Material supply shortage hits Vietnam’s textile exports

Vietnamese textile companies are worried about the limited supply of materials affecting their export plans despite forecasting a steady increase in demand for their textiles in the short term. The country’s textile exports are expected to reach $43.5 billion in 2022. The sector’s export prospects are improving as major importers have reopened their economies.

According to the Vietnam Textile and Garment Association (VITAS), various free trade agreements coming into force are also boosting positive expectations.

However, Garment 10 Corp. fears that China’s Zero-COVID policy and the Russian-Ukrainian war could disrupt supply chains, hampering its ability to fulfill a new order, according to a report by an English-language Vietnamese daily.

Vietnamese textile companies are worried about the limited supply of materials affecting their export plans despite forecasting a steady increase in demand for their textiles in the short term. The country’s textile exports are expected to reach $43.5 billion in 2022. The sector’s export prospects are improving as major importers have reopened their economies.

Garment 10 director Than Duc Viet said China remained the top material exporter to Vietnam, accounting for half of the supply. His company has planned to diversify its suppliers in the next five to ten years to be less dependent on China, but it must accept the situation and seek the support of its partners in the short term.

The situation is even worse for Dap Cau Garment JSC., which imports 80% of its material from China. Its manager, Nguyen Duc Thang, pointed to delayed deliveries from Shanghai as the main cause of the disruption in his company’s production. His company must renegotiate with its partners to postpone the delivery.

Tran Nhu Tung, chairman of Thanh Cong Textile Garment Investment Trading JSC., revealed that the company would seek to substitute Korean and Thai materials or rely on domestic materials to meet shortages.

Some other companies have also thought of the same idea, but only the richest could make it work due to the high costs. Those with limited financial capacity normally have no choice but to ask for a delivery delay.

Trinh Xuan Lam, chairman of Tien Son Thanh Hoa JSC., said his company has been focusing on diversification to weather a tough time, but with little success. Material from other countries is insufficient to fill the void left by China.

According to the General Department of Customs, textile exports reached $8.8 billion in the first quarter of 2022, up 23% from the same period last year, marking the strongest quarterly growth in 10 year.

VITAS said Vietnam’s textile enterprises are urging the government to approve the textile and footwear development strategy by 2030 soon to make the industry self-sufficient in material production and compliant with the rules of origin set out in free trade agreements.

Fibre2Fashion (DS) News Desk

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