Textiles looks toward $US 30 billion

Mr. Le Tien Truong

The export turnover in the whole textile industry is estimated to reach SUS 28.5 billion, an increase of 5.2% compared to 2015, however, it is still lower than the expectation of $US 1.5 billion, completed 92% of the export plan. In which, exports of textiles reached $US 23.6 billion, increased by 3.3%, fibre exports are estimated to reach US 2.9 billion, increasing by 14.1%.

Explaining the causes of low growth, Tran Tuan Anh, Minister of Industry and Trade said because of the decline of world demands from the major export markets of Vietnam such as the US, Japan, and Vietnam and competition from emerging economies such as Cambodia, Bangladesh and Pakistan.

In 2017, this sector is expected to be difficult. Mr. Le Tien Truong, General Director of Vietnam National Textile Garment Group has some comments on the situation of textile exports in the past year and goals in 2017.

Sir, 2016 witnessed the difficulties of many commodities, including textiles. What is the solution that the textile industry has applied to achieve such results?

In 2016, the overal import in the whole country declined, export countries are in difficulty, even big countries like India, China are falling. Vietnam had a growth rate of 5.2% in 2016 – the highest level in 7 textile export countries in the world.

The Solutions which the business community has applied to gain such growth rate are to focus on improving productivity, shorten delivery time as well as complete the suppy chain in the country to reach the harder markets, and more small orders.

Along with the positive approach of businesses, macroeconomic and administrative procedures reform of the Government implemented in 2016 also had a positive impact, providers see the business environment of Vietnam increasingly improving.

Especially the reform in the Ministry of Finance, Ministry of Industry and Trade, Tax and Customs Departments have all helped shorten the time for public service. In the fashion industry, delivery time is a cricial element, thus, administrative procedure reform, shortening the time for public service, reducing costs of these services will be a big support for enterprises in the coming years.

In 2017, it seems the Trans-Pacific Parnership Agreement will not be approved by the US, and with the Brexit event, what is the strategy of the textile industry to achieve targets this year?

In fact, the market situation in 2017 is likely to be the same as 2016, or have a little brighter sign when the US economy tends to grow better. Thus, we have set a growth rate of 6.5-7% in 2017, a target of more than $US 30 billion.

In order to gain these figures, it needs the effort from enterprises as well as State agencies and the economic – social infrastructure, focussing on productivity, improving labor cost/unit of product, shortenning delivery time, consolidate logistics network.

The TPP may not be ratified, but the EU-Vietnam free trade Agreement and other agreements will surely bring more advantages for textile enterprises. What do you think about these agreements?

The agreement with the EU is big because the scale of the markets is up to $US 200 billion of textile products every year. However, 2017 is the year that the agreement with the EU will not come into force, and it is the time to prepare for the requirement of this agreement.

After having the agreement with the EU, we will have the same competitiveness level with other countries entitled to GSP such as Cambodia, and Bangladesh in some categories. This is the region where we expect to have growth in 2018.

For the other agreements, due to the smaller scale of the market, the general impact on the export sector of $US 35 billion in the coming time is not much. However, I think this is a new chance for small and medium enterprises to find their opportunities in these markets.

Thanks Sir!