Textile industry faces headwinds in 2023 after poor results in Q4

VIETNAM, February 7 – HÀ NỘI — The income of Vietnamese textile and garment enterprises were being diverse in the fourth quarter, with many large names publishing excellent losses.

After becoming seriously impacted by the COVID-19 pandemic, textile and garment enterprises have progressively recovered and have been one of the crucial export industries that recorded incredible progress charges in the initially months of 2022. 

Details from the Normal Division of Customs confirmed that the export price of the textiles and garments sector in 2022 reached US$37.57 billion, a gain of 14.7 for every cent 12 months-on-year. 

The US is the major import market place of Vietnamese textile and garments, worthy of $17.36 billion previous calendar year, up 7.9 for each cent. It was adopted by the Europe Union and Japanese markets, achieving $4.46 billion and $4.07 billion, up 34.7 and 25.8 for every cent, respectively.

Despite the fact that the field saw positive export prospective clients in the first and second quarters of 2022, it commenced to encounter lots of troubles in the previous two quarters of the yr as global demand from customers for textiles and clothes declined. 

The export price peaked in August 2022. 

The sharp decline in orders considering that September was attributed to a reversal of the development, producing the industry’s export value to fall to 2022’s cheapest level in the past quarter.

Vietnamese textile and garment enterprises’ profits diverged in the fourth quarter immediately after acquiring amazing progress in the year’s to start with quarter.

Blended benefits

Stats from 15 major enterprises in the textile and garment marketplace compiled by cafef.vn point out that the total consolidated income immediately after tax in the fourth quarter of 2022 was only VNĐ440 billion ($18.7 million), down 63 per cent from the fourth quarter of 2021, amid superior inflation and economic downturn hazards in the primary export marketplaces.

Vinatex amazed the marketplace with a decline of $5 billion. Its gain right after tax attained $450 billion in the same time period very last yr, which was the most lucrative organization in the textile team. This is also the initial quarter that Vinatex has recorded a loss.

Vinatex mentioned that owing to the affect of China’s zero-COVID plan, desire in some markets lowered at the close of the 12 months, impacting the usage scenario and the prices of yarn stock. 

In the initially months of the fourth quarter, corporations were trapped in a challenging problem when the yarn market’s liquidity was nearly zero, the garment market’s orders dropped sharply, and info about losses from its subsidiaries, particularly fibre units, was claimed. 

Having said that, for the whole of 2022, Vinatex continue to created a gain of additional than VNĐ1 trillion, down 20 for each cent 12 months-on-calendar year many thanks to the massive revenue in the year’s 1st half.

In the same way, Garmex Saigon Company also endured a loss of around VNĐ59 billion in the fourth quarter, while it posted a financial gain of approximately VNĐ35 billion in 2021. 

The company reported it experienced to stop production at some factories from mid-August to strengthen the excellent, so most of the concluded goods experienced to be retained in storage although the stock experienced not been eaten. Garmex Saigon only noted a earnings in the next quarter and lost all three remaining quarters very last year, main to a net loss of approximately VNĐ66 billion in 2022, marking its to start with yearly loss given that listing.

Other well-known enterprises in the business, these types of as Track Hong Garment, Century Synthetic Fiber Company, and Everpia, experienced undesirable effects, with their revenue reducing about 40-50 for every cent around 2021 to VNĐ55 billion, VNĐ43 billion and VNĐ27 billion, respectively.

On the opposite, some top providers recorded positive expansion of up to two or even 3 digits.

Thanh Cong Textile Garment Investment Trading’s income right after tax surged 140 for each cent on-year to VNĐ60 billion in the fourth quarter. For 2022, it recorded an enhance of 95 per cent in earnings to VNĐ281 billion.

Phong Phu Corporation was the most rewarding enterprise in the complete figure. Its just after-tax income achieved VNĐ99 billion, 125 per cent up 12 months-on-year. It noted a document earnings considering that its operation of VNĐ486 billion previous 12 months, up 42 for each cent about the very same time period. 

Problems ahead

Many thanks to efficient no cost trade agreements and rising compliance with the principles of origin to delight in preferential tariffs as dedicated at the FTAs, the export outcomes of textiles and clothes amplified in 2022.

Having said that, the Vietnamese textile and garment marketplace even now faces many difficulties and issues when it is greatly impacted by enter expenses, labour charges and probable economic economic downturn. The present-day slowdown of international economies has decreased demand from customers in the domestic industry and key importing international locations together with the US, Japan, and South Korea.

In a new report, KIS Securities reported that 2023 would be a difficult yr for the textile market because of to the lower demand from customers for apparel items. According to the Vietnam Textile and Apparel Association (VITAS), pre-orders for the first quarter of 2023 fell by 25-27 for each cent year-on-year, signalling a difficult yr in advance. — VNS

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