Vietnam Textile and Garment Firms Recommend Wage Freeze
Vietnam: In Vietnam, textile and garment
manufacturing companies are facing stiff challenge in meeting their export
target for 2016. According to experts, the local manufacturers are competitive ability
as well as export orders. The major competitors of Vietnam in textile and
garment sector, namely - India, Bangladesh and China, have devalued their
currency, due to which, they are exporting their textile & garment products
at competitive prices, thereby negatively impacting the textile & garment
sector export orders in Vietnam. Additionally, the lending rates in Vietnam
lies within the range of 8% to 10%, which is further generating capital related
problems for the local manufacturers. The major factor which is affecting the
competitive pricing in textile & garment sector of Vietnam is sharp
increase in minimum wages of the textile & garment sector workers. The
average rise in wages is 26.4% for the domestic manufacturers and 18.1% every each
year for companies operating with foreign investment in the period of 2008-16.
In order to curtail the worsening situation of textile & garment export,
the Vietnam Textile and Apparel Association (VITAS) has suggested not to
increases minimum wages of textile workers in 2017. Domestic textile and
garment manufacturers has also intended to reduce the frequency and time it
takes to check garment products for customs clearance as a strategy to upsurge production
and competitiveness.
TechSci
Research depicts that the counter
measures undertaken by the Government of Vietnam would offset the negative
impact of the unfavourable conditions in the textiles sector of the country.
This move is expected to aid the demand for textile chemicals in the country.
According to the recent report published by TechSci Research, “Global
Textile Chemicals Market Forecast & Opportunities, 2020”, global textile chemicals market
is projected to grow at a CAGR of over 3% during 2015-20. Growth in the market
is anticipated on account of increasing per capita textile consumption coupled
with rising demand for high quality textile products. Moreover, increasing industrialization,
surging consumption of textile in engineered products, and rapidly rising
awareness about the benefits of using technical textile in workplace, are
anticipated to propel the global textile industry, thereby driving global
textile chemicals market over the next five years.