Vietnam Textile Segment Set To Go Hi-Tech and Diversify Markets

Economy

Vietnam Textile Segment Set To Go Hi-Tech and Diversify Markets

The Vietnamese government in a bid to boost growth in the textile sector is pitching for companies that have set shop in Vietnam to be more technology intensive in order to reduce cost of production and continue to stay competitive in the international markets.

The government spokesperson observed that as global competition in textiles grows fiercer, it becomes imperative to increasingly target markets outside the Association of Southeast Asian Nations (ASEAN). Referring to the outside markets, he said these would include the US, the European Union and Japan. “If we want to maintain our growth in the long run, we have to be in good nick with these developed nations.”

Vietnam is also seeking potential markets in the region that falls under the aegis of the Eurasian Economic Union, and more so in Russia. At present, the impetus is coming from Republic of Korea, with numerous Korean enterprises being ready to invest in Vietnam. Besides, the free trade agreement signed between Republic of Korea and Vietnam is a boon for their textile trade.

The move to explore new markets and diversify their textile export portfolios is an urgent requirement for Vietnam as despite selling their products without any hike in prices, the Vietnamese exporters are finding their orders are on the decline.

The Vinatex Director General, Le Tien Truong endorsed the view that use of new technology will enhance productivity and reduce labor costs. “This need to shift strategy is also going to face challenges on the investment front besides the pains of restructuring and labor,” he added. “Under the circumstances, we need access to the right technology that will enhance the potential of the manufacturers and enable them to penetrate foreign markets very efficiently,” he concluded.

The country’s premier textile body, Vietnam Textile and Apparel Association (VITAS) provided encouraging statistics, which mentioned there was a 10 percent increase on garment-textile exports y-o-y and the total corpus has reached USD 19.8 billion in the first eight months of 2017. Of the total corpus of Vietnamese textile exports, the United States comprises the biggest basket amounting to 51 percent.