Exports of textile and garment industry to reach US$42 billion

16:56 | 02/02/2020 Import-Export Follow english.haiquanonline.com.vn on

VCN- SSI Securities Cooperation estimates that the export turnover of the Textile and Garment industry will reach US$41.5 billion to US$42 billion in 2020, increasing from 6.4 to 7.7 percent compared to 2019.

	Textile industry urged to create highly added value products
	Garment export target of 40 billion USD may be reached
	Textile and apparel sector encounters difficulties during remainder of the year

exports of textile and garment industry to reach us 42 billion

Textiles and garments produced for export at Sai Gon 3 Garment Company Joint Stock Company. Photo: N.H

According to SSI, the Vietnam National Textile and Garment Group and its branches set a revenue target of reaching VND50.9 trillion, up VND1.55 trillion of profit before tax, up 11 percent compared to 2019. According to the Vietnam Textile and Garment Association, most companies are still negotiating orders until the second quarter of 2020.

Regarding impacts on export activities of the textile and garment industry in 2020, SSI said that export growth could be accelerated when orders are shifted from China to Vietnam, especially new markets enjoying benefits from the CPTPP, such as Canada and Australia.

However, exports of the Textile and Garment Industry will face risks. The minimum wage level will be raised from 5.1 to 5.7 percent in 2020 with the same level in 2019.

According to VITAS, Vietnam has raised the minimum wage 12 times since 2008. When many FDI factories have shifted and established themselves in Vietnam, the wage competitiveness will be fiercer between domestic companies and FDI companies, wage inflation will be higher, affecting the companies’ gross profit margin. In addition, electricity and transportation costs will also affect competitiveness.

In addition, the Textile and Garment Industry is dependent on imports of machinery, raw materials and accessories. With strict regulations on origin in CPTPP and EVFTA, textile and garment companies that do not have fully integrated value chains in Vietnam will be not affected immediately, because they depend heavily on importing materials from China.

In 2019, Vietnam's textile and garment export turnover reached US$39 billion, up 7.3% compared to 2018, lower than the national plan of US$40 billion.

By Nguyen Hue/Ngoc Loan

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