The Astonishing Revenue of Vietnam’s Leading Textile Enterprise

Garmex Saigon JSC (GMC) has released its consolidated mid-year financial report for the first six months of 2024, ending June 30, 2024.

Notably, the financial report shows that Garmex’s net revenue from sales and services reached only VND 358.5 million, a significant drop of 22.6 times compared to the same period last year. This includes over VND 229 billion in sales and service revenue, with the remaining coming from other income sources, including the sale of liquidated used machines.

This means that, on average, the company recorded less than VND 2 million in daily revenue. This is surprising, as Garmex is one of Vietnam’s leading garment manufacturers. During its golden age, Garmex achieved record revenue of over VND 2,000 billion per year, equivalent to VND 5.5 billion per day.

With no income from production and business activities, GMC relied on financial activities and other income sources. Financial activity revenue reached over VND 2.5 billion, including VND 2 billion in interest from deposits and loans. The remaining VND 515 million came from foreign exchange rate differences.

The company also recorded nearly VND 8.7 billion from the sale and disposal of fixed assets and VND 167 million from other income. Overall, other income sources contributed VND 8.844 billion to the company, a 143-fold increase compared to the previous year.

In the first six months of the year, the company recorded a profit of over VND 755 million. This is a significant improvement compared to the loss of over VND 33 billion in the same period last year. However, it still falls short of the company’s plans, which targeted VND 50.5 billion in revenue and VND 40 billion in pre-tax profits.

The sharp decline in Garmex’s revenue is not surprising. Although the company is a well-known garment manufacturer in Ho Chi Minh City with over 20 years of experience and partnerships with many famous international brands, its operations have faced challenges since the pandemic. The number of orders received has decreased, and in 2022, the company’s revenue plummeted by 93% compared to the previous year, resulting in its first recorded loss.

Additionally, the company has been impacted by the sudden reduction in production by its partner, Gilimex, for Amazon Robotics LLC, further exacerbating the difficult situation. Garmex Saigon has temporarily halted its textile production since May 2023 and is currently mainly engaged in asset preservation, processing, and liquidation of long-term inventory of raw materials and supplies.

As of December 31, 2023, the company’s total workforce stood at 35 employees, a reduction of 2,066 workers compared to 2022. In the last two years, approximately 3,775 employees have lost their jobs at Garmex Saigon. This reduction in labor is one of the main measures the company has taken to mitigate losses.

During the annual meeting at the end of June, the company’s leadership shared that they are not committed to the garment industry and will only resume operations if conditions become favorable.

Currently, Garmex Saigon is also involved in the real estate sector through its increased capital contribution to Phu My Company, which is developing two commercial housing projects: Phu My and Tan My. In addition, Garmex has expanded into pharmaceutical retail and plans to venture into logistics soon.