Nghe An: A series of garment factories operate at a low level, cut labor

Garment factories in Dien Chau district are currently facing a shortage of orders. Photo: Mai Giang

"Hungry" for orders

Representative of Nam Thuan Garment Factory in Dien My commune, districtDien Chausaid: The factory has been operating since 2019 with an investment capital of over 300 billion VND; at its peak, there were 1,200 workers, mainly processing clothes for European countries. From the end of 2022 until now, due to the general difficulties of the textile industry, the unit had to cut the workforce to 300 workers, each worker only working 15-16 days/month.

Every month, this company has to compensate for a loss of 1.5 billion VND to pay salaries and social insurance for workers. Currently, the company has to find new markets, possibly orders with lower value, to maintain production pace and wait for opportunities to have orders in the future.

Meanwhile, at the Garment Factory in Nghia Long Commune, Nghia Dan District, which has been operating since 2017, at its peak there were nearly 1,000 workers, including small establishments operating in Dien Chau, Quynh Luu districts and Ha Tinh province. The unit mainly processes clothes for the Russian market, but since the conflict between Russia and Ukraine, there have been no orders and the unit has had to operate at a low level. Both the domestic and export markets are facing difficulties; up to the end of the first quarter of 2023, there have been no positive signs.

From the beginning of 2023 to now,Garment factoryin Nghia Long commune had to cut down to over 600 workers. Not to mention, the unit also had to face a series of other difficulties such as constantly fluctuating gasoline and oil prices, high logistics service costs, and increased bank interest rates, causing the company's production costs to increase by 5-10%.

An Hung Garment Factory in Cong Thanh Commune, Yen Thanh District. Photo: Van Truong

At An Hung Garment Factory in Cong Thanh Commune, Yen Thanh District, it was built on a fairly large scale, with an investment of over 600 billion VND, put into operation from 2021, mainly exporting orders to the US, Canada, Australia...

At its peak, there were over 2,000 workers, most of whom had to work overtime; however, since the end of 2022, European markets have declined due to inflation, declining consumer spending, and especially large inventories of garments, so they have not placed orders. Faced with this situation, the factory has had to cut its workforce. It is expected that by the end of April, when the situation improves, the factory will continue to recruit workers again.

Textile and garment enterprises respond to difficulties

A representative of An Hung Garment Factory (Yen Thanh) said: "To cope with the difficult situation, in addition to having to cut labor, the unit is having to accept some orders with low profits; at the same time, we continue to look for new markets. Now, our garment business must also try our best to hold on until the second quarter with the hope that the world economy will have brighter prospects."

Some garment factories in Dien Chau district shared: The most important thing for businesses is that competent authorities, banking and finance sectors should continue to have policies to support loans or reduce and extend taxes to share difficulties with businesses.

Dien Chau district currently has 12 garment and footwear factories and establishments, creating jobs for over 15,000 workers. In the general difficult conditions of the garment industry, most of Dien Chau's garment factories have also had to cut down on labor. A representative of Dien Chau District People's Committee added: The district will review garment and footwear factories in the area to grasp the difficult situation and from there have solutions to support and accompany garment enterprises.

To cope with difficulties, Dien Chau district encouragestextile industryMake the most of orders, including short-term orders, to ensure production maintenance and employee retention. Continue to study the possibility of converting products according to market demand and always have the best production force ready to seize opportunities when the market shows signs of recovery.

Mr. Nguyen Van Hiep - Head of the Department of Industrial Management (Department of Industry and Trade) also said: Textile and garment is one of the sectors with large export turnover of Nghe An. The whole province has more than 50 factories in operation, the province's textile and garment products are present in about 20 countries and territories around the world. Most of the factories currently mainly produce according to the outsourcing model for foreign customers. In 2022, there were times when garment factories in Nghe An had to work overtime. However, from the beginning of 2023 until now, orders for the textile and garment industry have decreased. Currently, only a few businesses have secured orders, the majority aresingle shortageWith the number of orders falling by 25-30%, many factories have had to operate at a low level due to a lack of orders. This situation has greatly affected the income and lives of hundreds of thousands of workers.

The difficult situation in textile and garment exports is forecast to continue. The Department of Industry and Trade recommends that businesses in this sector must closely monitor the market situation and find proactive and flexible solutions. In particular, priority should be given to finding orders from new markets, actively diversifying products, improving management capacity to save costs and increase product quality.

Along with that, it is extremely necessary to make the most of orders, including short orders, to ensure production maintenance and find ways to retain workers, avoiding labor shortages when orders recover.