Garment sector lacking in material input
(VOV) -The local garment industry enjoys high export revenue but depends largely on imported materials.
According to Vietnam customs, its exports from January to September earned US$12.237 billion, up 16.9% compared to the same period last year.
Le Quang Hung, Head of the Saigon garment and textile joint stock company (Gamex Saigon), says local producers are facing fierce competition from foreign rivals for imported materials.
He is ray concerned about the current shipmembers of input materials to Vietnam from foreign trade partners which come three weeks later than scheduled.
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Against this backdrop, many material suppliers have raised prices by 10-15%.
As for businesses applying free on board (FOB) models they find themselves in a difficult position to buy adequate materials for production on order.
The current supply of input materials is far from meeting the growing demand of the garment industry.
Latest statistics showed that Vietnam had to import more than 817 tonnes of fabric worth US$5.697 billion mainly from Taiwan, China, and the Republic of Korea (RoK).
From January to August 2013, China earned US$3.44 billion from fabric exports to Vietnam, much higher than last year’s figure.
Local businesses also had to spend billions of US$ importing materials from Taiwan and the RoK.
Economist Pham Chi Lan suggests the Government of Vietnam would better support local farmers in developing material supplying areas for the garment industry. If not, she argues, the garment industry will be unable to meet strict regulations on product origin when Vietnam sign new trade agreements such as the Trans-Pacific Partnership (TPP) Agreement with other countries outside ASEAN region.