supply of textiles and accessories.
However, about 58.8 per cent of the surveyed buyers (10/17) have concerns that some Vietnam-based apparel factories demand that their workers work over time too much, and 65 per cent of buyers (11/17) said factories do not offer adequate payment for overtime work.
Other concerns raised by these brands include inconsistencies in the laws, insufficient availability of input materials, and differences in the minimum wages required for foreign versus locally invested companies.
The survey's results were publicized by Perry Ellis International, a U.S. apparel importer, said Saigon Times newspaper on its Web site.[www.saigontimes.com.vn]
It costs international buyers from US$1,200 to US$1,900 for a factory auditing/monitoring visit. Thus the aggregate compliance monitoring costs incurred by brands can be significant. For example, if a supplier works with eight buyers, the factory might be subject to auditing/monitoring 32 times a year. The costs for all this auditing/monitoring could be as high as US$96,000 a year, the newspaper noted.
In the past ten months, Vietnam exported US$6.41 billion worth of apparel products, an increase of 31.1 per cent this year, and imported US$3.2 billion of cloth, an increase of 34.6 per cent this year, excluding US$1.7 billion of apparel and leather accessories, which also rose 34.6 per cent over last year, said the General Statistics Office. (www.saigontimes.com.vn, GSO October Edition)
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