Production at Son Ha Garment Export Factory in Thanh Hoa province. Local businesses need huge capital to invest in green production processes. (Photo: VNA) According to General Director of the Vietnam National Textile andGarment Group (Vinatex) Cao Huu Hieu, the group has predicted its difficultiesof this year since 2022. The group has faced difficulties in two mainproduction fields of yarn and garment.
For yarn production, the difficulties include low demand for yarnin the market, and more competition in the price of yarn after China officiallyreopened.
Meanwhile, "the garment industry has had only small orderswith a few thousand products, and processing price per unit of the garmentproducts has dropped sharply. In addition, delayed delivery by partners hasalso caused difficulties for businesses in terms of capital and warehousing.Customers also have stricter requirements," Hieu said.
At the recent annual general meeting of shareholders, the leadersof many textile and garment businesses warned that brands in the global marketask them to reduce production costs and have fast delivery. The brands alsohave many other requirements relating to sustainable and green development,energy saving and reduction of emissions, while they give just small orders forlocal businesses.
The requests come from consumer demand in the global market thatchanges from fast fashion to sustainable fashion, according to the leaders.
Therefore, those factors force businesses to change to participatedeeply in the global supply chain. If they do not have investment in hightechnology, Vietnam's textile and garment industry will not be able to competewith rivals, like Bangladesh and India for the next three years, said Phạm VanViet, Vice Chairman of the Ho Chi Minh City Textile and Garment EmbroideryAssociation and General Director of Viet Thang Jean.
According to the US Green Building Council, Bangladesh iscurrently home to the most eco-friendly garment factories in the world. Bangladesh'stextile and garment industry received 3.5 billion USD in foreign directinvestment in 2021 mainly for green projects.
Bangladeshi textile manufacturers expect the country's textileindustry to account for more than 10% of the global market by 2025 with strongdevelopment of green garment products, reported Tapchi Doanh nhan (Businessmen Magazine).
In an effort to green the textile and garment industry and gainthe target of 100 billion USD in textile and garment exports by 2030, theIndian Government has proposed the establishment of a task force to solveenvironmental problems in the textile and garment industry. Besides that, thereare a series of textile and garment green production programmes.
Local businesses need huge capital to invest in technologyrenovation and green production processes or build their own brands. It isdifficult to do this because up to 70% of enterprises in the garment industryare small and medium sized ones, said Viet.
According to the Vietnam Textile and Apparel Association (VITAS),most manufacturers in the global textile and apparel supply chain, not only Vietnam,are receiving requests to meet green standards from big brands.
If not meeting these requirements, there is a great risk of movingorders from Vietnam to other countries with sustainable textile and garmentindustries like Bangladesh.
Meanwhile, Vietnam has also committed to reducing emissions tozero by 2050 at COP26. In the FTAs between Vietnam and its partners, there arealso strict regulations relating to greening that the businesses need to meet.
The VITAS Sustainability Committee sets targets that by 2023VITAS' textile and garment enterprises reduce energy consumption by 15% andwater consumption by 20%, while two textile and garment industrial parks willimprove efficiency in electric consumption and water circulation. By 2030, thetextile and garment industry will implement green development and build 30international brands.
The urgent requirements for this industry are greening anddigitisation, but capital is a big challenge for the renovation, according tothe association.
As of March 31, 2022, total outstanding loans for the textile andgarment industry reached about 150 trillion VND (638.8 million USD), accountingfor about 1.5% of the total outstanding loans in the economy, according to theState Bank of Vietnam.
Of which, the loans for green projects of the textile and garmentindustry by the end of 2022 were still insignificant because few businesses metthe strict requirements for green credit loans.
Meanwhile, VITAS estimates that the industry needs a large capitalat about 500-600 trillion VND for the green transformation.
Therefore, the industry has proposed the Government to considerreducing interest rates and delay of payment for debt; or having support forthe textile and garment enterprises in implementing sustainable development,green transformation and development of a value chain from materials toproduction and export.
The Power Plan VIII approved on May 15 is also a driving force forlocal businesses in general and garment enterprises in particular to followgreen production.
To solve the challenges, many businesses are actively diversifyingmarkets and products. According to VITAS, they consider increasing exports to anumber of potential markets such as the Commonwealth of Independent States(CIS), Latin America, Africa, the Middle East and China.
Meanwhile, many businesses are moving to use more natural andbiodegradable materials. Phong Phu Corporation has used environmental impactmeasuring software at its production facilities to propose the use of materialswith low impact on the environment. Vinatex has also deployed yarn management softwareat its subsidiaries. Viet Thang Jean has applied ozone technology andnanotechnology in dyeing and adjusting fabric colour./.
VNA
