Orders are plentiful, but textile businesses are worried about not being able to produce because of the pandemic

illustration image. Photo: Nguyễn Thanh

Orders until the end of April 2021

In 2020, Vietnamese textile and garment enterprises experienced a year of decline for the first time in their 25-year history.

However, talking to the press, Mr. Le Tien Truong, Chairman of Vinatex's Board of Directors, said that by 2021, in the new normal, commercial transactions will return, however, the volume and price have not returned to the threshold of 2019.

Specifically, for textiles, to return to the consumption threshold of 2019, according to the brightest forecast, will be in the third quarter of 2022 or the end of 2023, according to the slow recovery scenario.

"Meanwhile, Vietnamese textile and garment enterprises set a target of 2021’s export turnover to return to the 2019 threshold. Thus, Vietnamese textile and garment enterprises strive to finish earlier than the market recovery from 3-6 quarters. This is a great challenge for Vietnamese textile and garment enterprises," Mr. Le Tien Truong said.

However, the Chairman of Vinatex also acknowledged that the signals from the market in the first quarter of 2021 showed that the forecasts and directions mentioned above of Vietnamese textile and garment enterprises have a basis for implementation. Currently, some Vietnamese textile and garment enterprises, including the Group's enterprises, have orders until the end of April 2021.

Notably, items such as knitwear and popular goods with large consumption have orders until July and August 2021. That is a good signal for the recovery of Vietnamese textile and garment enterprises, especially when Vietnamese textile and garment enterprises are in a good position in the redeployed global supply chain after the Covid-19 pandemic in 2020.

Great challenge and risk

The textile and garment export orders have been signed by the end of April 2021, some even signed by the end of August 2021. Meanwhile, Vietnam is currently facing the third outbreak of Covid-19.

Analyzing the challenges posed in this aspect, according to Mr. Le Tien Truong, in February 2021, when the Covid-19 pandemic hit the North, the outbreak in Hai Duong was of a large-scale so challenges and risks are also greater for Vietnamese textile and garment enterprises.

In 2020, when the pandemic spread around the world, causing the delay in supply chains, the Vietnamese textile and garment enterprises were in a supplier position, but if the disease occurs in their facilities, wages and benefits for employees will be lost.

Meanwhile, in 2021, the pandemic situation will be different, if the pandemic hits their facilities, they have to be isolated and will be unable to organize production, apart from the loss of wages and benefits for workers, enterprises cannot even complete contracts signed with customers.

This is a challenge and a very big risk for all textile enterprises. In addition to the loss of financial commitments to customers, in the long term, the position of Vietnamese textile and garment enterprises in the global supply chain is also unstable and may be replaced (especially in the current context, the supply chain realignment process has accelerated.)

"Therefore, we evaluate the disease control in Vietnamese garment and textile enterprises should be implemented at a higher level," Mr. Truong said.

Recommendations for business leaders in Vinatex to minimize risks are that the business and leaders need to raise disease prevention to the highest level, including strictly implementing the “5K” health campaign set by the Ministry of Health, keeping a safe distance, disinfection, and wearing masks during work and in the cafeteria.

In addition, for workers from Covid-19 affected areas, they have not come to the factory, ensure a full 21-day quarantine, then go to work again after negative results.

In addition, strictly focusing on production and business, ensuring productivity and quality, striving to reach the threshold of 2019 to recover in finance, orders and new position of Vietnamese garment and textile enterprises in the supply chain.