Positives signs for garments and textiles
Positives signs for garments and textiles
Figures from the General Department of Vietnam Customs show that Vietnam’s export value of garments and textiles rose 9.15 per cent to $392 million and 3.2 per cent to $3.2 billion respectively in July.
Exports from the sector are expected to recover well during the rest of this year also, leading to an expected higher export volume in the second half of the year compared to the first.
Thanh Cong Textile Garment Investment Trading JSC (TCM) believes that positive signs are appearing on the horizon as more foreign partners from the EU and across Asia have come to Vietnam recently to learn about the textile industry here.
With a more positive outlook, consumers are expected to loosen their purse strings in the upcoming festive year-end season.
In the first seven months of this year, TCM saw almost $80 million in revenue, down 27 per cent, and $5.2 million in post-tax profit, a 22 per cent drop on-year.
The company’s revenue came from three major segments, from which garments accounted for 76 per cent, fabrics 16 per cent, and yarns filled up the remaining 6 per cent.
The company has received orders equivalent in value to 76 per cent of its revenue plan for Q3 and equivalent to 86 per cent of expected revenue for Q4.
TNG Investment and Trading JSC (TNG) suggested that the most challenging times have passed as the company posted an 11.5 per cent jump in revenue to $33 million for July compared to the previous month, and up 2 per cent on-year.
In the first seven months of this year, TNG saw $173.6 million in revenue, up 3 per cent on-year.
Currently, 98 per cent of the company’s revenue comes from exports, with the United States holding the largest share at 47 per cent, France making up 15 per cent, with Canada taking 8 per cent.
Song Hong Garment JSC (MSH) saw its Q2 business perform better than other firms as it became the only trader in the sector to return positive on-year revenue growth, and the company’s earnings before interest, taxes, depreciation, and amortisation grew over 10.5 per cent in the first half of the year.
According to a World Bank forecast for 2023, GDP growth in key export markets such as the US will expand 1.1 per cent, China by 5.6 per cent, with Japan inching up 0.8 per cent, leading to increased income and rebooted consumers’ confidence.
With a more positive outlook, consumers are expected to loosen their purse strings in the upcoming festive year-end season. The inventory of big fashion brands like Nike, H&M, GAP, and Inditex was far lower this year compared to mid-2022 and the need to replenish their stock could see brighter prospects for garments and textiles exporters in the coming period.
Amid a proposed 8-10 per cent drop in the global textile apparel total aggregate demand in 2023, Vietnam’s textile and apparel sector is estimated to reach $40 billion this year, down 9-10 per cent on-year.
Recently, the slow pace of recovery has seen firms struggle to find orders, exacerbating concerns about not hitting targets for the year. However, the sector's prospects have been upgraded by securities firms from neutral to positive, after taking into consideration the anticipated rosier future.
