On the afternoon of September 25, as part of VTG 2024, VCOSA successfully hosted a specialized seminar titled “Vietnam’s Textile Industry: A focus on Sustainability, Innovation, and Global Competitiveness”. The seminar was honored to welcome enthusiastic participation and support from numerous businesses, close partners, and visitors from around the world, alongside industry experts sharing unique insights on various topics.
In the first eight months of 2024, Vietnam’s textile and garment exports reached USD 29.3 billion, an increase of 7.16% compared to the same period last year, with the U.S. being the largest market (USD 8.93 billion). While there has been a strong recovery in order demand, the industry still faces challenges from high production costs and requirements from importing markets. Businesses have adapted their strategies to maintain production and enhance value-added services.
Moreover, the potential shift of orders from China to Vietnam and decreasing interest rates present new growth opportunities. Vietnam currently has 16 effective FTAs that facilitate exports. Companies are also transitioning to green production and adopting sustainable standards. With positive signals, the goal of reaching USD 44 billion in exports by 2024 is entirely feasible, and businesses need to improve product quality to maintain competitiveness in the international market. This was the content shared by the Vietnam Cotton and Spinning Association (VCOSA) on the topic “Current Challenges and Opportunities for Vietnam’s Textile Industry and Future Plans,” presented by Ms. Duong Thuy Linh, VCOSA Vice Secretary-General and Head of External Relations.
Ms. Duong Thuy Linh Presented at the Seminar “Vietnam’s Textile Industry: A focus on Sustainability, Innovation, and Global Competitiveness” (VTG 2024)
During the QnA session, Ms. Linh addressed several questions of interest from attendees, specifically as follows:
Question: How does the rising labor cost in Vietnam affect the competitiveness of the country’s textile and garment sector?
VCOSA: Ms. Duong Thuy Linh shared that, according to the International Labour Organization (ILO), the average monthly wage for workers in Vietnam’s textile and garment industry is approximately USD 300, which is currently higher than the global average, double that of India, and three times that of Bangladesh. Additionally, starting from July 1, 2024, the regional minimum wage for Vietnamese workers will also be adjusted upward by about 6%. This creates pressure on businesses operating in the sector and on foreign direct investors considering entering Vietnam’s textile industry, as labor costs are no longer relatively cheaper compared to competitors. However, according to the Deputy Secretary-General of VCOSA, it is time for the Vietnamese textile industry to focus on leveraging other advantages beyond labor costs. She suggested that businesses should concentrate on developing production processes, enhancing productivity, and improving product quality, so that the competitive advantage of Vietnamese textiles in the future will be quality. This is also a necessary effort for deeper integration into the global value chain, mastering high value-added production processes, and thereby affirming the capacity of Vietnam’s textile industry in the new development phase.
Question: How is the industry coping with the increasing demand for transparency and traceability in the supply chain?
VCOSA: Ms. Duong Thuy Linh shared her personal perspective from two angles. First, from the viewpoint of an expert in the cotton-spinning industry, she noted that ensuring transparency and traceability in the supply chains of Vietnamese spinners is relatively straightforward. Since Vietnam imports 100% of its cotton, businesses typically choose reputable suppliers from the U.S., Brazil, or Australia, where bales of cotton come with strict traceability codes that track and identify the origin and journey of the cotton from cultivation to production, distribution, and final products. Therefore, when the demands for transparency and traceability increase, spinners can proactively meet these requirements.
However, from the second perspective of the textile industry, Ms. Linh believes that textile businesses face more challenges due to the final product’s manufacturing process requiring various input materials. The selection of suppliers is sometimes determined by brands, making it difficult for textile companies to take the initiative in traceability and provide documentation to demonstrate transparency throughout the entire production process. She proposed that textile companies could take the initiative in requiring traceability for each type of input material and choose reputable partners and suppliers to be ready to meet transparency or traceability demands.
In the next segment of the seminar, attendees heard presentations from three experts: Ms. Nguyen Ngoc Kim Oanh (Saitex), Mr. Vo Thanh Phuoc (Faslink), and Dr. Colin Luk (Vericott) on practical topics related to the innovation of Vietnam’s textile industry.
For detailed news about the seminar, please visit the website vcosa.vn.
Once again, VCOSA congratulates the success of VTG 2024 and hopes to continue providing expert insights through specialized seminars alongside VTG in future editions. Additionally, VCOSA is committed to organizing beneficial and meaningful activities to support the sustainable development of the textile industry in general, and cotton-fiber specifically.
Sincerely,
VCOSA.