Workers at a textile company in northern Vietnam. (Photo: VNA) Hanoi (VNS/VNA) - A diversified supply chain and numerous free trade agreements (FTAs) have set the stage for a strong comeback for Vietnam's footwear and textile sector, said experts and industry leaders.
Despite the COVID-19 pandemic, the sector reported strong export figures for 2020 with foreign brands and partners already saying they would either increase production or place additional orders from Vietnamese textile makers in 2021, according to the Vietnam Textile and Apparel Association (VITAS).
"In the short-run, firms should be trying to seek new markets and diversify their products. In the long-run, they must eye sustainable development and advanced automation," said Do Quynh Chi from the Ministry of Labour, Invalids and Social Affairs.
The pandemic encouraged domestic firms to connect among themselves in order to secure supply materials and establish joint production operations. It was especially important for smaller firms as they were able to learn from bigger players, to adopt better technologies and access more advanced machines.
Nguyen Van Thoi, CEO of textile maker Thai Nguyen-based TNG, said international supply chain disruptions caused by the pandemic forced his firm to look for domestic suppliers.
In addition, FTAs such as the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) set strict standards for textile firms on product origins, forcing firms to source production materials domestically, said VITAS' President Vu Duc Giang.
Giang said Vietnamese firms retained certain advantages as their products typically fetch higher value and required more sophisticated production techniques compared against competitors. For instance, Vietnamese firms overtook their rivals to become the largest exporter to the US in June this year, a place usually held by Chinese firms.
While Vietnamese firms only hold a modest market share in the EU, the EVFTA, which came into effects on August 1 this year, is said to provide a major boost to Vietnamese exports. Among them are footwear and textile products, which were forecast to increase by 50 percent and 67 percent, respectively by 2025.
According to VITAS, demand for textile products in major markets such as the US and the EU is set to return to pre-pandemic levels in the latter half of 2022. The association urged firms to stay connected, to share solutions and to pool their resources to overcome the pandemic as well as to improve management and production efficiency./.
VNA
