Textile and footwear firms: Difficult to access support policies

	Obstacles could slow progress for textile sector in 2020
	Textile enterprises rely on exporting cloth masks
	Garment and textile firms ready to export face masks to US, Europe

Most leather and footwear enterprises will be closed if they cannot find the output. Photo: Nguyen Hue.

Business faced difficulties

According to the released information, textile and footwear enterprises in Ho Chi Minh City have faced difficulties. Output to major export markets such as the US and the EU have not been opened, many small businesses have been closed, and workers in some large enterprises have had to stop working alternately. Therefore, the stamina of businesses will not be able to last long.

Mr. Pham Van Viet, Vice Chairman of Ho Chi Minh City Textile and Embroidery Association, said although they have switched to antibacterial cloth masks, the output of these products has faced difficulties because the domestic market has been saturated while export markets required high standards that not all businesses can meet.

“Even if masks are exported, this is only a temporary solution because mask exports do not bring profits to businesses but only solve employment difficulties.Currently, workers in most textile and garment firmshave to stop working alternately. However, the stamina of businesses can lastup to May, even big enterprises cannot hold through September,”said Viet.

Similar to the textile industry, regarding the increasingly complicated developments in countries that are the major export markets of Vietnam's footwear industry, such as the US and EU, the total number of canceled orders of the whole industry in the markets was estimated to 70 percent.According to estimates of the Vietnam Leather, Footwear and Handbag Association, by the end of April, most businesses will stop operating, affecting about 1.2 million workers.

Difficulties accessing support policies

According to the information from Ho Chi Minh City Textile and Embroidery Association, Shoes and Leather Association, and enterprises, accessingsupport policies has been difficult.

Mr. Nguyen Van Khanh, General Secretary of Ho Chi Minh City Leather and Footwear Association said footwear firmswere very interested in supportpolicies but had not been able to access guiding documents as well as focal points for policy settlement. They expected relevant agencies to guide the procedures soon so that enterprises could register their support packages in a timely manner and had a clue to assist in solving difficulties.

Mr. Nguyen XuanTu, Director of PhuocThanh Manufacturing Trading Import and Export Co., Ltd., said his firm knew about the State's support policies, but only received a notice from a bank requesting the firm to submit documents related to its loans to invest in factories to consider.Mr. Tu worried, with more than 50 percent of the footwear export orders that had to be stored while every month it costs VND1.2 billion for operating expenses,if the export situation did not improve, his enterprise could survive for just one or two months.

On the side of textile enterprises, Mr. Pham Van Viet, Vice Chairman of Ho Chi Minh City Textile and Embroidery Association, also said enterprises were working with banks on the implementation of support measures on debt freezing, debt rescheduling and lowering lending rates.However, now banks are only reducing interest rates for businesses. The policy that businesses are most interested in is whether they can borrow money without interest to pay salaries to their workers in the difficult period, which banks have not implemented yet.

According to Mr. Viet, financial support policies for enterprises must be implemented quickly because businesses have been exhausted. Therefore, the financial support must be given to enterprises in May so that they havemoney to pay salary in April, if they get moneyinJune, it will no longer work because many enterprises cannot recover.

Regarding support policies for employees, according to a representative of Ho Chi Minh City Textile and Embroidery Association, enterprises are making declarations at the request of enforcement agencies, but they have only made general declarations because ofa lack ofguidance documents. In general, the procedure for implementing support policies is quite complicated. To support businesses in the current situation, State agencies should only base on criteria such aspay insurance, revenue and check the factory to review support conditions. If the declaration procedure is too much, it will be difficult for enterprises to access the policies.

Enterprises from 2 key import markets of textile sector suspend import VCN – On March 18, Phan Van Viet, Vice President of HCM City Textile and Garment – ...

According to the Ministry of Industry and Trade, declining production will directly affect workers’ jobs and lives, of which the greatestimpact is on the textile and footwear industry. According to the Ministry of Industry and Trade, the Covid-19 pandemic will directly affect about four million workers in the country's textile and footwear industry.