Vietnam Textile Orders Have Returned To China Under The Epidemic Situation? What Do Vietnamese Enterprises Say

The epidemic situation in Vietnam further broke out and spread, with nearly 10000 newly confirmed cases in a single day recently, and 19 cities continued to be blocked; Industrial production was blocked and a large number of factories were closed; The port congestion is serious, and the yard is nearly saturated. Cat Lai and tcit of Vietnam's new port of gaime international port have announced the suspension of receiving import and export containers.

Textile and clothing exports increased by 20% in the first half of the year+

Haiwai.com, August 6 (Xinhua) according to the information released by Vietnam's Ministry of health on the 5th, 7244 new confirmed cases of pneumonia were found in Vietnam, including 7239 cases of local cases and 5 cases of imported cases from abroad.

According to the Vietnam Youth Daily, 185057 new crown pneumonia cases and 2720 deaths have been confirmed in Vietnam. There were 3886 new confirmed cases in Ho Chi Minh City, the epicenter of the southern epidemic. The total number of confirmed cases was 109916. In addition, 882 cases were reported in Pingyang Province, 715 cases in Long'an Province, 358 cases in tongnai Province, 235 cases in Xining Province, 169 cases in Qianjiang Province, 114 cases in tongta province and 112 cases in baditoutong province.

In the first six months of 2021, Vietnam's total textile and garment exports reached nearly 19 billion US dollars, with a year-on-year increase of more than 20%, indicating the earlier recovery momentum of the industry, but there are still many problems to be solved in terms of sales and exports. In addition to the positive signals released by the market, the complex situation of the covid-19 epidemic situation requires enterprises to take matching anti epidemic measures and stabilize production, and increase export strength at any time in the future.

India, Bangladesh, Myanmar and Cambodia order transferred to Vietnam

Nearly a year after the covid-19 epidemic led to supply interruption, customer cancellation or extension of delivery time, Vietnam textile and garment enterprises have gradually overcome difficulties, with more and more orders, greatly improving the economic effect, and ensuring the income and employment opportunities of workers. When evaluating the operating performance of No.10 clothing corporation, Bai Shenglong, vice president of the company, said that in the first half of this year, the company's total revenue reached 1.433 trillion dong, a year-on-year increase of 20%, and the after tax profit was over 33.8 billion Dong, an increase of 2.8% year-on-year, depending on the company's cost reduction. Due to the deadlock of competitors such as Myanmar and Cambodia, Vietnam has received a lot of orders during this period, resulting in an increase in export volume, which is conducive to higher operating efficiency of the company.

Liu Jinzhong, President of Beijiang garment company, agreed. He said that the improvement of the market in the first half of this year and the rise in the number of orders will help enterprises to stabilize production and achieve the set targets. However, if the epidemic situation can not be controlled as soon as possible, the enterprise's revenue and production efficiency will be lost.

Enterprises that process textiles and clothing according to partner orders will be fined and lose processing fees. If the partner refuses to receive the goods due to slow delivery, the enterprises adopting FOB production mode (purchasing raw materials, producing and selling finished products) will suffer greater losses.

Vietnam's textile and clothing exports reached nearly $19 billion in the first half of this year, up 20% year-on-year, exceeding the level at which the epidemic has not yet occurred, said Li Jinchang, chairman of the Vietnam textile and clothing group. This shows the early recovery momentum of the market. It is not expected to return to the level of 2019 until the end of this year, or even the third quarter of 2022. This recovery comes not only from demand factors, but also from supply chain transfer.

Specifically, the new crown pneumonia epidemic is widely spread in India, Bangladesh, Cambodia and other textile and garment export countries, leading to the failure of enterprises to operate. As of April this year, Vietnam has done a good job in epidemic control, so enterprises can maximize the production speed. Although the price of clothing industry is low, the order quantity is still enough. In addition, the bright spot also comes from the yarn industry. After 24 consecutive months of difficulties, low demand, and sometimes the price is lower than the cost price, the industry will improve from October 2020, and the demand and price will soar. The results achieved in the first half of this year can make up for the losses suffered in 2019 and 2020, making the yarn and thread industry an industry contributing more than 60% to the group. As a result, the total revenue of the group is equivalent to the level of the same period, and the profit achieved more than 70% of the annual plan, with a year-on-year increase of 190% and 140% of that in 2019.

Vaccination in the second half of the year is the key

Li Jinchang, chairman of VINATEX, said that in addition to the results achieved, companies are now facing new risks brought about by the covid-19 epidemic, such as new cases of coronapneumonia in garment manufacturers. Many of the group's powerful enterprises located in the southern region are facing the risk of working in isolation mode. The labor force participation rate is low (as of July 10, a total of 10000 workers can not work in the factory), the dominant products have not yet recovered, and the textile and clothing industry is facing good market opportunities. However, if the progress cannot be guaranteed due to the epidemic situation, the economic benefits will be reduced. Therefore, in order to actively produce and strengthen exports, enterprises are required to strictly implement epidemic prevention measures, and at the same time, increase supply capacity when the market is improved due to the short-term transfer of investment to Vietnam. Make reasonable use of the production capacity of the product areas where the market has not yet recovered, maintain human resources and the lowest fixed cost, etc.

Mr. Wu Dejiang, chairman of Vitas, said that in addition to actively preparing domestic raw materials for production, aiming to explore the opportunities brought by the new generation of free trade agreements, enterprises should strengthen investment in developing production chains, research and develop markets, aiming to increase the export strength and strive to achieve the goal of export volume of 39 billion US dollars. In addition, it is hoped that the government will control the epidemic situation as soon as possible and vaccinate a wide range of workers in order to help enterprises stabilize production and export activities.

Ruan Chunyang, chairman of Xing'an Garment General Company, said that in the first few months of this year, the market was booming, and the company successively obtained orders from the United States and the European Union, but the production and operation effect still largely depended on the epidemic situation. If the epidemic situation is controlled as soon as possible and the order quantity is abundant, the original strength will become a good foundation for the company to strengthen production and expand the market.

In addition to the efforts of enterprises, Vietnam's textile and garment enterprises hope that the state can prepare enough new coronal vaccine in advance to vaccinate workers, so as to avoid the spread of the epidemic in the community. So as to provide convenient conditions for enterprises to invest and stabilize production. At the same time, specific supporting policies are introduced to boost the development of textile and garment industry, and to build a centralized textile and garment industrial park, aiming to lay a foundation for the development of enterprises.