Vietnam to become "sustainable supplier of choice" for textiles and apparel

Labour costs in Vietnam are relatively cheaper than those in China, Indonesia, Thailand and the Philippines.

“Free Trade Agreements (FTAs) also play an important role in helping Vietnam move up the value chain in the textile and apparel industry,” Giang said.

The country’s textile and apparel industry contributes 15% of total export value and had an annual growth rate of 12% from 2010 to 2017. FDI companies have so far invested about USD 17.5 billion in the industry.

With some 6,000 factories and employing more than 3 million people, the industry is both economically and socially important for the country.

However, the sector has an adverse environmental impact. Intensive water extraction, use and discharge of waste water and high-energy consumption for water heating and steam generation are all environmental concerns.

Vietnam is one of the largest exporters of apparel goods in the world, mostly because of its low-cost production rather than its environmental standards.

Green commitment 

Vietnam has committed to fully implementing 17 goals of the 2030 Agenda for Sustainable Development to ensure economic, social and environmental benefits.

“Implementing a shared responsibility to respond to the 21st century’s biggest global challenge, Vietnam and the international community ratified the Paris Agreement on climate change in 2015. And the textile industry is part of that commitment,” Giang said.

Vietnam is also part of FTAs in which traditional tariff barriers will gradually be eliminated. However, instead of tariffs, countries could create technical barriers to protect their products.

Barriers could be related to product quality, environmental standards, energy labels, and carbon labels, among others.

VITAS set up an Environment Committee three years ago and has taken part in an action programme for the Green the Textile and Apparel Industry group.

However, the challenge is that fabrics and materials in the country still mainly depend on imports (99% of cotton and fibers are imported every year), according to Giang.

Export processing is mainly CMT (Cut-Make-Trim – about 65%), OEM (Original Equipment Manufacturer – 25%), ODM (Original Design Manufacturer) and OBM (Original Brand Manufacturer – 10%).

The technological level, except for sewing, remains modest, while another issue is low labour productivity, Giang noted.

Vietnam-China partnership 

Bui Hoang Yen, deputy representative of the Department of Trade Promotion under the Ministry of Trade and Industry, said it was important to develop a sustainable textile and apparel supply chain partnership with China.

Last year Vietnam’s national textile and apparel exports reached USD 36.2 million, with year-on-year growth of 16%, she said.

The country has become the world’s third largest textile and apparel exporter after China and India.

Sun Rui Zhe, president of the China National Textile and Apparel Council, said the Chinese council has long been committed to promoting the social responsibilities of China’s textile and apparel enterprises.

In recent years, with investment from Chinese enterprises in Vietnam, such as Shenzhou International, Youngor, Huafu Fashion, Luthai Textile, New Wide Group, Far Eastern Group and Jifa Group, the China-Vietnam textile and apparel industry confluence is increasing.

It is important to establish a sustainable supply chain relationship for the development of the global textile and apparel industry and long-term competitiveness of the industry in China and Vietnam, he said.

Initiated in 2008 and held each year by the China National Textile and Apparel Council, the conference is an international exchange platform committed to the management and brand development of textile and apparel supply chains.

The conference aims to improve supply chain management and competitiveness of Chinese textile and apparel enterprises, and facilitate their collaborative innovation in the international supply chain.

The conference was attended by nearly 200 delegates from the China National Textile and Apparel Council, China Textile Information Center, International Textile Manufacturers Federation, ASEAN Federation of Textile Industries and other international organisations such as WWF and World Bank.