Labor intensive industries leave cities for countryside

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VietStock FI English - 34 month(s) ago 3 readings

Textile, garment and dyeing enterprises, which cannot see any opportunities in big cities, have been heading for the countryside, where they can cut down expenses.

Hanoi and HCM City have applied the policy on tightening the licensing projects in industrial zones, export processing zones, while the localities only grant the projects which use fewer laborers. Therefore, setting up production workshops in the countryside proves to be a good choice for labor intensive enterprises.

The big difficulties that garment and footwear enterprises are facing, including the lack of workers and orders, have forced them to cut down expenses by relocate the headquarters or set up branches in the countryside.

Nguyen Hong Nhung, Deputy Director of a private garment company in Hanoi, said that the business performance was very bad in 2011, while she still had to pay higher for the labor force and production premises. On average, the pay to workers just amounted to 50 percent of the total expenses, while the figure has increased by 30-40 percent.

A representative of Manh Tin Garment Company in HCM City said that if the company tries to keep wages unchanged, it would be very difficult to find the workers in cities.

Nguyen Tan Dinh, Deputy Head of the HCM City Industrial Zone and Export Processing Zone Management Board, also said that with the monthly income of 3 million dong a month, an immigrant worker would not be able to live in big cities. Therefore, young people nowadays do not seek jobs in big cities any more.

Low income is also the main reason which has prompted workers in factories and industrial zones to move to other business fields or choose to become freelancers.

Dinh said that a person that undertakes simple jobs, such as cleaning houses, or works as porter, can earn 100,000-200,000 dong per day, a much higher level if compared with the wages the workers in factories can get.

A lot of garment workshops have arisen along the Highway No 10, in the districts of Dong Hung, Quynh Phu in Thai BInh province.

Director of a garment company said that this is the ideal place to set up factories, because it is not too far from Hanoi, while the transport conditions are favorable which will not cause difficulties to the transactions. Meanwhile, the business premises rent here is just equal to 1/3 of that in Hanoi.

More importantly, the director said, with the workshop located here, he can recruit a lot of local workers.

Ly Thi Thoa, a local resident in Quynh Phu district, said that most of the laborers here are doing the field work. However, they sometimes have free time when the two main crops finish. During that time, they can go working at the garment workshops. Though the workshops do not pay high, just 2 million dong a month, local farmers still like working there, because they do not have to go far to the big cities.

A manager of the Tien Thoi Garment Cooperative, which specializes in making products for export, said that his cooperative has joined forces with the Bac Giang Garment Company to set up a production base in the locality. It is clear that the production costs here are lower than in Hanoi. As local workers do not have to pay for accommodations, they would accept lower pay than in Hanoi. Meanwhile, the labor source in localities is really stable, which allows enterprises to draw their business plans.

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