Vietnam's Vinatex sets conservative goals in 2023 business plan
The Vietnam National Textile and Garment Group (Vinatex), whose consolidated revenue and profit rose by 15 per cent and 14.6 per cent year-on-year respectively in 2022, recently announced its business plan for 2023 with many conservative goals. This year is anticipated to be a challenging year for export-oriented sectors, particularly textiles.
Since October 2022, the major export markets for Vietnam's textiles and apparel have shown signs of severe deterioration.
"In 2022, as the global economy swung in a complex manner, the textile and apparel business faced several obstacles in terms of consumer demand, and beginning in the third quarter, orders decreased precipitously," General Director of Vinatex Cao Huu Hieu was quoted as saying by a Vietnamese media outlet.
"However, Vinatex still accomplished its goals with expected consolidated sales of $830 million, an increase of 15 per cent year-on-year. The anticipated consolidated profit reached $46 million, up 14.6 per cent," Hieu said.
|Vinatex sets conservative goals in the 2023 business plan.|
The Vietnam Textile and Apparel Association (VITAS) foresees two growth scenarios this year, with the optimistic scenario predicting a turnover of $47-48 billion and the pessimistic one anticipating $45-46 billion.
In 2022, the entire industry had a total export turnover of more than $44 billion.
The industry's troubles include low demand for yarn and its low selling price, large yarn stocks, rising storage costs, congested working capital flows and intense price competition for orders. In addition, most units are under-loaded by 35 to 50 per cent.
A decline in global buying power is anticipated to lead to pressures on the country’s clothing sector to cut orders by an average of 25 to 27 per cent this year.
Since 2022 began, the total labour force of the industry has decreased by 5-7 per cent and that trend is anticipated to continue this year as the status of orders has not been restored along with intense competition from other industries.
General solutions identified in Vinatex's 2023 business plan include forming a package knitting production chain by choosing the most suitable and essential items and completing the production chain progressively.
It plans to invest in green growth, raise investments in innovative technologies, save energy, limit the usage of chemicals, reduce emissions, utilise renewable energy sources, raise manufacturing of recycled items and aim for a digital transformation for key tasks.