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Vietnam continues to grow at an exhilarating pace

by Deepak Mohindra

10-January-2020  |  4 mins read

AOV December 2020

It has been an amazing year for Vietnam’s garment and textile industry. I still remember when I was in the country in early 2016, there was lot of uncertainty in the industry over the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) issue and by the time the year ended, the country was back on track – it appeared as if CPTPP never had any impact on Vietnam’s garment and textile industry.

It’s been only growing since then! And there are numbers to prove the point. 2018 saw the industry surpass its export target of US $ 34 billion and achieve US $ 36 billion; and this year too, the numbers are expected to touch US $ 39 billion, which will still be a significant rise from 2018. What is noteworthy is that the industry has achieved this despite all the uncertainty around the ongoing US-China trade war.

In fact, one of the things that I really admire in Vietnam is the ability to move on. They don’t fret and complain endlessly, but quickly change their strategy and continue to grow. This is something that other manufacturing destinations definitely need to learn!

Throughout the last year, I could sense that gleam of satisfaction on the face of many industry people whom I met at different events. That, to me, reflects the growth of the industry. Though there have been debates over who has gained the most from the trade war between economic giants, yet numbers distinctly state that Vietnam has been a significant beneficiary.

Contrary to rumours, when I spoke to some company owners, almost all of them were happy to state that their factories were booked till June. I believe the garment and textile export target for this year is US $ 42 billion (though I don’t have the exact figures) but with the way things have turned out in 2019 and with factories booked till the first half of the year, I will not be surprised if the country surpasses the projected target, whatever that number will be.

Another good thing to happen for the country last year was the signing of the European-Vietnam free trade agreement. I am sure, the results of the agreement will be seen only by the second-half of 2020, but the positivity that it spread is already visible.

It also gave me immense pleasure to see the textile relations between India and Vietnam strengthen during the year, which we have covered in detail in this issue. And add to it, foreign investment in Vietnam’s garment and textile industry yet again saw a significant surge with Germany making a big contribution. It’s no longer just Taiwan and Korea, Europe and Germany in particular too is interested in Vietnam. This itself speaks volumes for the significance that Vietnam holds today in the textile value chain.

In this issue, we have looked at some of the major happenings in the country’s garment and textile sector in 2019, which has further strengthened it as one of the fastest growing hubs in the world and if it continues at the same pace, I will not be surprised to see the industry attain its target of US $ 60 billion by the year 2025.

As we start the New Year, I take this opportunity to wish all the readers a very happy, healthy and prosperous year ahead!

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