2023 will be the most difficult year for textile exports in more than 30 years

Vietstock – 2023 is the most difficult year for textile exports in more than three decades

It is expected that 2024 will be a very difficult year for textile and apparel companies, so expanding customer profiles, product diversification… is one of the necessary solutions to maintain production and business.

It is expected that textile and apparel companies will still face many difficulties in 2024, so taking advantage of the smallest opportunities in the market, expanding customer profiles, and diversifying products… are among the solutions proposed. Textile and apparel companies do this to maintain production and business activities and retain employees.

Continue to maintain the action slogan of “Choose Difficult Jobs”

According to a report by the Vietnam Textile and Apparel Association (VITAS), if by 2022, exports will reach 44.4% billion dollarsan increase of nearly 10% compared with 2021. By 2023, due to the impact of the world and domestic economic situation, the textile and apparel industry must face many challenges, including inflation in major markets, declining purchasing power of forces such as the United States and Europe, and orders have not improved. signs…

Mr. Le Tien Truong, Vice Chairman of the Board of Directors of Vietnam Textile and Apparel Group (HN:), commented that if 2020 is not considered, 2023 will be the most difficult year for the export of the textile and apparel industry in more than 30 years. The world is shut down due to the pandemic. Industry-wide turnover fell by 10%, with unit production costs falling by 30% and even by 50% in some product codes, which partly explains the difficulties for operators and workers to maintain production efficiency and commercial activities.

Facing the dilemma of “uncertainty” in the market, experts suggest that companies need to continue to move towards the goal of diversifying markets, products, and customers. Based on lessons learned from sustainability in 2023, coupled with global market requirements for sustainable textiles and apparel. Invest deeply in digital management, reduce the use of fossil materials… to meet the highest demands of our customers.

At the same time, we promote investment in technology and automation of production lines to ensure fast delivery times, small product codes, and high product quality. This will undoubtedly be one of the strategic changes for apparel companies, as large, professional orders will become less and less, and the focus will be on solutions for the fashion industry.

Against the background of declining overall demand and fierce competition among textile and apparel producing countries, Vietnam has remained a bright spot in the region due to its political stability, high production capacity, highly skilled workers, and good remuneration. Employee retention policy…

Mr. Than Duc Viet, General Manager of Garment 10 Corporation, said that in 2024, the world and Vietnamese economies are expected to still face many difficulties and challenges, and world economic growth will still depend on many unpredictable factors. The textile industry will face a series of difficulties such as EPR (Extended Producer Responsibility) and CBAM (Carbon Border Adjustment Mechanism) mechanisms, as well as the “sustainable fashion” strategy to replace “fast fashion”… Export orders are expected to continue to decrease, and the trend is towards small batches , the delivery time is fast, the supply chain still has risks, and the input cost is high.

In addition, there are also debt repayment risks, interest rate risks, and exchange rate decline risks. The trend of digital transformation and cyclical business is happening rapidly… Against this background, on May 10th, we will focus on and actively seek and develop domestic and foreign markets with the spirit of overcoming difficulties, and take good care of the job market for employees in the strategy , product and customer diversification.

In addition, the company also focuses on serving production, product R&D and transformation, researching new products and new materials, speeding up sewing samples, stamping samples, and sample quality… It is difficult to process orders, the product structure is complex, and the delivery time is fast… In particular, we strengthen quality management and continuously develop new products.

Mr. Vietnam shared, “On May 10, we continued to maintain the action slogan of ‘Choose difficult jobs’, with the motto of ‘Protect customers, orders, markets, labor and strictly control costs.'”

production flexibility

When assessing the situation of the textile and apparel industry, Ms. Hoang Thuy Oanh, deputy general manager of Hoa Shou Textile and Apparel Joint Stock Company, said that through monitoring and observation, the current apparel industry market has not yet taken shape. More specifically, the market will still experience significant volatility in 2024, so companies need to proactively develop adaptive measures to reduce the impact when the market deteriorates;

According to Wood Mackenzie’s forecast, global GDP will continue to decline this year, coupled with long-term geopolitical conflicts… resulting in global consumers facing pressure to reduce purchases of non-essential goods, including textiles and clothing, which will directly affect the order situation of Vietnamese companies.

However, Ms. Oanh said that when Vietnam establishes comprehensive strategic partnerships with the United States and Japan, textile and apparel companies will gain growth opportunities in the U.S. and Japanese markets.

On the other hand, consumers and importing countries are increasingly concerned about the responsibility of importers and supply chain members… This creates new requirements for clean energy, product recycling, extended manufacturer responsibility or carbon tax adjustment mechanisms… and of course, There will be additional standards in the near future to guide manufacturers to be more responsible to the environment and workers.

In view of the basic characteristics of the market in the coming period, the board of directors of Heshou Textile and Garment Company has formulated a number of response plans, with flexible production and operation, focusing on technology. Market staff need to pay close attention to the market and partners to make predictions and formulate production plans and maintain Business operations.

For the U.S. and Japanese markets, there is a need to delve deeper into customer profiles and product sources to fully exploit the opportunities in these two markets, while continuing to expand and promote trade in other markets such as the EU and South Korea. , Thailand…

“Currently, Heshou still has a large proportion of low-end customers, so the company focuses on research and development of products and gradually moves to the mid-to-high-end market. In the medium and long term, companies need to make large investments and meet the standards of the import market, so that they have the opportunity to obtain supply and Maintain production and business activities,” said Ms. Hoang Thuy Oanh.

At the same time, fiber industry companies have also formulated policies to flexibly respond to market and customer needs. Ms. Le Thi Que Huong, deputy general manager of Phu Bai Fiber Joint Stock Company, shared that industry insiders believe that the fiber industry market will still be relatively weak in 2024, and it will not pick up gradually until at least the end of the first and second quarters.

As for Phu Bai Yarn, the company has been processing and spinning recycled yarn since 2018, and so far, the company’s 3 factories are operating at full capacity, with the output of this product being about 70-80%.

Like Yarn Factory 3, a 2-story yarn factory that has just been invested simultaneously, according to Ms. Huong, this unit used to specialize in producing 100% cotton, but at this time, the company also had to switch products to meet the needs of customers and the market. with customer.

“In terms of market, Phu Bai Yarn has always been one of the stable units in the export market, mainly concentrated in Japan and South Korea. Although there is still great uncertainty in the market when demand in the garment industry is relatively low in 2024, current production The plan is no longer quarterly but only monthly, but currently we are trying our best to have enough orders before the end of the month to run three factories at full capacity in January 2024,” added Phu Bai Fiber deputy general manager.

Mr. Vu Duc Giang, Chairman of Vitas, said that the development direction of Vietnam’s textile and garment industry is to gradually shift to production methods that bring higher added value and make significant contributions by 2035. Mainly from exporting Vietnamese brand products.

Achieving this transformation requires companies’ firm determination in sustainable production, greening and digital transformation. Introducing technology into production and business processes, companies are gradually adapting to small orders, short delivery times and the mandatory use of recycled materials…

In the development trend, textile companies have always maintained the goals of difficult orders, complex product structures, rapid product change, fashion, and fast delivery.

“To achieve this, companies are forced to make major changes in production methods. The application of technology in production has helped textile industry companies reduce costs, increase productivity, and create high-quality products that are in line with the trend.” Mr. Jiang emphasized .

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