Vietnam must diversify its textile and garment export markets, especially because it relies heavily on the US market, said industry insiders and experts during a recent conference in Hà Nội.

 

The Southeast Asian country's textile and garment industry has been recording impressive growth figures, with export turnover projected to reach US$44 billion this year, an 11.3 per cent increase compared to the previous year.

 

That is forecast to reach $47-48 billion by the end of next year, affirming Vietnam's position as one of the world's top producers and exporters, second only to China and Bangladesh.

 

But the industry heavily relies on the US, its largest customer which accounts for around 38 per cent of Vietnam's textile and garment exports.

 

While it has been a testament to how far the country has improved its position in the global supply chain, it leaves the industry vulnerable to trade policy shifts under the upcoming administration of Donald Trump.

 

The US could impose heavy tariffs on Chinese products in comparison to Vietnamese products, giving Việt Nam an opportunity to win customers and expand market share in the US. However, it will take some time before the new administration announces its tariff policies.

 

President of the Vietnam Textile and Apparel Association (VITAS), Vũ Đức Giang, said diversification is key to reducing risks and maintaining stability in times of uncertainty.

 

"We must promote diversification by diversifying export markets, products, and customers," he said.

 

The industry has been strengthening its efforts in diversifying by actively seeking out new buyers in ASEAN, Canada and Russia in recent years. Another focus has been product diversification, notably the shift to the production of higher-value items including fashion and smart textiles. Long-term partnerships have been formed with partners around the world, particularly those who share the same environmental and social goals. 

 

It has supported the industry in finding its footing in global supply chains and attracting large investments from China, Japan, Singapore and South Korea.

 

According to VITAS, the industry is currently home to 3,500 foreign-direct-investment (FDI) projects valued at $37 billion, accounting for 65 per cent of its entire export turnover. They have been instrumental in creating employment and encouraging technological development.

 

A prime example is the DTY yarn, fabric and towel manufacturing plant of Sanbang, a Singapore-based company in Nam Định, expected to be operational by the end of this year. With an investment of $30 million, this plant could create hundreds of jobs for the local communities.

 

Other large projects underway include a $203 million fabric dyeing plant invested by Top Textiles, a subsidiary of Toray Group from Japan, and ReGal Vietnam Textile Co. Ltd., which has a $20 million investment from the Hong Kong-based ReGal Group. 

 

The industry has been adopting higher international standards in production as major markets such as the US and the EU are tightening their sustainability and digitalisation requirements, forcing companies in Việt Nam to invest in new technologies.

 

CEO of the Đồng Tiến Joint Stock Company, Nguyễn Văn Hoàng, noted that Environmental, social, and governance (ESG) have been shaping the international markets with stricter rules, demanding companies to upgrade to greener technologies, invest in human resources and build strong brands.

 

Vice President of Jack Technology, Jimmy Qiu said Việt Nam has successfully convinced international importers with its fast adaptability to smart manufacturing and green technology. This not only boosts productivity but also sets Vietnamese products apart in the global market.

 

The country, however, must find ways to reduce its over-reliance on imported raw materials by establishing its own supply chains, which could help mitigate risks during periods of market fluctuations. VNS

 

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