Literally losing the thread

Vietnamese textile-garment firms face risk of decline in orders

Source: Unsplash/Bozhin Karaivanov

Vietnamese textile-garment firms are staring at the risk of losing orders to competitors amid the COVID-19 situation in August with over four-fifths of such enterprises in the southern region having had to either lower productivity or suspend operations to combat the pandemic. Only 70-80 per cent of such companies in the northern region are operating.

Gia Dinh Group JSC in the southern province of Binh Duong has secured orders till December end, but face higher material prices plus late shipments along with higher logistics costs. The company’s management board said if the pandemic prolongs, it would fail to fulfill its orders, according to a report in a Vietnamese newspaper.

Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), said production in August is ‘extremely difficult’, especially for firms in southern localities imposing social distancing. Up to 90 per cent of production chains in the south have been broken.

Delivery pressure amid outbreaks is a big challenge for garment and textile enterprises now, he said, stating that if they fail to meet delivery deadlines, their customers would cancel orders, which will affect production both this year and the next.

"If the Vietnamese market is not stable, partners will shift orders (to other countries). Garments are seasonal. Nobody wants to buy outdated clothes though they are on sale," the VITAS chairman was quoted as saying.

The ministry of industry and trade also said garment and textile enterprises are facing the risk of international clients postponing or cancelling orders, and shifting their focus to other countries. "When the pandemic is controlled, it will be very difficult to resume business relations, and that will take time," the ministry said.

Many workers have left Ho Chi Mih City for their hometowns to avoid being infected with the novel coronavirus, and only 60-65 per cent may return to the city when the outbreak is pushed back, according to Giang.

Vietnam exported $18.6 billion worth of textitle and garment products in the first seven months of this year, a year-on-year increase of 14.1 per cent, according to the General Statistics Office.