Vietnam garment factory increase local retail presence

Several Vietnamese clothing manufacturers are enhancing their domestic retail presence to retain their hold over the home market, in view of intensifying competition from overseas retailers.



Several global brands like AEON, Warehouse, E-Mart, The Gap and Karen Millen have recently penetrated into Vietnamese market.

In order to compete with these retailers and retain their market share, Vietnam’s domestic players are enhancing their presence in the home market by opening new retail chain outlets. 



The Gap, a leading garment retailer from US, recently launched two retail outlets in HCM City and intends to launch more outlets in HCM City and Ha Noi during the year. 

Vinatex Mart, Vietnam National Textile and Garment Group’s retail textile and garment departmental store, launched five outlets in HCM City and in the provinces of Tay Ninh, Hoa Binh, Gia Lai and An Giang in December last year with a total outlay of VN$ 100 billion (US$ 4.8 million).

Vinatex Mart is planning to launch 200 outlets across Vietnam by 2015, 12 of which would be launched this year itself. This would take the total number of Vinatex outlets across Vietnam to 75 by the end of this year. 

Likewise, the Ha Noi Textile and Garment Joint Stock Company, which presently operates with nine outlets and 69 agents in the country, is also looking forward to enhance its presence in the domestic market, and has recently started Hanosimex Trade Centre in Ha Noi’s Ha Dong District.
 

Fibre2fashion News Desk

Vietnam garment exporters rise sharply in 2011

Vietnam clothing manufacturers reached US$15.6 billion for exports in 2011, up 38 percent against 2010, the highest growth over the past five years.

The sharp increase is attributed to rising export prices and increasing number of export contracts for Vietnam garment factories to traditional markets, such as the US, the EU, and Japan.

The success of Vietnam garment exporters are due to better market forecast and the creativeness in dealing with impact of economic downturn, high input material cost and difficult access capital. In addition, Vietnam garment manufacturers have restructured their operation and investment effectively and established reliable relations with clients.

Next year's prospect of Vietnam garment exporters

Although Vietnam garment factories are at the busiest time of the year to run orders before Tet, they have proposed some concern about orders for the remaining of the year.
 
Many overseas partners show their interests in Vietnam clothing manufacturers but have not yet made a final decision to run specific orders.
 
In the short term, Vietnam clothing manufacturers will have a stable amount of orders for delivery until March and April next year, but are unsure for the rest of the year.
Spending restriction in Japan and the debt crisis in Europe are the main reasons affecting Vietnamese garment exporters.

Vietnam clothing manufacturers enjoy $6.5 billion surplus

Despite the fact that  the country’s trade gap has widened and raw material prices have fluctuated wildly, with export turnover expected to top US$13.8 billion this year, $1.5 billion more than last year, Vietnam garment factories remains the country’s top earner,

Statistics also show that the percentage of materials used by Vietnam clothing manufacturers has turned to locally provided.

The breaking earnings of Vietnam garment factories  has said to be a result of well-conducted market forecasts and efficient investment and production, adding that Vietnam garment exporters have also managed to win the trust of international partners and customers.

New goal for Vietnam clothing manufacturers for the year 2012

Vietnam clothing manufacturers has set a target to raise its export revenue next year by 10-12 percent from 2011 to $15 billion.
It is also stated by these Vietnam garment factories that their main markets remain to be the United States, Europe and Japan.

Vietnam clothes manufacturers are most likely to achieve export target.

Vietnam garment factories are most likely to reach its yearly target of US$13 billion in export this year, according to the Vietnam Textile and Apparel Association.

The association said its members have so far this year exported US$10 billion and they are expected to ship aboard products valued at US$3 billion in the remaining months of this year.

Apart from the EU, Japan, Russia and the Middle East, the US remains a key market for Vietnamese garment manufacturers in the coming time, the association added.

A new development of fibre plant aids Vietnam exporters

Yarn manufacturer Dai Cuong Group last week inaugurated its VND500 billion (US$23.5 million) fibre plant in Tien Hai District Industrial Zone, Thai Binh Province.

The 15,000sq.m plant, reported to be the most modern facility in Southeast Asia, would be able to produce 8,000-11,000 tonnes of fibre per year with about 500,000 Swiss spindles.

Its products would be aimed at markets in Turkey, Japan, Korea, Brazil, and the US. It would earn an annual revenue of VND750 billion ($35.2 million) and generate nearly 300 jobs after opening.

Vietnam clothing manufacturers face slowdown.

Due to the economic downturn in the US and Europe, exports of every Vietnam clothes manufacturer could reduce significantly with the decrease in orders from the two markets for the next months of 10%.
In fact, a Vietnam clothes manufacturer usually received many orders in the three last months and first two months of a year but this year the situation seems to change, some Vietnam clothes manufacturers don't even have enough orders for December.
The economic meltdown taking place in some European countries in recent years had also affected Vietnam garment exporters. Jackets were the most affected items, with many firms seeing orders plunge 30 per cent. Exports to Europe were forecast to decline by 10-15 per cent.
Besides, Due to Government's monetary tightening policy of the US - the biggest market of Vietnam clothing manufacturers, many risks appear towards the exports of Vietnam garment manufacturers.
Therefore, Vietnam clothing manufacturers had to switch to other markets like Japan, the Republic of Korea, some other Asian countries, and Canada.

Alternative Markets for Vietnam Clothes Manufacturers

Due to economic turbulence, exports to traditional markets of Vietnam clothes Manufacturers seems to decline.  

As a result, every Vietnam clothing manufacturer is eyeing other alternative markets to maintain profit and growth.  

Japan, the EU and the US are still the most important markets of Vietnam Clothes Manufacturers, which account for 12 percent, 17 percent and 51 percent of the total exports respectively.  

Exports to Cuba in the first seven months of this year rose by 470.8 percent, while the respective figures recorded for the Indian, Korean, Thai and Chinese markets are 156 percent, 144.2 percent, 131.1 percent and 127.6 percent.  

The new markets account for 20 percent of the total export turnover of the textile and garment sector, doubling the figure recorded five years ago.  

Since Vietnam’s textile and garment products can pass the strict technical standards to enter the EU and the US markets, it is not so difficult for them to enter the others.

New projects to boost production of vietnam clothes manufacturers in center of Vietnam

Recently Nghe An's Department of Industry and Trade has encouraged projects with investment and expansion of every clothing manufacturer in the region to meet the country's objectives stated in the development plan for 2011-20 period. 

According to the plan, the target of Vietnam clothes manufacturers in Nghe An is to produce 16 million pieces of knitwear, 96 million garments and 284,000 tones of thread this year ( 160%, 115%, 133% increase compared with the previous year).

Currently, Nghe An is home to more than 2,500 Vietnam clothes manufacturers and is listed as one of the targeted province to build up specialized industrial cluster in the center of Vietnam.

$4.3 million worth investment from Italy to boost production of Vietnam clothing manufacturers.

In late July, 2011, the United Nations Industrial Development Organization (UNIDO) stated that Italy will spend $4.3 million in a sponsor program to develop clothing manufacturer in Vietnam together with 2 other industries namely leather shows and decoration wood.
According to UNIDO, Vietnam clothing manufacturer will be provided with investment to enhance technologies, expand product promotion and develop marketing campaigns and cost management systems. 

Also, 3-million-euro program will include the provision of training classes for the companies involved.

Together with this investment, Italy investors hope to get Vietnam clothing manufacturer loosen the high dependency on materials and designs supply from overseas, from which boost production and values of exports of Vietnam clothes manufacturers.

UNIDO will also aid in seeking business partners for Vietnam clothing manufacturers in the European market.

18 businesses in Hanoi and Hung Yen and 16 others in Ho Chi Minh City involved in the garment sector have been selected for receiving the support.

Japanese based company is licensed to open a new clothes factory in Vietnam.

The Tokyo Style Vietnam Hue Ltd Co was licensed to launch the construction  of its new clothes factory in Vietnam in Phu Bai Industrial Zone, Thua Thien Hue.
The investment worths US$21 million to build up a new Vietnam clothing manufacturer which specializes in exported. The project is proposed to finish on March 2012.

Tokyo Style currently owns 3 garment factories in China. Moving production to Vietnam is stated as a way to reduce the risk in production and widen the material supply chain.
The garment specialty for this new garment manufacturer in Vietnam is fashion clothes for women.
On completion, the production capacity of this Vietnam clothing manufacturer is expected to be around 400,000 products in the first year of operation and go up to 500,000 products annually at the following years. The number of worker initially is stated to be about 500 people and up to 1000 people.

With US$21 investment, This clothes factory in Vietnam is said to be the largest factory of Tokyo Style till date.

Investment to boost exports of Vietnam clothes manufacturers

Vinatex, the representative of clothing manufacturer in Vietnam has announced an investment of US$2.1 billion with projects to build new production facilities for Vietnam clothing manufacturer as part of the development of plan toward 2020.

This huge investment into Vietnam clothes manufacturers is supposed to generate an annual increase of 12%-14% in production value of clothing manufacturer in Vietnam and a 15% surge in export turnover.

Vinatex will focus firstly on building factories specialized in producing raw materials required for production, secondly on improving technology of equipments used to boost productivity, from which create and expand raw material cultivation areas.

The target is to produce 300,000 tons of fiber by 2020, 675 million square meters of fabric supply the raw materials required of most clothing manufacturer Vietnam to produce 706 million garment products per year and generate export revenue of more than US$ 5 billion.

To fulfill this target, the implementation plan is to develop 31 fiber plants, 21 fabric plants and 164 Vietnam clothes manufacturers in the next 10 years.

The source of capital will come from proceeds from auctioning land in highly-urbanized areas, bank loans, privatization of enterprises and foreign sources.

Also, as part of the regional planning, Vietnam clothes manufacturers which are in inner city will be relocated to the countryside. The raw materials zones will be located in 8 provinces including Dak Lak, Dak Nong, Ninh Thuan, Son La….

Moreover, top priority for clothing manufacturer in Vietnam is to diversify designs and improving quality by increasing the ratio of local content to reduce costs of import. Besides, evolving from sub-contracting to original design manufacturers is also a main target.

Vinatex takes over a Vietnam clothing manufacturer in centre of Vietnam

Dai Cat Tuong is a Vietnam clothing manufacturer located in Quang Ngai Province Vietnam. This clothes factory in Vietnam was founded in March 2005 with capital of 38 billion VND. 

After several years of making loss resulted by many strikes of workers in this clothing manufacturer in Vietnam in 2008, it came up with a suspension in production in 2010.
 
Vinatex, the representative of Vietnam clothes manufacturers has announced on 18th July that they has taken control over this clothing manufacturer in Vietnam by buying nearly VND 39.9 billion shares of the company in the auction. After the take-over, Vinatex would invest over VND 50 billion in renovating this clothes factory in Vietnam with plans to buy machines, build dormitories for workers and increase employment to 3000.

A new protective clothes factory in Vietnam

A new clothing manufacturer in Vietnam which specializes in producing protective suits and uniforms for industrial manufacturing has licensed to operate in Binh Dinh province. This new clothes factory in Vietnam is 100% foreign own, a joint venture between two Japanese companies named Toyotsu Vehitecs and Toyota Tsuho Corporation. The foreign company has invested US$1.5 million to build up this new Vietnam clothing manufacturer in My Phuoc 3 Industrial Park, Ben Cat District.
 

On completion, the protective clothes factory in Vietnam is supposed to create job for over 210 workers with capacity of 360,000 units annually. This clothing manufacturer in Vietnam will focus on the Japanese market only with proposal of manufacturing protective suits and uniforms for car makers in Japan such as Toyota, Mitsubishi, Daihatsu and Suzuki.

A new clothing manufacturer in Vietnam.

A new 100% foreign owned clothing manufacturer in Vietnam has been licensed to be constructed in Tra Vinh city by the local Government.
 

This new clothes factory in Vietnam is the investment of Korean clothing manufacturer called Grace Vina.
 

This clothes factory in Vietnam will produce women's apparel for export with expected annual capacity of 26.9m products.
 

The new clothes factory in Vietnam will due to open in February next year and provide jobs for around 3000 workers.
 

Korean investors is said to be the biggest investors in clothes factory in Vietnam.

Indian textile firms seek corporation with Vietnam clothes manufacturers.

Vietnam garment exporters have listed as a leading exporter of garments in the world. However, the issue which is still the concern of most clothing factories in Vietnam is the raw materials required for producing high quality products including cotton yarns and fabrics. The amount of these raw materials which are from domestic firms are not enough to supply the demand of Vietnam clothes manufacturers.
Understanding this issue of Vietnam garment exporters. Indian textile firms have made an offer to many Vietnam garment factories to supply any kind of raw material used in textile and garment production of Vietnam clothing factories.

In recent years, the imports of cotton textiles form India to Vietnam clothes manufacturers have considerably increased, say $50 million in 2010.

In the first four months of this year, not concerning about the fluctuation in the price of cotton, the trade amount between India and Vietnam in all sectors reached $1.26 billion and predicted to reach $4 billion by year-end.

Currently, India is one of main competitors of Vietnam garment exporters. However, this offer to work in coordination is supposed to help in utilizing the competitive advantages of both India and Vietnam clothes manufacturers towards mutual benefit.

The affect of a sharp fall of cotton price on Vietnam clothes manufacturers

During the last 6 months of 2011, the cotton price was at peak on March worthing 229.67 cents per pound of cotton.
 

Many of Vietnam clothes manufacturers had to endure with this high price at the time because they need to import 80% of this type of materials to be able to make enough yarn for export.
 

However, the price of cotton dropped considerably in April and May. At the end of May the price of a pound of cotton was recorded to be 165.52 cents per pound. This was a hit on Vietnam clothes manufacturers causing a great loss to their production.
 

Besides, “The import price, inclusive of cost, insurance and freight, has dropped from US$4.2 per kilo when the contract was signed to nearly US$3.2 when the cargo arrived in the storehouse in Vietnam that took nearly one month. After production, the yarn currently has the new sales price at only US$3.9 per kilo and that explains why many yarn manufacturers incur losses,”

Workers at a Vietnam clothing manufacturer fighting for a higher monthly salary.

Recently there was a strike of workers in a South Korean-owned clothing manufacturer in Hanoi over low wages. Employees of  the Vietnam garment manufacturer named Ivory Garment Company exposed the reason for the strike is that they could not manage to survive with their current salary that the Vietnam clothes factory Ivory is paying.

Workers in this clothing factory in Viet nam are trying to claim for a rise in bonuses and job perks including overtime working extra payment from 10 dollars to 20 dollars per month and bonusses for senior staff from 1 dollar to 2.5 dollars per month.

At present, the minimum wage for a new worker at that clothes factory in Vietnam is 1.5 million dong (75 dollars) per month. This salary will be increased to 2 million dong (100 dollars) after 5 years of working.

As at the time of high inflation in Vietnam, this wage is not sufficient enough for workers in this Vietnam garment manufacturer to cover their living expenses.

Vietnam clothes manufacturers may reach $13 billion on exports at the end of the year.

With the encouraging results for the first 6 months of operating, every Vietnam clothing manufacturer is on the way to fulfill the export target for the year, namely 13 billion.
 

As recorded in June 2011, there was an 30 percent increase of exports from Vietnam garment factories with a revenue of $6.16 billion. It is said to be the highest first half growth rate in the production of Vietnam clothes manufacturers in the last four years.
 

This is the promising results for clothing factories in Vietnam in the attempt to reduce their energy and management costs while struggling with the rise in raw materials costs and high interest rates.
 

Another solutions are considered by clothing factories in Vietnam in the time of high inflation are to reduce their reliance on bank loans and to manage to allocate their own capital efficiently as well as to give priority to short-term contacts only to recoup their capital as soon as possible.
 

Vietnam clothes manufacturers are competing to remain in the top 5 garment exporters in the world as in 2010 with total turn over of $11.2 billion.