Flexibly adapting to the 'new normal', the textile industry recovers strongly

Date posted: 31/12/2021

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Despite the heavy impacts from the fourth wave of the Covid-19 epidemic, Vietnam's textile and garment industry has actively and flexibly adapted to the 'new normal', maintaining an impressive growth momentum in 2021. .

The textile and garment industry experienced impressive growth, despite the complicated developments of the Covid-19 pandemic. (Source: VNA)

Soon to "reach the finish line" of $ 39 billion

The textile and garment industry has had an impressive and strong recovery with the total export turnover of the whole industry reaching 39 billion USD, up 11.2% compared to 2020 and 0.3% compared to 2019 (before the epidemic). . In which, garments reached USD 28.9 billion, up 4% compared to 2020; Fiber, yarn is expected to reach 5.5 billion, up over 49%, mainly exported to China...

Particularly in November, the General Department of Customs announced that textile and garment export turnover reached 3.04 billion USD, up 15.2%, equivalent to 401 million USD increase compared to the previous month.

After Vietnam changed its Covid-19 epidemic prevention and control policy from Zero Covid to "living with Covid" - both safely and flexibly adapting, effectively controlling the Covid-19 epidemic while recovering and developing the economy, Economically, businesses, especially the textile and garment industry, have overcome difficulties and quickly caught up with the new situation.

In an interview on the sidelines of the 31st Diplomatic Conference (December 10), General Director of Garment 10 Corporation Than Duc Viet affirmed that vaccine diplomacy was implemented very quickly and drastically, which helped May 10 with 12,000 employees to stabilize production and business. By the end of 2021, May 10 will achieve a revenue of over VND 3,400 billion, up 17% over the same period in 2020.

According to Mr. Than Duc Viet, in 2020, the Covid-19 pandemic has greatly affected the Garment 10 Corporation in particular and the textile industry in general when facing the risk of supply disruption, then facing a crisis because disrupted import demand for textiles and garments, leading to serious damage to the export revenue of textiles.

In 2021, the effect becomes more pronounced. Although some export markets of May 10 such as the US, Europe, and Japan have recovered because other countries have controlled Covid-19 well, businesses have been greatly affected by the outbreak in Vietnam. , especially the fourth epidemic has disrupted the production process of the Corporation.

"However, the Government's Resolution 128 on safely adapting, flexibly and effectively controlling the Covid-19 epidemic was also born in a very timely manner, helping our business community to immediately implement the following activities. Especially during the fourth quarter, May 10 increased all production activities to compensate for orders that were delayed in delivery in the third quarter and additional orders in the fourth quarter.

By the end of 2021, May 10 will reach sales of over VND 3,400 billion, exceeding 2019 when there was no Covid-19 epidemic. If we count only apparel revenue, due to the fact that we have revenue from mask production, only in 2021, we will grow by 17% compared to the same period in 2020", Mr. Viet excitedly shared.

A representative of TNG Investment and Trading Joint Stock Company said that net revenue in November 2021 reached VND 434 billion, up 37% over the same period in 2020. Deducting expenses and taxes, the Company recorded profit after tax reached 20.7 billion dong, a sharp increase compared to the profit of 7.9 billion dong in the same period last year. Gross profit margin also improved from 13% to 16%.

Generally, in the first 11 months of the year, TNG's revenue reached nearly VND 5,000 billion and profit after tax reached nearly VND 214 billion, up 18% and 38% respectively over the same period in 2020. Compared to the business plan with revenue. reached VND 4,798 billion and profit after tax reached VND 175 billion, the Company exceeded 4.2% and 22.3% of the year plan, respectively.

Three scenarios for 2022

At the 2021 summary conference and the symposium on Sustainable development of Vietnam's textile and garment industry in the context of the Covid-19 epidemic on December 17, Mr. Truong Van Cam, Vice President and General Secretary of the Vietnam Textile and Apparel Association According to VITAS, in 2022, it is forecasted that the international and domestic situation will have advantages, opportunities and intertwined difficulties and challenges. The Covid-19 epidemic is forecast to continue to develop complicatedly; World economic growth is not uniform.

Conference to summarize the textile and garment industry in 2021, on December 17 at the bridge points. (Source: Youth)

In the country, experience, capacity and ability to cope with the epidemic continued to be improved, but the resilience and resources of the State, businesses and people decreased. The risk of slow economic recovery and growth slowdown is still hidden if the epidemic cannot be controlled in a fundamental way to reopen the economy; increased inflation risks; Natural disasters and climate change are always potential risks.

Accordingly, the Vietnam Textile and Apparel Association offers three scenarios for the growth of the textile and garment industry in 2022. Specifically, if the epidemic situation is basically controlled in the first quarter of 2022, the most positive scenario is, export turnover will reach 41.5-42.5 billion USD; the average scenario will reach 40-41 billion USD, if the epidemic situation is still complicated until the middle of 2022; The least positive scenario is that the epidemic situation is still complicated and lasts until the end of 2022, the export turnover of the industry is expected to reach only $38-39 billion.

Mr. Truong Van Cam suggested that the State should continue to implement the vaccine strategy as a fundamental solution for businesses to recover and develop in the new normal; It is necessary to expand fiscal and monetary policies, amend inadequate regulations, reduce the cost burden on businesses, and remove the limit on overtime work per year to 400 hours.

Along with that, the textile and garment industry hopes that the Government will soon approve the development strategy of Vietnam's textile and apparel industry to 2030, with a vision to 2035 so that the industry can be self-sufficient in raw materials, meeting the rules of origin. of free trade agreements, applying 4.0 technology to modernize production, digital transformation, and branding.

In 2022, the International Monetary Fund (IMF) and the World Bank (World Bank) forecast global GDP growth to reach 4.9%. Particularly, the world demand for textile products will return to the level of 2019, reaching about 740 billion USD.

The research team of Vietcombank Securities Company (VCBS) said that free trade agreements such as the EU-Vietnam Free Trade Agreement (EVFTA, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (EVFTA) CPTPP) will continue to actively support Vietnam's textile and garment exports, besides, Vietnam's textile and garment market share in the US and EU is still expanding.

The increasing consumption index will bring great opportunities for the textile and garment industry, especially when the coverage of Covid-19 vaccines in key markets such as the US and EU is increasing. In particular, Covid-19 has changed a number of industry trends, including the tendency to shift the world's textile and garment supply out of China, and Vietnam is one of the destinations for importers.

Van Chi

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