Investing in new technology to reduce production costs will help Vietnam’s textile and apparel industry increase its competitive edge, the country’s industry association has said.
Amid fiercer global competition and taking into account the impact of the fourth industrial revolution, Vietnam’s garment and textile firms need to apply new technologies to help increase productivity and use less labour, Truong Van Cam, vice president and general secretary of the Vietnam Textile and Apparel Association (VITAS), has said.
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Yet the fourth industrial revolution poses challenges regarding investment, restructure and labour, Cam says, adding that the appropriate technological access and the clarification of self-potential will help businesses choose the most efficient way to penetrate into foreign markets.
The export value of Vietnam’s textile and garment industry is forecast to reach US$31bn in 2017, but value added is not as high as those enterprises focusing only on processing. Many companies have come up with solutions to increase the localisation rate and improve value added export, but the results have not been as expected, Cam says.
“The [fourth revolution] will inevitably come. Many textile and garment enterprises now use modern technology, robots, 3D printers, laser cutting technology to replace the simple [production methods]. When enterprises apply technology into production, many workers in the garment industry will lose their jobs.
“But the challenge from Industry 4.0 for the textile and apparel industry is that enterprises need large capital to invest in machines, and laborers must have a high level of modern equipment, so businesses will have to train improve the level of labour.”
He finished: “Forecasting, Industry 4.0 will create rapid development in the coming time. Thus, seizing the opportunities and overcoming the challenges of this revolution is of decisive significance for labor-intensive sectors such as textiles.”
Vietnam’s textile and apparel industry recently opposed a proposed 6.5% minimum wage increase from the beginning of next year, saying the move will reduce competition, shift the labour structure and prevent expansion.
Cam warned: “The impact of the large wage increase, which directly affects the competitiveness of export textile products, may affect the sector’s export turnover in the coming years.
“For textile and garment enterprises with high labour costs, increasing salary and insurance will increase labour costs, leading to low profit. And low profit margins will not be enough to improve technology in depth.”
