Vietnam's textile and garment industry - An overview

Vietnam's textile and garment industry

Vietnam's textile and garment industry is developing strongly and playing an increasingly important role in the country's economic growth. The industry also has a great influence on the socioeconomic development of Vietnam. At the same time, the textile and garment industry employs more than 1.6 million people, which is more than 12% of the industrial workforce and about 5% of the country's total labor force. This article aims to provide an overview of the textile and garment industry in Vietnam and the vision of the textile and garment industry in Vietnam to 2030. However, Vietnam's textile and garment industry still has some limitations. First, the mode of production is mainly based on CMT. Second, the income and ability of workers did not match the development of the industry. Third, the size of enterprises is small, so the competitiveness of Vietnam's textile and garment industry in the international arena is limited. Vietnam's textile and garment products mainly consist of jackets, T-shirts, pants and shirts, skirts, children's clothing, and other products such as vest fabrics, sweaters, and swimwear towels.

Vietnam textile industry statistics

In particular, in 2013, the export value of jackets reached 3.88 billion US dollars; grew by 19.6% during the same period, and accounted for 21.6% of the total apparel export value. T-shirts and trousers witnessed an impressive growth rate of 23.7% and 25.8% during the same period with export values ​​of US$3.76 billion and US$3.01 billion, accounting for about 20.9% and 16.8% of the total apparel export value. The export value of shirts is about USD 1 billion, increasing by 14.6% and 5.7% of total textile and apparel export value. 5.5% for other products such as skirts, 5.0% for children's wear, and 24.6% for remaining products (in 2014). Vietnam's textile and garment industry is expected to export $45 billion in 2022, after earning about $40.4 billion in 2021. The country's global market share of textile and garment products is 5.2 percent, making Vietnam the third largest exporter of textiles in the world; its biggest importers are the USA, South Korea, Japan, and Europe.

List of the textile industry in Vietnam

1. Hualon Corporation

2. Nam Giao Co. Ltd.

3. Ca Chemical Auxiliaries Company Limited

4. Saitex International Incorporate

5. HappytexVN

6. Vietnam Trade Infomation Center

7. QD&C Co. Ltd.

8. Ca Chemical Auxiliaries Company Limited

9. NTC

10. Lam Nguyen Textile Yarn Company Limited

11. Thanh Hoang Trading Co.

12. Hong Ky International Trading Co.,ltd

13. THIEN NAM INVESTMENT AND DEVELOPMENT JSC

14. SELLBIZ (Vietnam Ltd.,)

15. Nghiahung Textile and Garment Co., Ltd

16. DERHAO TEXTILE (VIETNAM) COMPANY LIMITED

17. VISON YARN SPINNING CO., LTD

18. Favina Joint Stock Company

19. Ngan Ha Weave

20. Long An Joint Stock Textile

21. Hoang Dung Textile Limited Company

22. TNTEX CO., LTD.

23. VIETNAM HANDICRAFTS IMPORT EXPORT CO LTD

24. Damsan yarntex join stock company

25. Dong Nguyen Trading co., ltd

26. SAN HOANG PRODUCTION -TRADING JSC

27. ANN Handicraft JSC

28. Primatex International

29. Tam Long Investment and Trading Joint Stock Company

30. Phong Phu Company

31. Khoi Nguyen Co., Ltd.

32. Viet's Soul Co.,Ltd

33. BITEXCO NAM LONG JOINT STOCK COMPANY

34. Kim Tue Co. Ltd.

35. Sky Scorpion Company Limited

36. Asiatex Co., Ltd

37. PHONG PHU TRADING & INVESTMENT PROMOTION CORPORATION

38. RELIANCE CO. LTD

39. Nam Khang Textile Co., Ltd

40. Thanh Tan Tien Joint Stock Company

41. LorenzVietnam GmbH

42. LONGCRAFT COMPANY LIMITED

43. Hualon Coporation Vietnam

44. LAC VIET HANDICRAFT EXPORT COMPANY LIMITED

45. CONG TY TNHH TM RUICAI

46. Cong ty theu thu cong

47. Vinatex Import Export Company

48. Cmc Textile and Garment Company

49. IMK Vietnam Co., Ltd

50. THANH CONG TEXTILE GARMENT INVESTMENT TRADING JSC

Growth of the textile industry in Vietnam

Increased market access through free trade agreements (FTAs) and technology are key growth drivers for the garment and textile industry. Vietnam's bilateral and multilateral FTAs ​​continue to provide Vietnamese manufacturers access to new markets while mitigating the effects of growing trade protectionism. With new FTAs ​​in effect, such as the Trans-Pacific Partnership (CPTPP) and comprehensive and progressive agreements like the Vietnam-EU FTA (EVFTA), new markets will lead to higher exports and push manufacturers to develop industrial supply chains so they can adopt. By taking full advantage of preferential tariffs and increasing the competitiveness of their products.

Moreover, shifting production from China to Vietnam will help expand the textile and garment industry due to their labor cost advantages and skilled workers. The minimum wage in Vietnam is $US 170/month while China’s minimum wage is $US 325 / month. That means the Vietnam price is 1.5x greater than China's price.

Going forward, market access alone will not be enough for growth and Vietnamese manufacturers will also need to invest in technology, especially Industry 4.0 technology to increase productivity and increase quality to remain competitive.

Perspectives on the Development of the Vietnam Textile and Garment Industry

i. To evolve the textile and garment industry towards modernity, efficiency, and sustainability, shifting production from mere processing to active procurement of raw materials and semi-finished products, ensuring quality enhancement and diversification of exports.

ii. Taking export as the basis for the development of the sector and at the same time meeting the needs of the domestic market. Strongly supporting industries focusing on product development, production of raw materials and auxiliary materials, and enhanced the adding value of products in the industry.

iii. Development of the textile and apparel industry in line with environmental protection and agricultural and rural labor movements. Developing concentrated textile-fiber clusters to facilitate environmental treatment. Relocation of labor-intensive textile and garment enterprises to rural areas, while developing textile and garment markets in large cities and towns.

iv. Human resource development both in quantity and quality for sustainable development of the textile and garment industry, giving special attention to the training of management officers, technicians, and skilled workers with a view to creating good entrepreneurs and skilled manpower.

v. Mobilize resources to invest in textile and garment development, and encourage foreign investors to invest in areas where domestic firms are weak and inexperienced.

Limitations

The textile and garment industry is one of Vietnam's major industries, contributing significantly to Vietnam's exports and GDP as well as employment solutions. However, Vietnam's textile and garment industry still have some limitations. First, the mode of production is mainly based on CMT. Secondly, the income of workers did not keep pace with the development of the industry. Third, the size of enterprises is small, so the competitiveness of Vietnam's textile and garment industry in the international arena is limited.