Vietnam has started facing severe challenges in its textile and garment manufacturing industry due to closure of markets in its major export destinations USA and EU.
According to reports, SMEs in Vietnam, especially in Ho Chi Minh City, are forced to temporarily close down, while some large established firms have also asked workers not to join back for quite some time.
Although some textile factories had already switched to mask and other PPE production, it is now observed that the domestic market for these products has touched saturation point, while export markets are requiring high standards in PPE which is not being met by most of the factories.
Pham Van Viet, Vice Chairman, Textile and Embroidery Association, Ho Chi Minh City commented on the prevailing situation and said, “Even if face masks are produced for the export markets, this is a temporary solution as mask export can’t bring long-term sustainability and profitability for factories. It’s just that we have been able to solve employment issue and pay salaries to workers to some extent.”
He further added that most of the factories can only last up to May end, while some big factories with better cash flow can last till September.
Similar to the situation of textile industry, Vietnam is facing complications in its footwear industry as well. Around 70 per cent of the orders have been cancelled and, by the end of April, most businesses had stopped operating which impacted around 1.2 million workers.
The reason behind this situation is said to be to difficulty for factories in accessing support policies. The firms expected relevant state agencies to guide them the policy procedures so that the enterprises could have registered their support packages in a timely manner and had a clue to adapt and assist them in solving difficulties.