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.