A fresh wave of COVID-19 may worsen the situation of Vietnam’s textile and footwear industries, still reeling from the impact of the first. According to the ministry of industry and trade, apparel production in July rose by 13.2 per cent over June but was nearly 5 per cent down year on year. Exports of textiles and footwear are down by 21 per cent and 8 per cent respectively.
TNG Investment and Trading JSC., which manufactures clothing and footwear, reported first half revenues and net profit were down by 10 per cent and 29 per cent at VND1.84 trillion ($79.3 million) and VND66 billion ($2.84 million) respectively.
The Vietnam National Textile and Garment Group (Vinatex) reported a 15 per cent fall in revenues and 25 per cent decrease in profits despite partially switching to manufacturing face masks and protective clothing and retaining all its workers.
The situation was better than predicted, according to Vinatex’s deputy general director, Cao Huu Hieu, who said the company had anticipated declines of 30 per cent in revenues and 50 per cent in profits. Song Hong Garment JSC’s profit had fallen by 44 per cent to just VND122 billion ($5.26 million), according to a report in a Vietnamese newspaper.
While the switch to making face masks and protective clothing was considered a lifesaver for many garment firms in the first half of the year, a global oversupply of these products have caused prices to plummet. Firms such as TNG have even stopped manufacturing masks and started focusing on high-value products.
With many countries, including Vietnam, being hit by a new wave of Covid-19, getting orders has also become a difficult task for the majority of garment firms. Many did not receive a single order for high-value products in the second half of the year, according to the ministry.
Another challenge facing the garment industry is the fact that consumer behaviors have changed dramatically due to the pandemic. The top priorities for consumers now are medicines, food and savings.