Difficulties continue to plague the textile and garment industry in Vietnam in general, including Nghe An province. Recently, in the Q1/2023 production review, Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Garment Association, stated: “Never in the past several decades has Vietnam’s garment export industry faced such difficulties and pressure as it does now. Orders decreased from Q3, then Q4/2022, continued into Q1/2023, and are still declining. In the first two months of the year, export value continued to decrease by 20%. Currently, there are still no orders placed for June and July.”
It's worth remembering that in the final months of 2022, the textile and garment industry had to lay off a large number of workers or cut working hours and wages for the reasons mentioned above. The situation is even more difficult for this sector as many importing countries are increasingly demanding higher quality goods, lower prices, and compliance with environmental standards in line with sustainable development principles. This directly impacts the Vietnamese textile and garment industry, as most textile and garment businesses have traditionally relied on exports. This is not to mention that many global garment corporations are gradually applying advanced artificial intelligence technology to improve productivity, quality, and reduce labor costs.
What's even more concerning is that Vietnam's textile and garment industry, while accounting for the largest share of exports, is overly dependent on imported equipment and raw materials, relies heavily on unskilled labor, and has low labor productivity. To put it accurately, the majority of domestic garment businesses are primarily engaged in contract manufacturing. This is based on contracts between foreign and domestic companies. During this process, the client requires the contractor to ensure the design, delivery time, and other requirements. The biggest factor enabling these garment businesses to survive is the utilization of cheap labor in local areas.
Nowadays, in many rural areas, we see streams of people going in and out of garment factories, working in shifts. Among this large workforce, the majority are unskilled laborers; only about 18.24% have college or university degrees, and there is a shortage of engineers and skilled technicians. The textile and garment industry is predicted to face competition from countries with abundant labor, such as China, Bangladesh, Turkey, and India. This reality demands that textile and garment businesses in our country transform, moving beyond mere processing and striving for strong growth in every stage of production.
Article by: Nguyen Nguyen
Illustration photo: Thu Huyen
