Many textile companies have secured orders to last until the end of 2024 and are already negotiating deals for the start of next year, according to the Vietnam Textile and Apparel Association (VITAS).
The main export markets for Vietnam’s textiles, including the U.S., Japan, South Korea, and China, have shown positive growth. In July, textile export turnover reached US$3.72 billion, marking a 17.6% increase from the previous month.
From January to July, Vietnam’s textile export turnover totaled approximately $20.3 billion, up 6.3% year-on-year, according to Vietnam Customs data.
TNG Investment and Trading JSC, which produces for brands like Decathlon and Asmara, reported a second-quarter revenue of VND2.174 trillion ($87.4 million) and a post-tax profit of VND86 billion, up 8.8% and 57.1% year-on-year.
The surge in orders for TNG is partly driven by heightened demand ahead of the Paris Olympics, with the company securing enough orders to last through the year and currently negotiating for next year’s contracts, according to SSI Securities.
VITAS forecasts continued strong performance for textile exports, traditionally bolstered by increased demand in the final months of the year.
In the U.S., one of Vietnam’s major textile markets, the value of textile product inventories in the first half of the year was $2.172 trillion, down 2.4% year-on-year. Despite this, sales rose by 1.2%. Over the last seven months, the U.S. imported $8.93 billion worth of Vietnamese textiles, a 5.5% increase from the same period last year.
The instability in Bangladesh has potentially led to the closure of some factories, prompting global clients to seek alternatives in countries like Vietnam, according to SSI Securities.
However, despite the positive trend in orders, the industry’s profit margins remain under pressure due to rising labor costs.
The minimum wage in Vietnam increased by 6% in July, posing a challenge for many companies. Among the 30 textile firms listed on two stock exchanges, only about half reported profit growth in the second quarter.
Source: https://www.msn.com/