While Vietnam’s textile and footwear sector is still struggling to overcome the impact of the coronavirus, the country is now hit by a fresh wave of COVID-19.
Worryingly, many of these companies have reported a downfall in their revenue.
Among these are TNG Investment and Trading JSC., a domestic and international manufacturer of clothing and footwear that reported a 10 per cent downfall in its first half revenue and 29 per cent in net profit at US $ 79.3 million and US $ 2.84 million, respectively.
The Vietnam National Textile and Garment Group (VINATEX) reported a decrease in its revenue and profit by 15 per cent and 25 per cent, respectively. And all this despite partially switching its manufacturing capabilities to face mask and protective clothing and also retaining all its workers.
Moreover, as per a report by the Ministry of Industry and Trade, country’s apparel production in July was up by 13.2 per cent from June, but was nearly 5 per cent down year-on-year (Y-o-Y) in the year to date, while the export for the textiles and footwear fell by 21 per cent and 8 per cent, respectively, in the first 7 months of the year.
Song Hong Garment JSC also reported a decrease of 44 per cent in its profit to just US $ 5.26 million.
While switching to PPE and face mask protection was being considered as a saviour for the garment companies in the first half of the year, the global oversupply has resulted in prices to plummet.
Even the firms, including TNG, have stopped manufacturing masks and have started focusing on high-value products.
Furthermore, due to the pandemic a lot of these garment firms have not received any new order for high-value products in the second half of the year, according to the ministry. Another major concern has been the change in the consumer buying behaviour where fashion is now the less preferred choice and the demand for essential products is more.
VINATEX has made a forecast that Vietnam garment export is supposed to be down by 14-18 per cent Y-o-Y in the second half, and full-year exports to drop by 16 per cent to around US $ 32.75 billion.
The International Textile Manufacturers Federation has revealed that if the pandemic situation continues to remain the same till the end of the year, the global textile trade would be down by 15-20 per cent this year to US $ 600-640 billion.
However, even if the situation is controlled it would take around third quarter of next year for demand to return to normal.