Investment diversification may cause Vietnam’s apparel sector to fall short of its export targets this year, industry specialists were cited by the Vietnam News Agency as saying.
The textile and garment industry is expected to surpass crude oil as the country’s leading export earner this year to reach US$9.5 billion, up 23 per cent on year. However, the goal is not easy to be reached as many manufacturers have restricted their core operations to enter into new business areas, VNA noted.
Instead of investing in core operations, many firms are opting to inject more and more capital into property, services sector as well as securities, citing their profit potential.
Vietnam Textile and Garment Group (Vinatex), the nation’s biggest garment maker, has shifted the focus of its investment to other areas. Besides investing in property and securities, the group has set up 10 companies in industrial zones nationwide.
After establishing three new businesses in finance, services and property, its core businesses now accounts for only 60 per cent of the group’s total turnover, Vinatex Chairman Le Quoc An said.
An official from the Saigon Garment Trading and Production Joint Stock Company, who requested anonymity, said his company has forecast earnings of VND30 billion this year, half of which comes from property.
According to statistics from the Vietnam Textile and Apparel Association, property is the most promising source of revenue as many clothing companies own prime real-estate that’s worth plenty.
Many firms admitted that the textile and garment industry is no longer as attractive owing to increasing production costs and the shortage of a qualified workforce.
The industry has never faced a labor crisis so far, seeing many workers switching to other industries where the salaries are higher.
Statistics from the Vietnam Textile and Apparel Association indicated that the shortage of qualified labor has resulted in the industry’s overall productivity being 30 per cent-50 per cent lower than in other South-east Asian countries.
For some companies, the fall in productivity has been driven by a failure to adapt after privatization, forcing many textile and garment joint stock companies to seek out other ways to make a buck. (VNA)
Vietnamese
