The deputy general director of a big garment company said that since September 2008, foreign partners have cut orders by 25-30% over the same period of last year.

“We are fulfilling orders we signed before. Meanwhile, orders for December 2008 and the first quarter of 2009 are expected to be cut by 25-30%,” he said.

The deputy director also said that the company has accepted 5-10% cuts in export prices for contracts for December and early 2009. Importers are also asking to negotiate contracts quarterly instead of for the whole year.

Director of Binh Hoa Garment Company Phung Dinh Ngo has become anxious as he is finding it tough to arrange jobs for nearly 300 workers. In previous years, he had to persuade his workers to work overtime to fulfill orders. However, the situation is quite different now as orders have decreased by 50% from the same period of last year.

Ngo said that if he runs all his machines, he needs some 400 workers to make 100,000 cotton T-shirts every day. However, only 250 labourers are now working.

The HCM City Association of Garment, Textile, and Embroidery-Knitting (Agtek) has confirmed that many garment companies have been experiencing the same difficulties as Ngo’s company. Chairman of the Vietnam Textile and Apparel Association (Vinatas) Le Quoc An during a recent workshop also confirmed the sharp decreases in the number of garment orders.

An said it will be very difficult to fulfill the 2008 plan of exporting $9.5bil worth of apparel products. In October 2008, apparel exports brought $800mil only. This is the second time this year Vietnam has seen apparel exports fall off due to diminished orders from the main export markets of the US, EU and Japan.

Total garment export turnover reached $7.64bil in the first ten months of the year. In order to fulfill the yearly target, garment companies need to export $930mil worth of products in November and December, a near impossible task in the current conditions.

A representative of a big US importer said that the order decreases may last until June 2009. The representative said that his company has cut orders with all markets, not only Vietnam.

However, he said that importers, though slow in placing orders, still want exporters to deliver on schedule. Therefore, only companies which have high productivity and the capability of delivering products on time will get orders.

Meanwhile, garment companies are worried about the lack of workers which always happens at the end of the year and Tet (Lunar New Year). Companies always lose some 40% of total workers after Tet (the workers go to their home villages on Tet and do not return). The worry has made companies hesitate to sign contracts with foreign partners for January and February, as they fear that they will not have enough workers to fill orders.

Phan Van Kiet, Deputy General Director of Viet Tien Garment Corporation, said that in order to overcome the difficulties, garment companies need to follow Viet Tien’s lead. Viet Tien has restructured its products and export markets. The US market accounts for no more than 25% of its production capacity, while the EU market’s proportion has been raised to 35% and Japan to 20%.

Source: Tuoi tre