The textile and garment industry is expected to overtake crude oil as the nation’s leading export earner this year to reach 9.5 billion USD, a year-on-year increase of 23 percent.

All is not rosy, however, as many manufacturers have restricted their core operations to enter into new business areas.

Instead of investing in core operations, many firms are opting to inject more and more capital into property, services sector as well as securities, citing their profit potential.

Although the number crunchers are yet to provide any official statistics, it’s estimated that industry turnover has shrunk in recent times.

Vinatex has shifted the focus of its investment to other areas. Besides investing in property and securities, the group has set up 10 companies in industrial zones nationwide.

After establishing three new businesses in finance, services and property, its core businesses now accounts for only 60 percent of the group’s total turnover, Chairman of the Vietnam Textile and Garment Group (Vinatex) Le Quoc An said.

An official from the Saigon Garment Trading and Production Joint Stock Company, who requested anonymity, said his company has forecast earnings of 30 billion VND this year, half of which comes from property.

According to statistics from the Vietnam Textile and Apparel Association, property is the most promising source of revenue as many clothing companies own prime real-estate that’s worth plenty.

Many firms admit that the textile and garment industry is no longer as attractive owing to increasing production costs and the shortage of a qualified workforce.

The industry has never faced a labour crisis like the present one, with many workers switching to other industries where the salaries are higher.

Statistics from the Vietnam Textile and Apparel Association indicate that the shortage of qualified labour has resulted in the industry’s overall productivity being 30-50 percent lower than in other South-east Asian countries.

For some companies, the fall in productivity has been driven by a failure to adapt after equitisation, forcing many textile and garment joint stock companies to seek out other ways to make a buck.

Source: VNA