SMALL APPAREL FIRMS SEE ORDERS FALLING

According to Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), Vietnam exported US$27.4 billion worth of apparel last year and over US$8 billion in this year’s first four months, up 6% against the same period a year earlier.

Despite rising shipments, the industry is coping with a slew of challenges. Many small and medium enterprises have been mired in difficulties as they have found it hard to compete, Giang told the conference.

Giang explained that apparel products of Myanmar and Laos enjoy special tariffs for exports to Europe and the U.S. while Vietnamese firms will have to wait until 2018 to make use of preferential tariffs to export products to these two major markets when the new free trade agreements with them take effect.

In addition, apparel enterprises have become exhausted by so many inspections by customs, taxation, labor, environment and food safety authorities, with up to three or four inspection teams a quarter.

Giang requested the Government and the Ministry of Industry and Trade to revise the master development plan for the textile-garment industry towards 2020 as it is now outdated. For instance, while apparel exports exceeded US$27 billion last year, the target in the plan is US$20 billion for 2020.

In addition, the plan must be revised to match the development of industrial parks to facilitate management and wastewater treatment.

Giang also proposed relaxing the rule on formaldehyde content in imported fabric as it cost enterprises time and money to observe it. “Without the revision of the rule, Vietnam’s textile and garment industry would be in greater distresss.”

Minister of Industry and Trade Tran Tuan Anh said the development plan would be revised next year to make it compatible to the country’s international integration moves.

Anh said the ministry issued Circular 37 preventing fabric and fiber of low quality and containing harmful substances from entering the local market as they badly affect consumer health and threaten the development of the industry.

Though Circular 37 was better than Circular 32, according to the minister, the ministry will take into account opinions of the association to make adjustments to support enterprises.

Vietnam targets apparel exports of US$30 billion this year. An expert told the Daily that the target is achievable but called for enterprises to change their business methods to make the most of opportunities from the country’s international integration.

Source: The Saigon Times