The country earned roughly US$700 million from garment exports to the EU through October, reported the Ministry of Trade.
The textile and garment industry initially expected vigorous annual earnings growth of 18-20 per cent from clothing exports to the EU since the EU had agreed to remove quotas on Vietnamese clothing from January 1 of this year.
Industry analysts mainly attributed the sector s gloomy earnings figures to the uncompetitive production costs of Vietnamese clothing exports in comparison to those from China, India, and Pakistan.
While clothing exports from these other countries to the EU have grown tremendously this year, Chinese exports of cotton fibre shirts to the EU in this quarter doubled to 39 million units over the previous quarter, stated the ministry.
Additionally, Chinese sweater exports to the EU in the past quarter rose more than eight times to 125 million units. Furthermore, while Chinese T-shirt exports to the EU for the first three quarters of this year surged by 320 per cent over the same period last year, Vietnamese T-shirt exports to the same market fell by 10 per cent over the corresponding period.
This drastic situation stems from a 10-15 per cent decrease in competitors production costs compared to last year while Viet Nam s production costs have either remained steady or decreased by only 5-8 per cent.
Many local textile and garment companies said it is difficult for them to remain competitive in foreign markets given higher production costs.
Chairman of the Viet Nam Textile and Apparel Association Le Quoc An said local enterprises need to make great efforts to reduce their cost disadvantages, which would also help sharpen their competitive edge, not only in terms of product pricing but also quality standards and delivery schedules.
Presently, only several large domestic garment producers such as Nha Be and Viet Tien have adopted hi-tech equipment and opened modern facilities to reduce production costs in order to retain traditional customers and attract new ones in large export markets like the EU and US.
The ministry anticipates that domestic clothing exports to the EU will generate $300 million in revenue during the last two months of this year, bringing the sector s total revenue from exports to the EU to nearly $1 billion, which would fall $200 million short of the year s target.
