Vietnam’s garment sector sees things worsen amid the second wave of Covid-19
Vietnam’s textile and footwear industries which still reeling from the impact of the first, are likely to see things worsen amid the second wave of Covid-19.
TNG Investment and Trading JSC., which manufactures clothing and footwear for various domestic and international brands, reported first-half revenues and net profit were down 10 percent and 29 percent at VND1.84 trillion ($79.3 million) and VND66 billion ($2.84 million).
The Vietnam National Textile and Garment Group (Vinatex) reported a 15 percent decrease in revenues and 25 percent decrease in profits despite partially switching to manufacturing face masks and protective clothing. Song Hong Garment JSC. reported its profit had fallen by 44 percent to just VND122 billion ($5.26 million). RTW Retailwinds Inc., one of its major partners in the U.S., has filed for bankruptcy but still owes it around VND166 billion ($7.16 million).
A report by the Ministry of Industry and Trade said in July the country’s apparel production increased by 13.2 percent from June but was nearly 5 percent down year-on-year in the year to date. Exports of textiles and footwear are down 21 percent and 8 percent in the first seven months of this year.
Although manufacturing face masks and protective clothing was considered a lifesaver for many garment firms in the first half of 2020, a global oversupply of these products has caused prices to plummet. Some garment firms such as TNG even stopped making masks and started focusing on high-value products. With other countries, the country is being hit by a new wave of the coronavirus, getting orders has also become a difficult thing for the majority of garment firms. Many did not receive a single order for high-value products in the second half of 2020, the ministry said.
Another challenge facing the garment industry is that consumer behaviors have changed dramatically due to Covid-19. The top priorities for consumers now are medicines, food, and savings. In fact, clothing did come fourth in the list, according to some recent surveys by the global professional services company Deloitte of the international market and Vietnamese garment producer Vinatex of the domestic market.
Vinatex forecast Vietnam’s garment exports to decrease by 14-18 percent year-on-year in the second half, and full-year exports to drop by 16 percent to around $32.75 billion.
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