Mounting difficulties may lead half of Vietnam textile-garment firms to bankruptcy
Mounting difficulties may lead half of Vietnam textile-garment firms to bankruptcy
Some importers from US and EU, major markets for Vietnam’s textile and garment industry, have stopped orders within three to four weeks on Covid-19 pandemic.
Vietnam textile-garment firms are facing mounting difficulties from shortage of input materials to lower demand from some export markets, which could cause half of the number of enterprises in the industry to go bankrupt.
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General Director Than Duc Viet of Vietnam’s leading textile manufacturer May 10 said the US market makes up 40 – 45% of the company’s exports, followed by the EU with 33 – 40%.
However, as a number of importers from the US and EU have stopped orders of Vietnam’s textile and garment products from three to four weeks due to the Covid-19 pandemic, the company is facing severe consequences, not to mention the current issue of lacking input materials for production.
In addition to supporting policies such as lowering of interest rates and rescheduling of debt payment, Viet suggested the government subsidize parts of workers’ salaries for companies operating in labor-intensive industries such as garment and footwear.
Phi Ngoc Trinh, general director of Ho Guom Garment Company, said many orders have been canceled, while some are facing delay in delivery due to export difficulties.
Trinh said the company is still looking for solutions at the moment. “Major export markets for Vietnam’s textile and garment products are struggling with the Covid-19 pandemic, leading to a plunge in demand,” Trinh added.
Echoing Trinh’s view, Vice General Director Nguyen Dinh Lap of Truong Phuc Hung Yen Company said a sudden disruption of export to the US and EU markets put local enterprises in a difficult situation.
Lap added the company is scaling down operations until the pandemic is over, but it still pays 70% of normal salaries for employees. If the Covid-19 pandemic persists for a longer period, enterprises may have to stop operation, or even face bankruptcy.
Vice President of Vietnam Textile and Apparel Association (VITAS) Truong Van Cam said enterprises are trying to keep their businesses running at the moment, but without substantial support from the government, it is hard for them to survive through this difficult period.
