Vietnam : Textile and garment industry undergoes restructuring

The Nam Dinh Textile & Garment JSC has undergone ‘major surgery’. The number of workers has been cut from 18,000 to 4,000. However, the remaining workers’ output equals that of 18,000 workers in the past.

Vietnam MOIT is going to submit to the government a plan to restructure industry in general in 2016-2020, which includes the textile & garment industry.

The plan shows several targets such as repositioning enterprises geographically and shutting down factories with outdated technologies, but it does not include implementation measures.

There are three ways to improve productivity in the textile & garment industry. 

First, using few workers and high-productivity machines. Second, shutting down unprofitable enterprises and reducing the number of enterprises consuming a lot of power. Third, adjusting the product structure to choose enterprises with higher added value.

Truong Duy Hung, director of MOIT’s planning department, the compiler of the plan, believes the weak point of textile industry is the lack of input materials. 

Analysts say that if Vietnamese enterprises make input materials, their products would be able to replace Chinese products and can compete with Chinese products in price. 

In current conditions, however, it is easier and faster to seek input materials from China than domestic sources. This is because China organizes large-scale production and  always has large stocks, while Vietnam only makes products to order.

Vietnam earned $6.84 billion from garment and textile exports in the first quarter of this year, 11.2 percent more than in the same period last year.




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