VIỆT NAM GARMENT FIRMS SECURE ORDERS THROUGH Q1

Market analysts said that although global demand remains relatively stable, the sector continues to struggle with higher input costs, including wages and logistics, while selling prices remain under pressure due to weak bargaining power.

Vietnamese textile and garment firms optimise production and management to enhance product competitiveness. — VNA/VNS Photo

HÀ NỘI — Many textile and garment firms in Việt Nam have secured production orders through the end of the first quarter of this year, but face mounting pressure from shrinking margins, rising costs and increasingly short-term contracts, industry insiders said.

Market analysts said that although global demand remains relatively stable, the sector continues to struggle with higher input costs, including wages and logistics, while selling prices remain under pressure due to weak bargaining power. International brands are also shifting away from long-term contracts toward smaller, more flexible orders that can be adjusted quickly in response to market volatility.

According to the Vietnam Textile and Apparel Association (VITAS), many manufacturers are coping with tighter delivery schedules and smaller order volumes. While most first-quarter orders have been finalised, negotiations for the second quarter of this year are still ongoing.

Thân Đức Việt, general director of the Garment 10 Corporation, said his company’s order book is full through March this year, covering both the pre- and post-Lunar New Year period. However, orders for the second quarter remain uncertain and are still under negotiation, reflecting a broader trend across the industry.

He noted that unlike previous years, when contracts were often signed three to six months or even a year in advance, many orders are now confirmed only weeks – or even days – before production, making planning and capacity management far more challenging.

Cao Hữu Hiếu, general director of the Vietnam National Textile and Garment Group (Vinatex), said this year will not be a year of sharp contraction, but pricing pressure remains severe.

He said that depending on the market and customer, prices for current and new orders are down by at least 5 per cent, squeezing already thin margins.

To cope with this environment, Vinatex is prioritising corporate governance and digital transformation. The group plans to establish a central data hub in 2026, moving toward a fully integrated management platform in 2027–28 to enable real-time decision-making across production, costs and market trends.

Product upgrading is another strategic focus. Demand is shifting away from standard cotton and polyester-cotton yarns toward multi-component, functional fibres with higher added value. At the same time, companies are accelerating the use of AI, automation and robotics to boost productivity and reduce labour costs.

Việt Nam’s textile industry is also transitioning from mass outsourcing to smaller, technically complex, high-value orders for markets such as the US and Japan. At the Garment 10 Corporation, for example, bespoke suits are now produced for overseas customers, with manual craftsmanship accounting for up to 60 per cent of the production process.

Vietnamese garments are exported to 138 markets, with the US alone accounting for more than US$18 billion. Việt Nam remains one of the world’s three largest apparel exporters, alongside China and Bangladesh, and the industry continues to employ about three million workers, or over 10 per cent of the country’s industrial workforce. — VNA/VNS

Source: VNS