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04/07/2017

VietNam Textile Spotlights

Vietnam International Fashion Week Spring 2017: From 25-28 April 2017 at the Gem Center HCMC took place Vietnam International Fashion Week Spring – Summer 2017 (VIFW SS 2017). With more than 20 well-made shows, VIFW SS 2017 has introduced impressive collections, promising to create a new trend for the Vietnamese fashion market in the spring of 2017. VIFW SS 2017 has hit A memorable landmark of the fashion village when it brings together well-known designers and brands inside and outside the country such as: Xuan Thu Nguyen, Betty Tran, Chung Thanh Phong, Le Thanh Hoa, Ha Linh Thu, Claret Giang Le , 21Six brand, Canifa brand by Le Ha; Shenkar Institute of Fashion and Design – Israel, designers from Portugal, South Korea, Thailand, Germany, Italy and France … More than 1,000 designs have been unveiled as a synthesis of multi-dimensional creative inspiration. Different designers from many parts of the world. The main features of the catwalk during the past few days are: Fringe / feather detail; Material fragile, soaring; Costume is highly application. These features are predicted to become the focal point of the spring-summer fashion season. VIFW SS 2017 is really a playground, providing opportunities for cultural exchanges, promoting the development and raising the position of the domestic fashion industry to a new height and contributing to the Vietnamese fashion. Reaching out to the world market.

 

Textile exports are still good: According to the Vietnam Import-Export Report released by the Ministry of Industry and Trade, textile and garment export turnover in 2016 is $ 28.1 billion, up 3.3% over 2015, take accounting of 16% exporting figure for country. In particular, garment exports reached $ 23.8 billion, up 4.6% from 2015. In particular, garment exports reached $ 23.8 billion, up 4.6% from 2015. Fiber exports grew by $ 2.9 billion, an increase of about 15.3% thanks to the breakthrough into the markets of Korea, China, Hong Kong, India, Thailand, Bangladesh. In 2016, textile and garment exports are still relying on five major markets: the United States, EU, Japan, Korea and China. Exports to all five markets recorded positive growth in 2016 with US $ 11.7 billion, an increase of 4.1% over 2015 accounted for 41% of Vietnam’s textile and garment export turnover. Nonetheless, the report also said that this is the most difficult year since 2008 upto date in the export of textile and garment sector because the key export markets are facing difficulties. Consumption demand decreased, customers order in small quantities, no reservation as the previous period. Asian markets remain more stable but orders are small. In addition, some countries increasingly use trade remedies with Vietnam also create certain pressure for businesses … Not to mention, fees and surcharges of foreign carriers apply increasingly With 15-20 different fees … However, experts said that the prospects of textile export in 2017 is still very positive. Mr Vu Duc Giang – Chairman of  VITAS said that after Trump’s presidency, many American businesses began to return to cooperate. Although the United States is the largest export market of Vietnam textile and garment but businesses must find ways to adapt and actively diversify other export markets. Up to now, many enterprises have orders from June to August. Some other markets such as the EU, Japan, Korea also started to come back and actively approach enterprises. To adapt in the context of increasingly fierce competition in 2017, Mr Giang said that enterprises need to improve their management role which ensuring three factors: First, the price is competitive with the power textile; Secondly, quality assurance is the number one by the partners who have affirmed: “For quality there is no negotiation”; Third, delivery time must not be delayed, more and more must be faster.

 

Blue Ocean Strategy Conference (BOS): 07 April 2017 at Saigon Exhibition & Convention Center (SECC), Textile Association Embroidery Knitting HCMC (AGTEK), Global Leadership Institute of Malaysia and Nguyen Tat Thanh University organized a workshop entitled “Green Ocean Strategy for Textile and Garment”. At the workshop, Prof. Pete Ooi – President of the Global Leadership Institute of Malaysia presented a summary of the Green Sustainable Development Strategy and the Green Ocean Strategy. Sustainable development strategy is the development of the era that has been supported by most of the nations and big enterprises in the world, against serious social and environmental damage in the process of industrial development and urban today. Blue Ocean Strategy is a strategy for creating new markets without competition. This strategy was developed by Prof. Chan Kim and Prof. Renee Mauborgnem from the practice of 150 companies from 30 different industries. These companies have flourished thanks to the success for new investment in non-competitive markets. In 2011, BOS was voted in the “Top 50 Great Global Ideas”. At the workshop, delegates and experts shared practical experiences as well as discussed about difficulties, advantages and solutions for enterprises to develop and implement Green Ocean Strategy to adapt with the changes in the global market as well as the industrial revolution 4.0 and at the same time, exploiting the advantages and opportunities to overcome difficulties and obstacles in the current period to contribute to the sustainable development of each enterprise as well as Vietnam’s textile and garment industry.

 

The industrial revolution 4.0 (IR 4.0) will create a new look for Vietnamese textile and garment industry (VT&GI). Mr Le Tien Truong – VITAS CEO / VINATEX CEO  said IR 4.0 is a new trend that emerging in the world, especially IR 4.0 applications of automation and information technology with 3 pillars: internet for all things (IoT), big data and artificial intelligence. For Vietnam, the VT&GI sector employs a lot of labor at the level of simple training so the pressure of adopting IR 4.0 technology will become a big challenge. Textile and Garment (T&G)  sector is paying close attention, monitoring and research to gradually apply the technology of automation so as not to obsolete compared with the new technology trend as well as lose its competitiveness.. However, IR 4.0 also creates new opportunities for the industry. If so far, developing countries, labor-intensive countries have seen labor-intensive sectors such as textiles, leather and footwear, fisheries, etc. as sectors that create jobs but it is always said that these are low value, low-income industries. But with IR 4.0 applied extensively and rapidly, labor productivity per capita will improve dramatically. This time with the application of automation, robots, and the use of big data, the ability to increase productivity will be multiplier rather than additive. This is also a great opportunity for the industry to continue to attract labor, more sustainable development, avoid labor fluctuations. From a business perspective, Mr. Truong proposes that the government firstly needs to pay close attention to labor-intensive industries that are facing the challenges of IR 4.0 so that businesses can have incentives to invest in modern technology… and second point is to have policy to reduce taxes and fees for businesses using high technology, energy saving, green production, clean … The third point, that is the policy to support enterprises in training human resources in accordance with the trend of IR 4.0. This policy will help to create an increasingly qualified work force, better income and the ability to change lives and appearances in areas that were previously considered low.

 

Facilitate textile and garment export promotion: This year, Vietnam’s textile and garment industry (VT&GI) aims to achieve export turnover of over $ 30.5 billion. However, if there is no synchronous and long-term development policies and strategies along with active investment, technological innovation, management enhancement, active source of raw materials and auxiliary materials then VT&GI enterprises will be very difficult to compete with competitors in the market, especially in the context of international integration countries more and more powerful.

(1) High quality human resource training: At present, VT&GI employs about 3 million labors working in nearly 8,000 enterprises contributing positively to the shift of economic structure from agriculture to industry. However, many types of manpower that are very much needed for the garment sector do not yet have training facilities. For example, human resources for order management or areas that require large human resources such as yarns, textiles, dyes, and universities provide less than 10% of the demand for development. Process to improve the competitiveness of the T&G industry in the global supply chain will be easy to achieve in the near future. In the immediate future, schools in the industry will train engineers, senior management, middle and grassroots level in T&G field. This is a solution to help businesses in the industry maintain competitive advantage in the production of high quality products, good labor productivity and gradually improve the localization rate. In the long run, the schools will continue to train high-level human resources for the T&G industry, such as textile factory managers, order management, and so on. Increased value added methods such as ODM, OBM…

(2) Supporting industry development: T&G sector is one of the largest export markets in Vietnam but there was 80% to 85% from the export ratio of VT&GI has reached over 28 billion USD and we have spent nearly 15 billion USD to import material and sub-material for production. To survive and expand the industry, VT&GI must promote the supporting industries to develop. In particular, industrial clusters should be established to produce accessories to solve the main bottlenecks of wastewater treatment of dyestuffs or environmental-related materials. In addition, it is necessary to have preferential policies for enterprises investing in industrial clusters and sub-sectors …, capital support for capital construction and equipment. At the same time, it is necessary to establish support fund, preferential credit in the following cases: Enterprises implementing FOB method for orders with localization rate of 50% or more, enterprises producing spare parts testing replacement of imported or equipment in the production line of auxiliary products.

 

Vietnam Textile and Garment (VT&GI) faces challenges in joining the global supply chain:
The Vietnam-EU Free Trade Agreement (EVFTA) is expected to take effect from 2018 which is expected to boost growth. for Vietnam exports including T&G products. However, VT&GI will face many challenges to join the global supply chain. One of the most important aspects of the EVFTA is the reduction of tariffs on textiles and clothing between Vietnam and the EU from 8-12% currently to 0% within 7 years from the date of entry into force of the agreement. Mr Pham Xuan Hong – President of  Embroidered textile and apparel Association said: “This provision for not only facilitates of Vietnam’s textile and leather and footwear industry to increase its exports but also creates opportunities for internal development”. The new wave of investment in the textile and apparel industry is expected to focus on the production of raw materials and auxiliary materials to meet the principle of local proportions and the origin of goods when applied to tariff preferences. Technical barriers to trade are standards, technical regulations or procedures that a country applies to imported goods. These barriers may be one, some or all of the regulations and standards for product quality, user safety, environmental friendliness, corporate social responsibility, the labeling proceed, origin of goods … Meanwhile, the real sector of VT&GI still have many problems related to quality standards and production techniques. In particular, many national standards do not yet conform to international standards and regulations of importing countries, even no longer in accordance with the actual requirements and the rapid development of technology. Participating in the world market means that Vietnamese enterprises must find solutions to meet the increasing requirements of customers. In this regard, experts said that technical barriers are also a positive factor, motivating VT&GI enterprises to improve product quality. One of the first solutions is to accept facing its limitations and find ways to improve it. The Vietnamese regulators should quickly develop a set of quality standards for textiles in line with international standards and meet the requirements of key export markets. On the side of the company, the quality and technical requirements of the partner must be strictly adhered to improve the technology by cutting intermediary costs and improving labor productivity.

 

Foreign investors still choose Vietnam textile and garment enterprises: Although the United States decided to withdraw from the TPP agreement, the wave of textile enterprises in Taiwan, China continues to expand investment for manufacturing plants in Vietnam. This is no longer a welcome start to benefit from the TPP of foreign companies but choose “good soil” to develop production.

 

According to Binh Duong Department of Planning and Investment, in the first quarter of 2017, there are 18 countries and territories have registered new investment projects and increased capital in Binh Duong.
Of which, Taiwan led with total newly registered and added capital of $ 513.2 million, accounting for 38% of the total registered capital. Major capital raising projects are in the fields of supporting industries, textiles, and yarns such as the Polytex Far Eastern Co Ltd (Taiwan) plant with registered capital increased by $ 485.8 million and total investment capital after the increase is $ 760 million (at Bau Bang Industrial Park, Bau Bang district).

 

In Tay Ninh province which has been approved by the Ministry of Industry and Trade to be the textile and garment industry development area of VietNam. Therefore, the province has formed two textile sub-zones in Phuoc Dong Industrial Zone and Thanh Thanh Cong to attract FDI enterprises to invest in the field of textile and garment. Textile and garment sub-zones in these two industrial parks now have nearly 15 investment projects with over 80% of leasing area, mainly textile, leather and footwear enterprises of Taiwan, China and Korea.

 

Some other localities in the South such as HCMC, Dong Nai, Long An is also the investment destination of FDI textile and garment enterprises. Specifically, Pou Chen Group and Feng Tay of Taiwan invested to expand a series of factories in Dong Nai such as Yu Yuang Vietnam Hi-tech Textile Co Ltd with 100% the capital from Taiwan invested factory producing yarns, woven fabrics, knitted fabrics, nonwovens and finishing textile products while Huafa Hong Kong Company is producing yarn and dyed cotton for the textile industry in Long An province. And although the TPP fails to materialize, the VN-EU, VN-Korea, Asia – Europe … are also great opportunities for enterprises to produce and export their goods from Vietnam. According to the assessors, Vietnam’s market provides skilled labor which is cheaper than some other countries.

 

Textile and garment buyers are more demanding about the environment: Vietnam T&G is competing strongly with other countries’ products as customers not only demand for quality, price, delivery time but also require for environmental protection when signing export orders. Speaking at the SAIGONTEX 2017 International Exhibition, Mr. Le Tien Truong – CEO of VITAS / General Director of VINATEX said that in order to create a competitive advantage, Vietnam T&G enterprises are forced to stick to four core values for development investment which include: productivity – quality – energy saving – environmental protection. Many businesses are paying more attention to investment in production automation, some companies relocate their factories to competing areas so the labor force is less fierce. Recently, some T&G companies have focused on investing in energy saving, environmental factors, automation equipment and not spreading investment. Recently, many customers required for garment facilities and raw materials must also be produced to ensure the environmental conditions.

 

Streamline the flow for the domestic market: Linking together and collaborating to form a value chain is being considered by many enterprises to produce and distribute T&G as a viable solution to promote domestic consumption. In the past years, T&G companies have made great efforts to invest in production and expand their distribution channels in order to gain market share. As a result, the volume of textile and garments for domestic consumption is growing strongly. In order to meet the increasing demand of consumers, many domestic garment enterprises have paid more attention to fashion design. Major brands such as Viettien of Viet Tien Garment Corporation, Hanoximex of Hanoi Textile Garment Corporation, Merriman of Hoa Tho Corporation, Mattana of Nha Be Corporation. All the enterprises have constantly come up with new designs to catch up with world fashion trends which are favored by consumers. Mr Hoang Ve Dung – Deputy General Director of VINATEX said that in the context of difficulties in export orders of textile and garment industry which is expected to last until the third quarter of 2017, the choice to return to the domestic market is the solution to help businesses maintain production. More importantly, the return to the domestic market also helps businesses keep their home ground before occupying foreign goods. Minister of MOIT, Mr Tran Tuan Anh emphasized that the creation of a fair environment for investment, production and business for enterprises have equal opportunity to access the market, fully exploit the resources of the country is belong to the responsibility of state management agencies. If the competitiveness of the economy, the enterprises, the production goods are not guaranteed that will certainly lose in this integration. Along with that is strengthening trade promotion activities in the domestic market, mountainous markets, supporting enterprises to sell products, bring goods to rural, border and island.

 

Textile exports strive to increase by $ 3 billion. The export growth of Vietnam’s garment and textile industry is based entirely on the competitiveness and demand of the world market. Therefore, the withdrawal from the TPP of USA does not shrink businesses to strive for an additional $ 3 billion export turnover in 2017. That is confirmed by Mr. Le Tien Truong – Vice President of VITAS / VINATEX CEO. Mr. Truong said that 2016 was a very difficult year for the textile and garment industry when export growth was only 4% ($ 28.1 billion). Compared to the last 10 years, 2016 is the year with the lowest growth, except for 2008 there was no export growth due to the impact of the world crisis. However, from the beginning of 2017, the textile industry is receiving better signals, though not sustainable, with USD 6.75 billion export turnover in the first quarter of 2017, up 12.4% over the same period last year. The special feature of first quarter 2017 is that growth in traditional markets is not high such as the US and EU markets increased by only 6.3% – 6.4%. But many new markets have had good signals, the Eurasian Economic Coalition with growth in Russia increased by 115%. For the AEC market there has been growth in six markets, namely Thailand 17%, Indonesia 11%, Singapore 38%, Laos 24.5%, Cambodia 36% and Myanmar 5%. One of the traditional customers in Vietnam has maintained a high growth rate, which is Korea with a growth rate of 14%. In addition, two countries, Brazil and India, enjoyed very good growth, up to 34%. From this it can be seen that the efforts of proactively accessing, utilizing and exploiting new bilateral and multilateral trade agreements has resulted in much of this achievement coming from the Eurasian Economic Coalition and the ASEAN Economic Community. With satisfactory results in the first quarter, the textile and garment industry is striving in 2017 will grow over 10%, an additional about $ 3 billion export turnover for the industry. To achieve the goal of bringing in $ 3 billion in foreign currency from exports, enterprises should focus on exploiting the highest performance of fixed assets invested, focusing new investment to replace the old equipment, enhance competitiveness with a higher level of technology, especially in the context of the appearance of CN 4.0 in the textile system.

 

Proposed two sets of costumes for APEC leaders 2017: Painter Vi Kien Thanh, Director of Fine Arts, Photography and Exhibition (Ministry of Culture, Sports and Tourism) said that last week the agency submitted to the Committee National APEC 2017 two designs to choose the costume for the leaders of 21 economies during APEC 2017. The Department of Fine Arts, Photography and Exhibition has invited 5 people to design the costumes from the end of 2016, finally selected by designer Thu Ha and Thai Tuan Company. According to the council, these two attire ensure the luxury but still comfy and convey the message of traditional culture in Vietnam. Both sets of customs are decored with lotus flower as a highlight in shaping to convey the traditional message about the country and people of Vietnam. According to Vi Kien Thanh, after the APEC Chairman of the 2017 National Committee selects the final design, Vietnam will send documents to 21 APEC member economies to garner the measures. Vietnam will sew the costumes for leaders in the approved designs.

 

Businessman and garment enterprises are awarded the Vietnam Trade in Services Award 2016: On 22 April 2017, in Hanoi, the Ministry of Industry and Trade held a ceremony to honor the enterprises awarded the “Vietnam Top Trade Services Awards 2016 “for 10 Excellent Trade Services, 10 Excellent Business Service Providers and 82 Best Trade Service Enterprises in 2016.” Vietnam Trade in Services 2016 “is a prize for domestic enterprises and foreign invested enterprises operating in 11 categories of trade in services which Vietnam commits to open when joining the World Trade Organization (WTO). The award is aimed at discovering, honoring and promptly encouraging domestic and foreign invested enterprises and entrepreneurs to operate in the fields of service trade and quality industrial production of typical case.

 

The garment enterprises in the top “typical trade services enterprises” 2016 are included: Corporation 28,

Phong Phu Corporation and An Hung Joint Stock Company. One of big individual on the top 10 “Excellent Business Service Entrepreneurs” 2016 is Mr. Nguyen Van Hung – CEO 28.

 

Algeria wants to find a Vietnamese partner to invest in textile and garment business: Algeria has favorable conditions for co-investment in production and business.

(1) Policy: The Algerian government encourages foreign investment with many incentives such as free long-term land use, tax exemptions for enterprises in the first 12-15 years, exemption of taxes on technology, equipment and raw materials within the framework of the project, allowing the use of foreign experts and workers needed for the project.

(2) Market: Algeria has more than 40 million consumers. Their production in the country can not meet so they have to import a lot. The Algerian government has adopted an import substitution policy (restricting imports and encouraging domestic production). Algeria is very close to Europe and has an association agreement with EU which enjoys a lot of EU trade preferences, so investments in Algeria can take advantage of export incentives. To the EU as well as neighboring African countries … Many Algerian companies want to invite the VT&G enterprises to joint the venture, produce in Algeria. Algerian companies are willing to pay for the costs of living and traveling in Algeria for VT&G enterprises to meet and discuss the possibility of investment and cooperation with them. Interested companies can contact Mr Hoang Duc Nhuan – Commercial Counselor Vietnam Embassy in Algeria, Tel. 00213-23485193. Mobile: 00213-559502658, Fax: 00213-23485467, Email: nhuanhd @ moit.gov.vn

Selected by VITAS

Source: http://www.vietnamtextile.org.vn/vietnam-textile-spotlights_p1_1-1_2-1_3-597_4-2199.html

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