The COVID-19 epidemic has spread across the world, causing economic impact and also having a great impact on Vietnam’s textile industry. Vietnam Textile Group (Vinatex) held an online meeting with 22 of its units on March 25, 2020 to discuss countermeasures.
It is reported that orders from the Vietnamese textile industry have been canceled one after another since mid-March 2020, causing most production lines to be shut down in April and May. In particular, well-known brand OEMs have been hit even harder. Full production has not yet resumed, and domestic sales are expected to be affected as well. On the other hand, China has begun to resume work. Due to the current low market demand, it is estimated that there will be room for significant price reductions, by at least 20%.
The above-mentioned market changes will put pressure on the finance and operations of Vietnam’s textile industry. Therefore, the Vietnam Textile Industry Group believes that if the government fails to come up with good countermeasures, there will be losses by the end of April. Many companies have gone bankrupt due to lack of funds and reduced market liquidity. The unemployment rate may be as high as 30%. By May, the unemployment rate may further worsen and approach 50%. It is estimated that Vietnam’s textile industry will lose a total of VND5 trillion, of which Vietnam Textile The group estimates that it will lose 403 billion VND. If the situation continues to worsen, Vietnam’s textile industry is estimated to lose VND 3 trillion per month.
Vietnam Textile Group estimates that if the epidemic can end in late May, the global economy will begin to recover from June, and the Vietnamese textile industry will lose a total of 11 trillion VND. , of which the group will lose approximately VND1 trillion.
Vietnamese textile industry has independently proposed a number of relief plans, such as strengthening the search for business opportunities for exporting anti-epidemic supplies, including disposable non-woven protective clothing, antibacterial cloth masks, medical clothing, etc. , and coordinate with labor to implement flexible working mechanisms, reduce working hours and shift systems, etc.
In addition, the textile industry has also proposed to the government that it hopes to export masks and clothing for epidemic prevention in March 2020; exempt, reduce and extend the payment of social security fees, taxes, land rent, etc.; or use unemployment insurance funds to support unemployed workers to tide over difficulties; and provide grace periods for long-term loans due in 2020, extend short-term debts for 11 months, and not reduce loan limits, etc.
