According to data from the Vietnam Textile Association (Vitas), Vietnam’s textile exports reached nearly 23 billion US dollars in the first seven months of this year, a year-on-year increase of more than 50%, surpassing Bangladesh and ranking second only to China ranks second in the world.
However, since July, the complex epidemic has begun to spread in southern provinces and cities, affecting the production and operations of enterprises.
In addition to concerns about the impact of the epidemic on the supply chain, rising logistics costs, serious shortages of containers, and congestion of export goods at many seaports have directly affected the production of textile companies. obstacle.
Logistics costs, which currently account for about 9% of the cost of textile products in Vietnam, are rising sharply. According to VnDirect, container rental prices tripled in the first six months of this year. At the same time, the shortage of containers affects the business of ODM and OBM orders, slowing down the delivery progress of partners.
In addition, rising freight rates will also put downward pressure on purchase prices. Textile processing companies mostly use FOB exports, and the delivery of goods is only slightly indirectly affected. But if delivery times cannot be guaranteed, it will affect delivery commitments with partners and customers. In this case, there is no alternative but to renegotiate the delivery time with the partner.
Another difficulty in the textile industry in the second half of the year is the labor shortage. Vitas predicts that if the new crown epidemic is controlled by the end of August, the number of workers is expected to only reach 60-65%. Vitas Chairman Wu Dejiang said: In the coming period, the shortage of labor resources will be very serious.
Many textile and garment companies are currently considering the option of transferring raw and auxiliary materials from south to north to avoid production interruptions. But even in this case, Mr. Jiang said that when companies bear additional transportation costs, they are not optimistic, and the delivery time for various brand companies is difficult to guarantee.
Vitas Chairman said that under the current urgent situation, it is fundamental to speed up the vaccination of many workers, including in the production areas of textile enterprises in industrial zones and industrial parks. question.
Facing many challenges, opportunities still exist in the textile industry, which is to win the market from competitors. According to a VnDirect report, many countries such as India and Myanmar that are considered “direct competitors” to Vietnam’s textile and garment industry have also been affected by the COVID-19 epidemic, leaving garment factories with only 50% capacity.
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