Digital transformation in corporate governance and management is needed for local textile firms to enhance efficiency in a new normal, Prime Minister Nguyen Xuan Phuc has said.
Vietnam's textile sector should continue to promote the local brands and form new supply chains so that Vietnamese firms could play a more active role in the global fashion industry, according to Prime Minister Nguyen Xuan Phuc.
|Prime Minister Nguyen Xuan Phuc at the meeting. Photo: Quang Hieu.|
During this process, textile firms have to take on the digital transformation process, especially in corporate governance and management, to enhance efficiency in a new circumstance, stated Mr. Phuc in a meeting with representatives of the textile and footwear industries on November 23.
According to Mr. Phuc, it is essential for the garment and footwear sectors to take advantage of free trade agreements, including the newly-signed Regional Comprehensive Economic Partnership (RCEP), to expand the supporting industries for higher added value and ensure the resilience of existing supply chains.
Mr. Phuc stressed the textile sector should aim for green growth and avoid negative impacts on the environment, which could be achieved with the application of the circular economy.
The PM said the textile and footwear industries with a combined workforce of 4.3 million play a key role in the economy. In 2019, the two sectors grossed an export turnover of US$62 billion, or 24% of the total exports.
Amid growing uncertainty in the global economy, Mr. Phuc suggested the two industries focus more on the domestic market and ensure a more balanced operation for both local and overseas markets, in turn laying the foundation for sustainable production in the long-term.
Textile industry to earn export turnover of US$34 billion in 2020
At the meeting, representatives of associations and businesses in the industry said Vietnam's effective measures against the Covid-19 pandemic have partly offset negative impacts on the sector and built trust among buyers.
A representative of Garment 10 Co. thanked PM Phuc for his timely approval of medical face mask and protective gear exports during the global Covid-19 outbreak. Thanks to Mr. Phuc's decision, the firm has turned the tide of a possible revenue fall this year to 3% growth in revenue.
Additionally, Garment 10 did not have to scale down its operations, but has even employed more with growing orders of face masks since May.
Meanwhile, the country's signing of the EU – Vietnam Free Trade Agreement (EVFTA), and most recently, the RCEP, would be a direct boost to the footwear and garment sectors, the representative noted.
In the first ten months of 2020, Vietnamese enterprises exported a total of 1.13 billion medical face masks, according to the General Department of Vietnam Customs (GDVC).
Since September, demand for face masks has sharply risen as countries around the world are struggling with a surge in Covid-19 infections, especially in Europe and the US.
In addition to medical face masks, major textile firms in Vietnam, including Garment 10, TNG, and Dong Xuan Textile are receiving huge orders of cloth face masks production.
Under the growing impacts of the Covid-19 pandemic, face mask production is considered a viable solution for garment companies in Vietnam to maintain operations and offset losses from lower demand for garments.
Vietnam has emerged as one of the world's major production hubs of protective gear and clothes, thanks to its capability of receiving large orders and quick delivery.
A report from Vietnam National Textile and Garment Group (Vinatex) predicted in 2020, global exports of garment products are set to reduce by 20% against that of in 2019 to US$600 billion.
In Vietnam’s case, the country's garment exports in the nine-month period of this year were estimated at US$25.6 billion, down 12% year-on-year. Such a decline in growth remains acceptable given a dim outlook of the global textile industry with an estimated contraction of 25%.
For this year, Vietnam's textile industry is set to reach export turnover of US$33.5 – 34 billion.
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