Garment Textile Industry: Goods Results from a Survey

 

Mr. Le Quoc An, Chairman of the Vietnam Garment and Apparel Association, said the general evaluation of a company is based on 10 criteria groups. The association has conducted practical and close studies during the investigation. The collected results are correct, meticulous and updated about the Vietnamese garment and textile industry.

 

The garment and textile industry grows some 10 per cent year on year annually. Above half of enterprises attained an annual growth of 12 per cent. Especially, several companies made super-profits like Saigon Garment Joint Stock Co. 115 per cent, Song Hong Garment Joint Stock Co, Phu Tho, Phan Thiet Import-export Co. and Saigon Wool, all above 50 per cent. Many companies had absolute profits of over US$1 million. Most equitised State-owned companies are working at a profit and give dividend rates higher than bank interest rates.

 

In the first nine months of 2006, above half of companies had higher on-year growth rates than the same period of 2005. Six companies recorded revenues of more than VND1,000 billion (US$62.5 million) each with an on-year growth of over 20 per cent on year. The billionaire companies are Hansoll Vina, Phong Phu Garment, Viettien, Taiwan Spinning, Hanoi Garment and Textile and Nha Be Garment. Many others also posted sales turnover of above VND500 billion each with a year-on-year growth of over 20 per cent, such as Phong Phu Coats Joint Stock Co. Garment 10, Phuong Dong Garment and Hoa Tho Garment.

 

Almost all Vietnamese garment and textile companies regard export as a driving force for development. Above 60 per cent of companies had export increases in 2005 and continued enjoying higher growths in the first nine months of 2006. The top exporters are Viettien with US$152 million and Nha Be Garment US$130 million. Tainan Fibre, Garment 10, Saigon Garment 3, Thanh Cong Garment and Textile 10/10 are among companies with more than US$50 million export earnings.

 

Vietnamese companies have made due investment in expanding the domestic market. They surveyed consumer tastes, organised production, supplied products and expanded sales networks nationwide for many years. Phong Phu Textile, Hanoi Garment and Textile and Phong Phu Coats are among top home firms with nearly VND1,000 billion takings in 2005.

 

Many companies have specified the development of key products with high value contents and international standards. They have intensively developed their typical products and further exposed themselves to the public. The most successful firms are Viettien, Garment 10, Thai Tuan, Vera, WOW, An Phuoc and Thanh Cong.

 

The incomplete construction of waste treatment system and ISO 14000 environment management standard system has weakened the competitiveness of the Vietnamese garment and textile industry. Only very few companies like Phong Phu Textile, Garment 10 and Viet Thang Textile can meet these requirements

 

The emphasis in salary and social welfare increase, corporate culture building, and corporate social responsibility implementation under the international standards of SA8000, WRAP and OHSAS8000 are tops of concerns of garment and textile enterprises in many recent years.

Viet Tien Garment Co. (Vietten) is maintaining the average salary of VND2 million (US$125) a month of more than 21,000 employees. The Phong Phu Coats Joint Venture Co. pays average VND3.5 million (US$220) for more than 100 employees. However, the garment and textile industry has recently witness labour disputes, especially in foreign-invested companies.

 

In general, most of garment and textile companies have approached to this tool in different forms. Many companies have applied updated software programmes to management, design, production and advertisement activities. However, a few enterprises applied enterprise resource planning (ERP) to their business.

 

Unique products for special market segments and competitive products for popular markets are new business policies. Typically these are high-tech cloth from Hanoi Textile Industry Co., high-grade suits of Nha Be Garment Co., four-dimensioned elastic fabric of Lan Tran Co. and high-grade apparels of Phuong Dong Garment Co. and Vee Sendy Co.

 

However, the number of typical products is still too small. A majority is more highly competitive popular products, especially with those from China and India.

 

The increase of the localisation content in export products to boost up competitiveness is now a business strategy of the Vietnamese garment and textile industry. However, the import cloths now account for over 70 per cent.

 

Through this survey, Vitas has gained an overview of the Vietnamese garment and textile industry. Many companies have strongly grown in size, especially equitised State-owned enterprises.

 

Nonetheless, the achievements in the past two years are partly resulted from the special protection policy applied by large importers in Europe and the US on Chinese products, a key rival of Vietnam. In more than a year (2008), the removal of special the protection mechanism applied on Chinese products will raise more difficulties to the Vietnamese garment and textile industry. With the achievements in the past two years and the efforts, the Vietnamese garment and textile industry hope to grow on the right track and overcome all challenges when Vietnam joins the WTO.

 

In 2005, the Vietnamese garment and textile exports brought in US$4.8 billion. In 2006, Vietnam is estimated to earn US$5.8 billion from garment and textile exports, up 20 per cent on year.