With exports to their traditional markets tending to decline due to economic turbulence, the Vietnam’s textile and garment sector is eyeing other alternatives to maintain growth.
According to the General Statistics Office, the textile and garment’s export turnover in August reached a record high of US$1.4 billion, sending total exports in the first eight months of this year to $9 billion, which is a 29 percent increase year-on-year.
Japan, the EU and the US are still Vietnam’s most important markets, which account for 12 percent, 17 percent and 51 percent of the total exports respectively.
Although export turnover to these traditional markets is on the rise, domestic textile and garment businesses realize certain potential threats.
“Orders from the EU are on the decline, as are those from the US,” Pham Xuan Hong, deputy chairman of the Vietnam Textile and Apparel Association (Vitas), was quoted by Sai Gon Tiep Thi newspaper as saying.
Than Duc Viet, CEO of Garment Co 10, said the tightened spending policies in the US after the public debt ceiling removal in August was likely to affect exports to this market.
Although export turnover in the first eight months of this year rose by 30 percent, many businesses said the actual increase was only 10 percent in volume and 3 percent in value since input costs also soared.
Hong of Vitas said many businesses had thus sought for other markets to fill up the export gap created by the declining orders, and had managed to gain strong export increases from many non-traditional markets.
Exports to Cuba in the first seven months of this year rose by 470.8 percent, while the respective figures recorded for the Indian, Korean, Thai and Chinese markets are 156 percent, 144.2 percent, 131.1 percent and 127.6 percent.
The new markets account for 20 percent of the total export turnover of the textile and garment sector, doubling the figure recorded five years ago.
Phan Van Kiet, deputy CEO of Viet Tien Garment JSC, said the new markets accounted for 10 percent of the company’s exports, while the figure was only 2 percent in 2006.
“Since Vietnam’s textile and garment products can pass the strict technical standards to enter the EU and the US markets, it is not so difficult for them to enter the others,” he said.