After assessing that the COVID-19 epidemic is severe and will continue for a period of time, many Vietnamese textile and garment companies have implemented a number of response measures, including focusing on domestic suppliers and products for domestic sales. Feasible measures.
(1) Looking for domestic suppliers
Vietnam General Bureau of Statistics Vietnam in the first two months of 2020 The export of textile and garment products showed a declining trend, with the export value only US$4.5 billion, a decrease of 1.7% compared with the same period in 2019.
Vietnamese textile and garment manufacturers have long been aware of the declining trend in exports. The COVID-19 epidemic has stalled production activities in China, seriously affecting the supply of raw and auxiliary materials for the Vietnamese textile and garment industry. According to statistics, Vietnam’s fabric imports decreased by 10.5% in the first two months of 2020, and Vietnam’s textile and garment industry index increased by only 0.2%.
Pham Xuan Hong, chairman of the Ho Chi Minh City Textile and Garment Embroidery and Weaving Association, said that raw materials are the key to the textile and garment industry, and currently 50% of the industry’s raw and auxiliary materials rely on China. At present, many small enterprises can only provide raw materials for production until the end of February 2020, some until March, and few can last until early May.
Chairman Fan also analyzed that it is not easy to find suitable raw materials because most textile and garment products are exported to markets such as Europe and the United States, so they must meet the origin standards of the fabrics. . Among Vietnam’s sources of raw materials, only South Korea has signed an FTA with the EU, but South Korea’s raw materials are not enough to supply Vietnam.
Therefore, it is a very effective measure to find raw materials in Vietnam. For example, SaiGon3 Garment Company has used domestic raw and auxiliary materials before, so this epidemic will not be affected.
(2) Reorganize the production organization and shift to the domestic market
Although the sources of raw and auxiliary materials have been diversified , but many Vietnamese textile and garment companies still have to reduce production by 15% in March and accept other domestic orders or reduce production hours to maintain production.
Vietnam has a population of about 100 million. Textile and clothing product consumption accounts for 5-6% of Vietnamese people’s total consumption, equivalent to US$3.5-4 billion per year. Therefore, The current situation is turning to domestic as the better practice for Vietnamese manufacturers.
