Garment sector restyles production model
The
move comes in the light of advantages offered by the Trans Pacific
Partnership (TPP) and other free trade agreements that the country has
entered into with regional trade blocs around the world.
Le Tien
Truong, Vietnam Textile and Garment Group (Vinatex) General Director,
said that after years of manufacturing, enterprises had gained much
experience in manufacturing, management and labour.
This wealth
of experience serves as a foundation for enterprises to shift to FOB
(freight on board) and original design manufacturer (ODM) model,
according to the general director.
Vinatex is determined to
apply as soon as possible the ODM model, which will allow the company to
define the chain linkage of dye-textile-garment and improve its
business effectiveness index.
The group will review and improve operations to meet production targets for the domestic and international markets.
Nguyen
Xuan Duong, Management Board Chairman of Hung Yen Garment Corporation
Joint Stock Company, said that to be able to produce with the ODM model,
concerned sectors such as textiles, garments and dyes had to develop at
the same time.
However, the garment and textile sector was weak
in three areas: product development, marketing and chain linkage. To
develop the ODM model, businesses must overcome these weaknesses,
especially marketing, as well as clarify targets for the sector and
draft a material industry development plan.
Vietnam's garments
exports in the first nine months of the year reached 18 billion USD, a
19-percent year-on-year increase, and its garment imports reached 11
billion USD, said the Ministry of Industry and Trade (MoIT). As a
result, the sector achieved a 6.2-billion USD trade surplus.
Dang
Phuong Dung, General Secretary of the Vietnam Textile and Apparel
Association (VITAS), said that in spite of the high export turnover, the
added value remained modest.
This was attributed to sectoral
dependence on imported materials, as the country could only provide 1
percent of demand for cotton and 20.2 percent of demand for textiles.
Although
the sector could produce six million fibre bundles each year, only 30
percent of the fibre bundles could be used because quality remains below
standard.
Participation in the global supply chain is
considered passive, according to Dung. The sector is mainly focused on
manufacturing processed products and lacks product model designers.
Businesses that produce processed products are also passive in seeking
and expanding markets.
Deputy Industry and Trade Minister Ho Thi
Kim Thoa said the current world trend in garment included the
development of a package supply chain and e-commerce trading, both of
which remained a challenge to Vietnam.
In line with this, the
MoIT last April approved a garment and textile development plan from
2020 to 2030 that aims to make the sector a key export industry and
enable it to meet increasing domestic demand, create more jobs, enhance
competitiveness and firmly integrate with the regional and international
economy.
In the past few years, the sector has been relentless
in improving the investment environment, granting preferential policies,
expanding co-operation and luring capital.
Separate free trade
agreements that Vietnam has entered into with the European Union and the
Customs Union of Russia, Belarus and Kazakhstan, as well as the TPP,
would serve as huge opportunities for the sector to further access world
markets, added Thoa.-VNA