Export Activities at Vinatex

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On that basic, the formation of Original designed Manufacturer – FOB chain model with large scale is very necessary for Vinatex and a breakthrough to rise competitiveness with domestic FDI textile and garment companies and textile and garment exporters in other countries such as China, Bangladesh, and India. Based on orientation mentioned above, Vinatex continues to establish Vinatex Northern Corporation and Vinatex Southern Corporation. They have large enough scale and core productive resource to conduct the Spinning – Knitting – Weaving – Dyeing – Finishing – Garment making supply chain for each regions to create value added and satisfy requirements of free trade agreements.

II/ RESULTS OF EXPORT ACTIVITIES OF VINATEX 2013 – 2016

The fact that after Vietnam joined World Trade Organization (WTO), Vietnam textile and garment industry had many opportunities to approach technology, information, service as well as better management experience, equality of tariff between member countries. Besides, Vietnam also have specific advantages such as political stability, productivity, low labor cost, satisfaction of variety of garment types…. Thus, Vietnam garment and textile is more and more affirming position and reputation in the world market and ranking in the top export countries. In 2013, the export turnover of Vietnam textile and garment industry was 20.4 billion USD and the one of Vinatex was about 1.8 billion USD.

In 2014, the context of world economy had growth, the export turnover of Vietnam textile and garment industry maintained a good growth rate, achieved 24 billion USD. This number rose 16% comparing with 2013. Vinatex’s export turnover was 2.16 billion USD, increased 12% compared to 2013. In major markets like America, Japan, EU, the growth of Vinatex’s export turnover was higher than growth rate of import in these markets. It confirmed Vinatex’s reputation and competitive capacity.

The status of textile and garment import in 2015 was not satisfactory in large markets. Apart from America, the growth rate of textile and garment import was nearly 8%. EU, Japan, Korea met difficulties with negative rate -1.25%, -8.5% and -2% respectively. However, the export turnover of Vietnam textile and garment industry in major markets achieved positive growth rate. In particular, the growth rate in America, EU, Japan, Korea were 11%, 2%, 6%, and 2 % respectively. In 2015, total export turnover of Vietnam textile and garment reached 26.8 billion USD, increased 8.5% compared to 2014. For Vinatex, in 2015, based on good market development, concentration on big markets like America, EU, Japan, Korea, the export turnover got 2.388 billion USD and this number raised 11% comparing with 2014. Some Vinatex’s members having large export scale and considerable growth in 2015 were Viettien Joint Stock Company (404 million USD, increased 10% comparing with 2014), Hung Yen Garment Company (84 million USD, increased 16% comparing with 2014), Hoa Tho Textile – Garment Joint Stock Corporation (145 million USD, increased 16% comparing with 2014), Viet Thang Corporation (45 million USD, increased 11% comparing with 2014).

2016 was a bleak year of Vietnam textile and garment industry. This is because of the lowest growth rate in 10 recent years, the decline of export turnover and the risk of unapproved of Trans-Pacific Partnership. For this reason, export value of textile and garment industry was 28.3 billion USD and this amount only increased slightly 5.7% comparing with 2015. The export turnover of Vinatex in 2016 was 2.511 billion USD. Vinatex’s products has to compete intensely with competitors from China, India, Pakistan and Bangladesh.

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Chart 2: Export turnover of textile and garment 2013 – 2016

(Source: Vinatex’s annual report, Ministry of industry and trade)

The major exporting markets of Vinatex included America, Europe, Korea and Japan. More than 90% Vinatex’s products were used for exporting and focusing mainly in major markets. In 2017, Vinatex continues to develop production, step up to develop major markets as well as expand potential markets such as Russia, Middle East.

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Picture 1: The major international market of Vinatex

To take more export orders and set up professional production and business activities, the Vietnam Textile and Garment Group (Vinatex) has developed Vinatex International Joint Stock Company (VTJ) and the Supply Chain Development Center (SCDC). The two businesses would combine and support member companies of Vinatex to exploit and expand the export market, seek customers and develop a supply chain from material to finished products. In short term, SCDC had 8 frequent customers about garment and has developed 20 customers in America, Europe, Korea and Japan. SCDC had 10 frequent customers and has developed 30 customers in Chile, China, Thailand, Malaysia and Korea. These initial results confirmed Vinatex’s correct direction in connecting member companies, forming garment and textile supply chain. VTJ had 10 big customers focusing on American customers with large orders and moderate quality such as JC Penny, Walmart, GAP, OneJeans, Perry Ellis, and Japanese customers like Nomura, Toyobo. After a period of operation, VTJ restructured items, focused mainly on high value items such as suit, jacket. In addition, they also continued to maintain traditional customers like Aero, Soma.

III/ PROCEDURES TO EXPORT AT VINATEX

In order to export textile and garment products, first of all, Vinatex has to select export market. Research of markets and applying for a quota of that market are first thing when Vietnamese enterprises want to take part in international market. Through research of markets, Vinatex will have suitable business strategies as well as adaptable plans to new market. In addition to that, market research step provides information about market such as scale, framework, factors affect market, shift of market as well as consumers’ habit, buying manner, factors affect consumers’ behavior. The market research also helps to show that the market quota or non-quota. If that market does not have a quota, Vinatex has to apply quota from the Department of Commerce. If quota is not enough, the company can do export by entrusting to another company. When researching the market, Vinatex must get information about the market capacity, competition conditions, tastes and product styles. The company also researches its product materials and costs for avoiding pressuring prices while