Nearly 66.5% export turnover of textiles is spent on raw materials

Material and labor costs are occupying a very large proportion in the product cost of textile in Vietnam. Photo: T.Bình

It’s still not counting on outsourcing for international brands and has not built a brand name. Most of the revenue earned from the exports of this sector are being invested back into importing raw materials.

According to the latest statistics from the General Department of Vietnam Customs, as of 15/11, the total export value of textiles (textile products, fabrics, fibers, raw materials and accessories) reached $US 27.43 billion.

However, at the same time, the country spent $US 18.233 billion importing raw materials for this industry, the equivalent to nearly 66.5% of the total export turnover. In that fabric items accounted for $US 9.798 billion, raw materials was $US 4,777 billion, cotton was $US 2.103 billion, and fibre was $US 1.555 billion.

Thus, the value of an exported textile product accounts for nearly 70% of the cost associated with the materials. In addition, the labor cost in Vietnam is very large (with about 2 million workers and it is the most labor-intensive industry in the country), plus transportation and administration costs, so therefore, with these additional costs added into the export price the textile industry’s revenue is insignificant.

Not only accounting for major value of the product, the dependence on imported raw materials also makes domestic enterprises passive and under pressure from foreign partners in the operation. Currently, the supplying markets are mainly located in Asia such as China, Japan, Taiwan and Thailand.

Also, according to the General Department of Vietnam Customs (according to the market by the end of October), China provided nearly $US 5 billion worth of textiles, $US 1.704 billion worth of materials and fiber was nearly $US 700 million.

Meanwhile, the Taiwan market provided more than $US 1.31 billion worth of textiles; over $US 416 million of raw materials and $US 244.3 million of fibre. The Japanese market provides two main groups of fabric (nearly $US 525.5 million) and raw materials ($US 203.5 million). The Thailand market also offers two main categories of fabric ($US 198 million), and raw materials ($US 189.5 million).