Vietnamâ€™s local media has reported that textile and garment industries in the country likely to miss their export target for 2016, due to reduced competitive ability and lack of export orders.
Vietnamâ€™s local media has reported that textile and garment industries in the country likely to miss their export target for 2016, due to reduced competitive ability and lack of export orders. The issue was raised at a Vietnam Textile and Apparel Association (VITAS) conference last week in Hanoi. According to Truong Van Cam, deputy chairman of VITAS, Vietnamâ€™s currency has remained stable in relation to the US dollar, however competitor countries in textile and garment production, including India and Bangladesh, have devalued their currencies to increase their export competitiveness.
Another factor claiming to impact the reduced competitive ability is the minimum wage, which has risen an average 26.4 per cent per year for local enterprises and 18.1 per cent each year for enterprises with foreign investment over the period 2008-16. The increases in minimum wage also entail increased payments of insurance and union dues, further burdening enterprises, the VITAS conference noted.
Despite the discouraging assessment of Vietnamâ€™s labour cost rises, local media also reported VITAS stats that said the countryâ€™s garment and textile export value in the first half of 2016 reached US$12.6 billion, an increase of 4.72 per cent over the same period last year. The growth in the industryâ€™s export value was largely attributed to foreign direct investment (FDI) firms, while local firms had difficulties getting new export contracts, especially in the apparel sector.