The Vietnamese textile industry is showing strong momentum. According to the latest report from the Vietnam Textile and Apparel Association (VITAS), the industry has secured orders through the end of 2024, with many companies already negotiating deals for early 2025. This positive trend not only demonstrates the competitiveness of Vietnam’s textile industry but also reflects the global market’s continued confidence in Vietnamese products.

Export data shows that Vietnam’s textile industry has achieved considerable growth in major markets. Traditional export destinations such as the United States, Japan, South Korea, and China are all showing positive growth trends. Specifically, in July 2024, Vietnam’s textile exports reached $3.72 billion, an increase of 17.6% compared to the previous month. Vietnamese customs data further reveals that from January to July 2024, Vietnam’s total textile exports amounted to approximately $20.3 billion, a year-on-year increase of 6.3%.

In terms of individual company performance, TNG Investment and Trading JSC, which produces products for international brands such as Decathlon and Asmarla, has been particularly outstanding. The company reported revenue of 2.174 trillion Vietnamese dong (approximately $87.4 million) in the second quarter of 2023, with after-tax profit of 86 billion dong, representing year-on-year increases of 8.8% and 57.1% respectively. According to SSI Securities analysis, TNG’s surge in orders is partly due to increased demand from the Paris Olympics. The company has secured enough orders to maintain production throughout the year and is currently negotiating contracts for next year.

The United States, as one of the main export markets for Vietnamese textiles, significantly influences Vietnam’s textile industry. Data shows that in the first half of 2024, the value of textile inventories in the U.S. was $2.172 trillion, a year-on-year decrease of 2.4%. Despite the inventory decline, sales still grew by 1.2%. Over the past seven months, the U.S. imported $8.93 billion worth of textiles from Vietnam, an increase of 5.5% compared to the same period last year. This data highlights the competitiveness and popularity of Vietnamese textiles in the U.S. market.

VITAS predicts that Vietnamese textile exports will continue to perform strongly, especially in the last few months of the year when demand traditionally increases. This forecast injects confidence into the industry’s future development.

However, the development of Vietnam’s textile industry is not without challenges. Despite the positive trend in orders, the industry’s profit margins are still under pressure due to rising labor costs. In July 2024, Vietnam’s minimum wage increased by 6%, posing a challenge for many companies. Among the 30 textile companies listed on the two stock exchanges, only about half reported profit growth in the second quarter. This situation reflects the uneven development within the industry.

Changes in the global textile industry landscape may bring new opportunities for Vietnam. According to SSI Securities, recent instability in Bangladesh may lead to the closure of some factories, prompting global customers to seek alternatives in countries like Vietnam. This potential shift in orders could provide additional growth momentum for Vietnam’s textile industry.

The development of Vietnam’s textile industry is also influenced by global economic conditions and trade policies. As the largest export market for Vietnamese textiles, the trade relationship between Vietnam and the United States is crucial for the industry’s development. At the same time, Vietnam’s active participation in various free trade agreements, such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA), has opened more international market doors for Vietnamese textiles.

In terms of sustainable development, Vietnam’s textile industry is also actively transforming. The Vietnamese government encourages companies to adopt more environmentally friendly production methods and improve product quality to meet increasingly stringent international environmental and quality standards. Many enterprises have already begun investing in new technologies and equipment to increase production efficiency and reduce environmental impact.

Labor training and skill enhancement are also important issues facing Vietnam’s textile industry. With industrial upgrading and increased automation, the demand for highly skilled labor is growing. The Vietnamese government and enterprises are increasing investment in vocational training to ensure that labor skills can keep pace with industry development.

Summary:

• The Vietnamese textile industry has secured orders through the end of 2024, with some companies starting to negotiate orders for early 2025.
• Total exports from January to July 2024 were approximately $20.3 billion, a year-on-year increase of 6.3%; major markets (U.S., Japan, South Korea, China) all show positive growth.
• Taking TNG as an example, revenue and profit in the second quarter grew significantly, partly due to demand from the Paris Olympics.
• The U.S., as a major export destination, imported $8.93 billion worth of textiles from Vietnam in seven months, a year-on-year increase of 5.5%.
• Rising labor costs, with a 6% increase in minimum wage in July, are affecting companies’ profit margins.

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