Vietnam Benefit Little From Textile Products
Posted: 10/23/2014 06:10:51 Edited: 10/23/2014 07:10:51Clicks: 7696
So far, Vietnam has become one of the biggest countries that export textile products to others. Textile products also make the most export amounts in Vietnam. The products include knitted fabrics, garments and accessories
At present, famous brands like Zama, H&m, Mango, Uniqlo and Levi’s s sell trousers at 50 to 80 USD in American, European and Japanese markets. Most of the trousers are marked with “Made in Vietnam”. However, the Vietnamese factories earn only 1.6 to 2.2 USD for each trouser. Nevertheless, the net profit for each trouser will be only 0.2 USD after deducting costs like salaries, utilities, rents, freight charges, etc.
The main reason for the low profits of textile products exported by Vietnam in this two decades is that it steel relies on importing raw materials.
According to Vietnamese General Statistics Office, Vietnam exported about 15.5 billion USD of textile products in the first nine months of 2014. However, the imported amounts of cotton, fiber, silk, fabric and other raw materials accounted for 11 billion USD. In another word, there are nearly 70% textile enterprises in Vietnam specialized in the processing textile products. The foreign factories place orders and supply stitches, zippers, fabrics and types of products. The entrusted enterprises then make trousers with those materials and earn processing wages. For some factories, the circular knitting machines are also required in order to finish the orders in a better way.
There are also some Vietnamese enterprises manufacture products according to requirements of customers’ orders. Under this circumstance, they can not control the supply source of raw materials. Thus, the profits earned by these factories are just higher by 10% than that of the pure processing factories.
In recent two years, many factories from China mainland, Hong Kong and Taiwan came to invest in Vietnam. They are trying to make profits from the free trade agreements like EVFTA, TPP and RCEP that Vietnam has participated.
At present, famous brands like Zama, H&m, Mango, Uniqlo and Levi’s s sell trousers at 50 to 80 USD in American, European and Japanese markets. Most of the trousers are marked with “Made in Vietnam”. However, the Vietnamese factories earn only 1.6 to 2.2 USD for each trouser. Nevertheless, the net profit for each trouser will be only 0.2 USD after deducting costs like salaries, utilities, rents, freight charges, etc.
The main reason for the low profits of textile products exported by Vietnam in this two decades is that it steel relies on importing raw materials.
According to Vietnamese General Statistics Office, Vietnam exported about 15.5 billion USD of textile products in the first nine months of 2014. However, the imported amounts of cotton, fiber, silk, fabric and other raw materials accounted for 11 billion USD. In another word, there are nearly 70% textile enterprises in Vietnam specialized in the processing textile products. The foreign factories place orders and supply stitches, zippers, fabrics and types of products. The entrusted enterprises then make trousers with those materials and earn processing wages. For some factories, the circular knitting machines are also required in order to finish the orders in a better way.
There are also some Vietnamese enterprises manufacture products according to requirements of customers’ orders. Under this circumstance, they can not control the supply source of raw materials. Thus, the profits earned by these factories are just higher by 10% than that of the pure processing factories.
In recent two years, many factories from China mainland, Hong Kong and Taiwan came to invest in Vietnam. They are trying to make profits from the free trade agreements like EVFTA, TPP and RCEP that Vietnam has participated.
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