At the production line of Dai Tay Duong Company in Dong An industrial park, Thuan An town.
Vietnam basically ended negotiations of free trade agreement (FTA) and will officially sign the FTA in early 2015. Especially, the ASEAN Economic Community (AEC) founded in 2015 will form up a new playground for ASEAN nations, facilitating Vietnamese goods’ export to ASEAN. These are favorable conditions for apparel enterprises of Vietnam in general and of Binh Duong in particular to develop production and market expansion.
Many opportunities
Le Hong Phoa, chairman of Binh Duong Garment and Textile Association, director of Binh Duong Co.Ltd. said that Vietnam and the Customs Union of Belarus, Kazakhstan, and Russia just ended a FTA negotiation to prepare for signing in the early 2015. This will give more opportunities for Vietnamese apparel industry in general and Binh Duong apparel in particular to penetrate into three markets.
Besides, the Trans-Pacific Partnership Agreement (TPP) is on the final stage with good prospects. It is hoped that negotiations of TPP will be successfully ended in this year because the Trans-Pacific Partnership (TPP) agreement has great significance for Vietnamese enterprises in increasing access to markets and promoting exports, especially products for the US market. In addition, the TPP will allow Vietnam to export apparel to the US at a 0% tariff rate.
Vo Van Minh, vice director of Dai Tay Duong Company in Dong An industrial park, Thuan An town said that a free trade agreement (FTA) inked by Vietnam and the European Union will cut the tariffs of 90% of Vietnamese goods down to 0%. Such a move will be the key to boosting Vietnamese exports to the EU market where the 27 member countries gross a total population of 500 million people. Meanwhile, the EU is one of Vietnam’s import markets of commodities, especially apparel and footwear sectors. “Our main product is jeans, being exported mainly to Germany. Once the agreement is inked, clients in Germany will not pay tax and they can increase orders for us. Besides, the TPP agreement will help Vietnamese apparel products enjoy o% tariff in the US market. This will bring many benefits for Vietnamese enterprises. At present, one third of our products are exported to the US, we and other enterprises are looking forward to enjoying benefits from this agreement”, Minh said.
Pham Tuan Xo, chairman of Binh Duong Export Association, director of ICD TBS said that once FTA, TPP are inked, Vietnamese enterprises in general and Binh Duong companies in particular will enjoy many opportunities of export, contributing to spur production and business.
Economic experts assessed that among staple export items, apparel product reaches a gigantic breakthrough and growth, thanks to FTA agreement under negotiations and preparation of signing. This is also a big attraction for importers from other nations to transfer orders to Vietnam.
Increase on orders
Nguyen Van Quang, head of the provincial department of Trade and Industry’s Industry Office said that Binh Duong’s export turnover in 2014 was estimated at US$2,30bil, an 18.1% increase against 2013, accounting for 11.3% of the provincial export revenue. At present, export revenue of apparel item continues to be maintained at high growth. Owing to impact of TPP negotiations, the number of export orders in 2014 rose fairly, many big enterprises gained stable contracts till the end of the first quarter of 2015.
According to Le Hong Phoa, most of the enterprises in Binh Duong obtain stable orders. Most of these companies enjoy contracts till the end of the second quarter of this year. Enterprises’ revenue in this year will increase from 5-10% compared with the past year.
Phoa added that Binh Duong Co.Ltd’s orders will last till the end of 2015. The company’s products are penetrated into middle and high-grade markets, so clients highly appreciate their quality and service. The company intends to win about US$5mil in this month. In 2015, with traditional markets such as the US, EU and Japan plus available orders, the company strives to surpass about 5% in its set plans.
Meanwhile, Vo Van Minh added that his company’s orders are signed till the end of this year. At present, the company exports as many as 60,000 products per month. The company’s revenue is estimated at more than US$2mil in this year.
Increasing competitive capacity
In order to take advantage of opportunities from these agreements, there are many challenges requiring enterprises to improve competitive capacity. Le Hong Phoa said that enterprises involving in apparel industry should create breakthroughs to win higher values on the world market. One of challenges is that retailers, importers and suppliers must meet legal regulations of import nations. These regulations include quality of product, chemical management, social responsibility, environmental management and more.
To take advantage of these opportunities, experts said that apparel industry should rise rate of domestication, form up perfect chains of supply from design, materials, distribution and responsible community to improve competition. Moreover, enterprises should focus on luring and enhancing quality of human resources.
Reported by P.LE – Translated by A.C
