Vietnam's textile industry moves up the ladder in the knitting supply chain

Recently, the Vietnam Textile and Garment Group has opened the Vinatex Center for Product Development and Fashion Business, aiming to realize the goal of a one-stop destination for providing a complete product package, while realizing the goal of green growth. Mr. Vuong Duc Anh - Director of the Vinatex Center for Product Development and Fashion Business, Vietnam Textile and Garment Group shared with the media about this content.

Weak demand in the textile market has made competition increasingly fierce. How have the Vietnam Textile and Garment Group in particular and domestic textile and garment enterprises responded, sir?

In the past 2 years, the textile market has declined, but not all businesses in the industry are facing difficulties. Businesses with a direction, with a professional, creative and well-trained staff are still attracting customers, and orders are still increasing without decreasing.

Mr. Vuong Duc Anh - Director of Vinatex Product Development and Fashion Business Center

On the contrary, purely processing enterprises face many challenges because competition in this area is very large. The system of more than 13,000 textile and garment enterprises mostly does purely garment processing, competition not only in Vietnam but also comes from other countries such as Bangladesh, India, Pakistan... Currently, workers' salaries in these countries are only 1/3 of Vietnam's. Because of such difficulties, many enterprises are struggling, even having to close down.

The entire Vietnamese textile and garment business system, during that difficult time, had to find a suitable direction for itself. Based on its existing capacity, the Group chose the area of ​​creative labor productivity to create added value and attract customers.

Recently, the Group has opened the Vinatex Fashion Product Development and Business Center (Center). This is not only a step further into the area of ​​creative labor productivity, creating great added value, but also a driving force when the market recovers. The Group has the driving force to realize the goal of becoming a destination providing complete solutions for fashion customers. It is also to maintain a solid position in the context of an uncertain market.

It is known that the Center's establishment has closed the internal knitting supply chain. In your opinion, what is the level of competition in this product segment?

The biggest challenge for the Center is the pressure to innovate continuously, to create continuously and without stopping. For garment businesses, if they do not develop FOB (raw materials, production), there is a way back to CM (production), but for the Center, it is necessary to constantly innovate designs, continuously create innovative labor productivity to create added value to attract and retain customers and create trust to go the long way with the Group.

Regarding the goal of establishing the Center, we determined to strengthen the internal chain of links with the knitwear group in the immediate future. The Group currently has a spinning and finishing factory. In the near future, we will close the loop by making knitwear for end customers.

Knitwear is a highly competitive sector not only in Vietnam but also in other textile-producing countries. We believe that we will have an advantage in delivery time, order management and quality for our customers because we have an internal supply chain. In particular, we will take advantage of free trade agreements when the final garment products meet the very strict rules of origin from fabric onwards in the Vietnam - EU Free Trade Agreement, or from yarn onwards in the Comprehensive and Progressive Agreement for Trans- Pacific Partnership.

Opening of Vinatex Fashion Product Development and Business Center. Photo: Cao Nam

Fashion brands around the world have tightly closed chains and have built their brands over many years, so what is the problem for the Group when entering the knitting industry, sir?

Big fashion brands do not own factories. They are the buyers, not the competitors of the Group. With the Center, the Group creates an area to contribute more added value to the buyers, which are big fashion brands. Previously, they had to have a design team, but now we do it for them. They can come up with the initial idea, we realize that idea through 3D designs, creating samples directly at the Center. So customers receive more value from the supplier.

The Group has not yet oriented to build a separate domestic brand at the beginning. To compete with foreign brands, we determined that this is a long-term path. There have been domestic brands that are 10-15 years ahead of us, but to compete in the international market with big brands is still very difficult. Therefore, we determined to innovate step by step, gradually forming the Group's brands that are competitive enough in the region, gradually reaching the international level.

According to you, what values ​​will the Center bring to the Group in particular and the textile industry in general?

Previously, we mainly did outsourcing for customers, manufacturing according to available technical documents. Now we are entering a higher value area, creating more added value in the process of providing services to customers.

We can design samples, a library of raw materials for customers to choose from, with a wide variety, and quotes in the shortest time. Then we also have a team that can manage orders at large factories, and the final process is delivery to customers.

In addition to large customers who can proactively design raw materials, we also provide design services and sample and raw material quotation services for many customers in new market areas such as the Middle East to make FOB, ODM (raw materials, design, production).

When linking the value chain, we get back based on the final clothing product, not calculating separately from the fiber, weaving, dyeing, and sewing areas. When the market fluctuates but still maintains the end market as the sewing market, the fiber, weaving, and dyeing industry still survives. Here, the efficiency is maintained for the whole chain, that value is difficult to measure, but we can see the stability of the chain when the market is difficult.

What is the reaction of buyers to this Center, sir?

The psychology of customers is to find a unit with enough scale and reputation to go the long way and take advantage of the opportunities of trade agreements. With the formation of the Center, the Group is more attractive to customers by bringing more added value to customers.

On the other hand, the establishment of a Center that meets green building standards is the solution that the group is aiming for sustainable development. The Center is equipped with modern facilities, meeting international standards, following the green and sustainable trend, within the strategy of achieving the goal of net zero emissions. The Center building has achieved the Gold Lotus green building certificate - a certification of the Vietnam Green Building Council (equivalent to the LEED certification for green buildings in the US but adjusted to suit the specific conditions of Vietnam).

Thank you very much!

Source: https://congthuong.vn/det-may-viet-nam-tien-len-nac-cao-hon-trong-chuoi-cung-ung-det-kim-335305.html