In the current circumstances, this ambitious target requires the garment and textile sector to devise a specific strategy for marketing, materials production and product designing.

The global and domestic markets are facing many difficulties such as a sharp increase in fuel prices, a lack of highly skilled workers, the application of monitoring mechanisms for Vietnamese garments and textiles and tough competition against large garment and textile exporters.

In 2007, the garment and textile sector earned US$7.78 billion, accounting for 16 percent of the country’s total export turnover of US$48 billion.

With this performance, garment and textile products topped the list of Vietnam’s key export items, making the country become one of the top 10 garment and textile exporters in the world.

General Director of the Viet Tien Garment Company Nguyen Dinh Truong said that to reach the target, apart from boosting exports, more attention should be paid to exploring the domestic market. The garment and textile sector needs to renew its production activities, sharpen its competitive edge, expand its distribution network and increase investment in the domestic market, thus enabling their trademarks to compete with foreign rivals, Mr Truong said.

However, according to economic experts, the biggest challenge businesses will continue to face in 2008 is fierce competition from its three major importers - the US, the EU and Japan. In addition, the EU’s removal of garment and textile quotas for China in 2008 will force Vietnamese businesses into fiercer competition. While the import tax rates imposed by Japan on six Southeast Asian nations including Singapore, Malaysia, the Philippines, Indonesia, Brunei and Thailand has been reduced to 0 percent, Vietnam is still taxed at 10 percent.

The US market currently makes up around 55 percent of Vietnam’s export turnover but it is still considered a risky business to do with the continued application of monitoring mechanisms for Vietnamese garments and textiles.

Therefore, garment and textile enterprises need to cooperate more closely with the big US importers and should not take simple and low-value orders that could have an impact on the average price of Vietnamese exports.

Tran Van Pho, general director of the Hoa Tho textile joint stock company, which exports more than 30 percent of its products to the US market, said that his company will continue to maintain its export growth rate at 30 percent. At present, the US is the company’s major export market, accounting for 60 percent of its total export turnover. Hence, apart from boosting export activities to the US, the company will also increase the added value and the amount of products, he said.

In addition, the garment and textile sector should diversify designs and sharpen their competitive edge. To fulfill these requirements, the sector will have to continue with comprehensive measures to develop human resources.

The sector should also pay due attention to taking an active role in seeking out material sources in order to achieve sustainable development. Currently, the sector has to import 70 percent of its total materials input for production. Many economists said that it is essential to establish a materials and subsidiary centre for exporters as 6-7 percent of Vietnamese garment exports are produced for foreign businesses. This centre will meet the requirements of businesses and gradually develop the domestic materials market and subsidiary industries.

Le Quoc An, president of the board of the Vietnam Garment and Textile Group, said: “We are boosting material production and developing subsidiary industry by promoting cooperation between domestic and foreign businesses. We are also building new plants to produce fabrics and subsidiary products. At present, we are working with a group from the Republic of Korea to build two dyeing plants in northern Hung Yen and Nam Dinh provinces. We are also negotiating with the Ramatex group from Malaysia to develop two new plants in Ho Chi Minh City and the northern region to supply fabrics for the local garment sector.”

The Vietnam Garment and Textile Group has asked the Government, agencies and all localities to intensify efforts to remove trade barriers and effectively deal with monitoring mechanisms and anti-dumping lawsuits, boost administrative reforms, invest more in developing human resources and promote advertising in the global market.

Source: VOV