As soon as there were information about some US and EU customers making notice about suspending, delaying, canceling or canceling orders for Vietnamese textile and apparel imports, the affected enterprises (DN) were very " bewildered ”, because they had just finished worrying about lacking production materials, they immediately fell into a more difficult situation, which is the lack of output.
Facing this unprecedented situation, Mr. Le Tien Truong - General Director of Vietnam National Textile and Garment Group (Vinatex) urgently held an online meeting with a number of key leaders of member enterprises, in order to timely have a plan. cope with.
Mr. Le Tien Truong - General Director of Vinatex
A common judgment made by member enterprises' leaders to report on the Group, the current rapid development of the market, especially when the Covid-19 epidemic spread in the EU and the US, has forced governments of other countries to make drastic measures to close the border, to encourage citizens not to go abroad, to restrict domestic movement, to close trade centers, to cancel events attracting large crowds ... In just three days from 16 -18.3.2020, a number of major customers from the EU and the US all have negative notices for domestic textile and garment enterprises. The main trend is to extend delivery time to 3-4 months to wait for the market to recover. In addition, some items of seasonal and business in March and April are very difficult, customers cancel orders. The number of canceled orders equivalent to the production capacity of many units is up to half a month of production, equivalent to 3-3.5% of the entire 2020 production.
Speaking at the meeting, Mr. Nguyen Xuan Duong - Chairman of Hugaco said:
“At first we thought the input (material) is difficult, but now there are materials for production, immediate output is difficult. Some orders were canceled, some orders were delayed. Time to open LC also lasted, 60 days ago, it is now 120 days. The more businesses that do FOB, the more difficult it is due to capital deposits in raw materials. Businesses become bad debtors of the bank. In the first quarter, revenue of Hung Yen Garment Corporation decreased by 20%. Must check each and every stage to reduce costs. We have not assessed the full damage. Not sure how to act in the near future, the situation changes day by day, hour by hour ...
Mr. Nguyen Xuan Duong - Chairman of Hugaco's Board of Directors
Within just 3 days of the disease outbreak and before the decision to close the border, banning the crowds of the EU and the US, the consumption dropped sharply due to the closure of many major shopping centers. this time. This is an unprecedented crisis for more than 20 years of operation of Vinatex. The group experienced the Asian economic crisis in 1997 and the world economic crisis in 2008, but at that time, the demand decreased but the delivery progress decreased, but production was still maintained. In the crisis caused by the Covid-19 pandemic this year, there was a phenomenon of delaying the delivery time, especially canceling orders, which made the managers of textile enterprises very worried to find solutions.
“The US and EU's decision to temporarily stop importing Vietnamese textiles and garments greatly affects the export situation of May 10 into these two markets. We have a double problem: in February, enterprises had to worry about importing NPLs to ensure continuous production, so far, having enough NPLs, they temporarily stopped production and stopped delivering shipments of produced goods. For example, guests cancel all shipments going by air to the US. Sea freight shipments in March moved back to April and May. Adjusted to reduce the number of purchases in the following months. Korean customers have not yet received 40,000 units of finished shirts, and postponed orders for 39,000 units in April as planned. In addition, hundreds of thousands of other products manufactured for American customers are on the production line, and customers are asked to stop. Enterprises really do not want to receive more information about stopping imports, if this stoppage happens in all countries, the losses will be huge. Businesses also expect the State to reduce interest rates, reduce taxes, and make debt rescheduling. Perhaps they should support salaries for workers in labor-intensive enterprises such as garment and leather shoes like the US and German CPs. action: support and allowances for unemployed people and NLD. ”- Mr. Than Duc Viet - General Director of May 10 Corporation said.
Mr. Than Duc Viet - General Director of Garment Corporation 10
Vinatex's General Director, Mr. Le Tien Truong stated that in March and April 2020, the enterprises in the Group were responsible for production to serve the domestic market and to produce epidemic prevention items. Negotiate with customers to avoid maximum damage. Negotiate with suppliers to delay payment of raw materials. Balance the financial provision to pay wages and maintain erratic production. Temporarily stop investment projects in 2020. However, with the situation that Vietnam mainly exports exports, it still has to rely on the handling of world epidemics, ending the global crisis. If the epidemic handling process is prolonged, not only the textile industry, but also other industries will face difficulties in this year.Vinatex still unifies priority No. 1 as retaining workers (employees), preserving force. No matter how hard it may be. Although this is a tough problem for labor-intensive businesses like textiles. Textile enterprises must pay huge salary fund for employees. Enterprises should focus on finding positive solutions to minimize the need to reduce the labor force. In the immediate future, enterprises do not increase working hours, allow employees to take two days off per week, in more difficult cases, they must reduce the number of working days of employees, both leaders and workers share income reduction, but still have to ensure higher than the statutory minimum wage, in a spirit of adherence to overcome market bottoms. Proposing business leaders to do well the thought work for employees. Calling the team to unite with one heart to overcome difficulties, Until this point, it is not sure when the world will fully control the disease, so the leaders of Vinatex member enterprises agreed Meeting with the Government on the following points, in order to help businesses concentrate resources to maintain production, keep prices attractive to customers in the context of low total market demand, preserve labor force, and ensure social security:
Source: Vinatex.com.vn
