In 2019, Vietnam National Textile and Garment Group (Vinatex) proposed a growth rate of 8 – 10% due to unpredictable developments of the world market and competitive pressure from CPTPP.
Information on production and business plans in 2019, Vinatex leaders said that 2019 will continue to be a year where the market has unpredictable changes, especially when the US-China trade war is still tense, Brexit at European Union … The unstable global economy will potentially risk devaluing VND, causing damage to textile and garment enterprises in terms of exchange rates when importing raw materials. Meanwhile, domestically, the forecast of input costs of the textile and garment industry (regional minimum wage; electricity prices) continues to tend to increase. Therefore, the Group sets a moderate growth rate of 8 – 10%, export of the whole industry is about 40 billion USD.
From January 1, 2019, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) coming into effect will also be a growth engine for Vietnam’s textile and garment industry in general and Vinatex in particular. However, the challenge is not without. Typically, the tariff reduction under the CPTPP will have two-sided effects, including the direction of goods from strong textile countries to flow into Vietnam at competitive prices. This can affect prices and lead to lower margins in the textile industry.
In addition, according to some recent reports, the textile industry mainly imports raw materials (90% raw cotton, 100% synthetic fiber, 50% cotton and 80% broad fabrics) from China, Taiwan. Loan and Korea. These are markets that do not participate in the CPTPP. Therefore, if they keep the “yarn-forward” origin principle in the CPTPP, businesses may not benefit much from tariff reduction.
Answering the question about what Vinatex has prepared for the challenges of 2019, Mr. Cao Huu Hieu, CEO of Vinatex said: “To compete with rivals, over the years, investment projects Vinatex’s new company has been properly invested, approaching environmental friendly production criteria, taking productivity and quality as a competitive advantage ”.
The CPTPP has a strict requirement of origin. This is not a small challenge for Vietnamese enterprises, because currently the textile and garment supporting industry depends too much on raw materials imported from China, India and some ASEAN countries. … but is the expectation of textile enterprises
It can be said that when it comes into effect in early 2019, the CPTPP will create a big push and bring a driving force to the development of Vietnam’s textile and apparel. According to experts, the CPTPP is expected to be a golden opportunity for the textile and garment industry of Vietnam with the estimated number of textile and garment export turnover up to 2025 is up to 50 billion USD, nearly double 2015 with 27 billion USD. Although it is not the size of the old TPP Agreement, it also helps many countries to access new free trade markets.
According to Ms. Nguyen Thi Thanh Huyen, General Director of Garment Corporation 10, the labor market in the textile industry will also increase in both quantity and quality. When the tax rate is 0%, goods exported to other countries will increase, meaning a great demand for the workforce. The labor force involved in the textile and garment industry will be higher, leading to better quality of the labor force, creating momentum for the growth and development of the textile and garment enterprises.