Alongside the resurgence of export opportunities, wood and textile export businesses are making great efforts to stabilize and sustain this growth.
A positive signal of recovery
According to recent information about the activities of the Ho Chi Minh City Department of Industry and Trade in the first quarter of 2024, Mr. Bui Ta Hoang Vu, Director of the Department of Industry and Trade, announced that many companies in the wood and textile industries have received orders until mid-year. In particular, some companies have secured stable orders until the end of the year.
Mr. Tran Ngoc Liem, Director of the Vietnam Chamber of Commerce and Industry (VCCI) – Ho Chi Minh City Branch, also stated that wood exports are growing rapidly with many positive signs of recovery. Wood and wood products exports in January 2024 reached nearly $1.5 billion, an increase of over 70% compared to the same period last year.
Emerging markets with strong export growth include India, up 288%; Peru, up 111%; Turkey, up 90%; Norway, up 52%; Cambodia, up 45%; and China, up 7%…
After a period of contraction and even closures due to lack of orders, some companies already have export contracts that cover the entire year of 2024. Mr. Le Ha Trong Chau, representative of Duc Thien Co., Ltd., said that the company’s export orders are secured until the end of June 2024. The company mainly exports wood products to the United States, with 10 to 15 containers per month and revenue ranging from $1 to $1.2 million.
Minh Phat 2 Co., Ltd. has export orders until the end of the first quarter of 2024. Saigon Sadaco Development and Investment Corporation is currently stabilizing traditional export orders to the United States and Europe.
According to Mr. Tran Quoc Manh, Deputy Chairman of the Vietnam Handicraft and Art Association, inflation in the two important markets of the United States and Europe has decreased, and supply and demand have balanced. It is highly likely that these two markets will accelerate strong imports from the third quarter of 2024. In 2024, the wood industry aims to achieve $17.5 billion in wood and wood product exports.
 Textile businesses are striving to accelerate to restore export growth. Photo: THANH NHAN |
For the textile industry, thanks to stable orders and customers, some companies have achieved large profits in the first month of 2024. For example, TNG Investment and Trading Corporation recorded post-tax profits of over VND 15 billion in January 2024, triple the figure from the same period last year. TNG has signed export orders for various clothing brands such as Decathlon, Columbia, The Children’s Place, Sportmaster, Costco, Nike, and Adidas since the beginning of 2024.
Mr. Pham Xuan Hong, Chairman of Saigon 3 Garment Joint Stock Company and Chairman of the Ho Chi Minh City Embroidery and Knitting Textile Association (AGTEX), confirmed that some textile companies in Ho Chi Minh City have orders until the end of the year. “After Tet, companies are making maximum efforts to secure orders to ensure employment for workers and seek new orders and customers. Hopefully, the situation will be even more positive in the second quarter of 2024,” expressed Mr. Hong.
Mr. Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), reported that in the first two months of 2024, textile exports to markets such as the United States, Japan, South Korea, Africa, and the Middle East showed better growth; however, the growth in the European market was modest.
“Purchasing power in many countries is showing signs of recovery, and inventory levels are decreasing. In addition, import taxes in some markets have reduced according to the new generation of free trade agreements (FTAs),” explained Mr. Giang.
Facing the increasing trend of returning orders and the prospect of global economic recovery, the textile industry has set a goal to strive for a total export value of $44 billion in 2024, a 9.2% increase compared to 2023.
Flexibility in overcoming challenges
According to companies, although the signals at the beginning of the year are optimistic, they have not yet reached sustainable levels. Many companies are striving to expand to new markets and diversify sales channels to meet the annual targets.
“Exports of wood products are doing well, but the market still presents many challenges. Orders are returning, but many customers require more samples, higher quality, smaller orders, and at the same time, prices are not high. Customers themselves are also exploring new markets and finding products suitable for target markets,” analyzed Mr. Tran Quoc Manh. According to him, companies need to be flexible in adapting to new situations and have appropriate production and business strategies.
Based on his company’s experience, Mr. Dien Quang Hiep, General Director of Minh Phat 2 Co., Ltd., believes that companies should focus on main markets such as the United States, Europe, Japan, South Korea, and emerging markets like China. “Vietnam and the United States have signed a comprehensive strategic partnership agreement. Companies should take advantage of this opportunity to access American importers,” Mr. Hiep suggested.
Mr. Vu Duc Giang, Chairman of VITAS, predicted that textile exports will have good prospects this year thanks to three main factors: the 16 FTAs that Vietnam has signed, Vietnam’s self-sufficient supply of certain materials, and diversification of markets, customers, and products. Before 2021-2022, Vietnam’s textile industry exported to 82 markets. By 2023, this number increased to 104, and this year, 2-3 additional niche markets could be explored.
“Companies are less dependent on a few large customers and are exploring smaller customers. In addition, companies produce a variety of different products instead of specialization as before,” cited Mr. Vu Duc Giang.
From the perspective of state management agencies, Mr. Le Hoang Tai, Deputy Director of the Trade Promotion Agency of the Ministry of Industry and Trade, observed that creating channels for companies to access orders is crucial at this stage. According to him, manufacturers and supply chains continue to choose Vietnam as a production and ordering location, demonstrating Vietnam’s strong position in the textile industry.
Mr. Tai believes that opportunities will increase for companies that can leverage all advantages to restore export capacity, thoroughly exploit distribution and supply chains, diversify orders, and seek smaller orders.
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A strong determination is needed According to Mr. Le Hoang Tai, many international textile manufacturers have expanded their activities to Vietnam, and Vietnam’s membership in 16 FTAs provides a positive foundation for the development of the textile industry in the future. |
Thanh Nhan – Nguyen Hai
