Afresh 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 percent over June but was nearly 5 percent down year on year. Exports of textiles and footwear are down by 21 percent and 8 percent respectively.
TNG Investment and Trading JSC, which manufactures clothing and footwear, reported first-half revenues and net profit down by 10 percent and 29 percent 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 percent fall in revenues and a 25 percent 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 percent in revenues and 50 percent in profits. Song Hong Garment JSC’s profit had fallen by 44 percent 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 has 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 have not received 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 behaviours have changed dramatically due to the pandemic. The top priorities for consumers now are medicines, food and savings.