The Vietnamese textile and garment sector could see a VND11trn (US$467m) hit from the fallout of coronavirus, one of the country’s main textile groups has said.
The Vietnam National Textile and Garment Group (Vinatex) has said the industry continues to be impacted by export orders being delayed and cancelled, which will lead to job losses over the next two months.
In an update following an emergency meeting of its 22 key units and management agency to review, identify and propose solutions to the situation, Vinatex said it is likely many enterprises will lose their liquidity by the end of April if there is no policy adjustment put in place.
Vinatex forecasts an industry loss of VND5trn if 30% of workers are laid off in April and 50% are laid off in May. Should the situation persist beyond this time, the industry loss will be around VND3trn per month.
It also said the industry imports about US$1.5bn in materials a month. Assuming 20% of orders are cancelled, it means $300m of raw materials will not be used, resulting in excess inventory. Vinatex alone will lose about $24m it said.
Should the Covid-19 epidemic end in late May, with an industry recovery forecast for June, Vinatex anticipates an industry loss of VND$11trn and its own loss of VND1trn.
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