Cambodia, Vietnam garment factory orders surge!

Garment factories in Cambodia and Vietnam have orders up to 2025. Why are global orders rushing in?

In recent years, the textile and garment industries in Vietnam and Cambodia have shown phenomenal growth. Vietnam, in particular, not only ranks among the top in global textile exports, but has even surpassed China as the largest supplier to the US apparel market.

Vietnam’s textile and garment exports in the first seven months of this year are expected to reach $23.64 billion, up 4.58 percent from the same period in 2023, according to a report by the Vietnam Textile and Garment Association. Apparel imports are expected to be $14.2 billion, up 14.85 percent. Inflation is under control in most major markets such as the United States and Europe, helping to boost purchasing power. Inventories of brands have dwindled in 2023, and some textile and apparel companies have now sought out smaller companies through the association to reprocess orders. Many have orders for the end of the year and are negotiating orders for early 2025.

Especially against the backdrop of difficulties in Bangladesh, Vietnam’s main textile and apparel competitor, brands could shift orders to other countries, including Vietnam. SSI Securities’ textile industry outlook report also said that many factories in Bangladesh are closed, so customers will consider shifting orders to other countries, including Vietnam.

In the first few months of this year, Vietnam’s textile and apparel exports to the U.S. saw positive growth, said Du Yuxing, counselor at the Vietnamese Embassy’s Economic and Commercial section in Washington. This is a positive result when most of the countries that directly compete with Vietnam have negative growth rates. It is predicted that Vietnam’s textile and apparel exports to the US may continue to increase in the near future as the autumn and winter seasons approach and suppliers actively purchase reserve goods ahead of the November 2024 election.

Mr. Chen Rusong, chairman of Successful Textile and Garment Investment and Trade Co., LTD., which is engaged in the textile and garment field, said that the company’s export market is mainly Asia, accounting for 70.2%, the Americas accounting for 25.2%, while the European Union is only 4.2%. As of now, the company has received about 90% of its planned order revenue for the third quarter and 86% of its planned order revenue for the fourth quarter, and expects full-year revenue to exceed VND3.7 trillion.

Vietnam can emerge in the textile and garment industry and become a new favorite of the world, behind the profound changes in the pattern of global trade. First, Vietnam depreciated by 5% against the US dollar, allowing it to gain stronger price competitiveness in the international market. Companies are able to export products to the U.S. and other markets at lower costs.

In addition, the signing of the free trade agreement has brought great convenience to Vietnam’s textile and garment exports. The 16 FTAs that Vietnam has signed and entered into force, covering more than 60 countries, have significantly reduced or even eliminated relevant tariffs. Especially in its major export markets, such as the United States, the European Union, and Japan, Vietnamese textiles and apparel have almost zero tariff entry. Such tariff concessions made Vietnam’s textiles virtually unimpeded in the global market, making it an ideal destination for global orders.

The large amount of investment by Chinese enterprises is undoubtedly one of the important driving forces for the rapid rise of Vietnam’s textile and garment industry. In recent years, Chinese enterprises have invested a lot of capital in Vietnam, and brought advanced technology and management experience. This not only promoted the modernization of Vietnam’s textile and garment industry, but also helped Vietnamese enterprises improve production efficiency and product quality. With China’s help, Vietnam’s position in the global textile and apparel supply chain has rapidly risen, becoming an important supply base for international brands.

For example, textile factories in Vietnam have made remarkable progress in automation and intelligence. Technology and equipment introduced by Chinese enterprises have helped Vietnamese factories automate the whole process of production from spinning and weaving to garment manufacturing, greatly improving production efficiency. Vietnamese textile factories have been able to produce high-quality products that meet international standards and can be delivered quickly at lower costs, attracting a large number of international orders.

In addition to Vietnam, Cambodia’s textile and garment industry is also rising fast. Cambodia, with its cheap labor and relatively stable political environment, has attracted a large number of foreign companies, especially in the garment manufacturing sector. Cambodia’s textile and garment exports have achieved rapid growth in the past few years, becoming a force to be reckoned with in the global supply chain.

The Cambodian government has made great efforts to attract foreign investment, attracting a large number of textile and garment enterprises through a series of preferential policies and the construction of special economic zones. In particular, several large-scale textile and garment industry clusters have been formed in Phnom Penh and Siang Kong. These factories not only produce clothing for export to the European and American markets, but also do contract manufacturing for a number of international brands.