Vietnam’s Textile Industry to Achieve $44 Billion Export Target

With a robust influx of orders, the Vietnam Textile and Apparel Association (VITAS) expect to hit the 2024 export target of $44 billion. The holiday season, a prime time for textile production aimed at Christmas and New Year orders, is fueling this growth, with the industry gradually stabilizing after a challenging 2023.

Significant Export Growth in 2024

Recent data from the General Statistics Office reveals that, as of October 2024, Vietnam’s textile and apparel sector ranks fourth among the country’s largest export categories, achieving a total export value of $30.57 billion—a 10.5% increase over the same period last year.

Vietnam National Textile and Garment Group (Vinatex), a leader in the industry, reported a 7% increase in export value in the first nine months of 2024 compared to 2023. Production goals for the first three quarters reached 73.6% of the annual target, with profit rising 70% year-on-year. Vinatex leaders see a promising path to meet the full-year goals for 2024, backed by positive recovery signals from major markets.

Recovery in Key Markets

Demand is rebounding in major export markets, with U.S. inflation hitting its lowest level since March 2021 at 2.5% in August 2024 and retail sales up by 2.11%. European markets, too, are stabilizing, as inflation falls to 2.4%, with a slight rise in retail sales. Japan’s GDP saw a 2.9% year-on-year increase in Q2 2024, while household spending is on a slow yet positive incline.

Thành Công Textile Garment Investment Trading Joint Stock Company (TCM) announced securing about 92% of its Q4 revenue target, as well as 90% of its 2024 sales goal. TCM has diversified its offerings to include eco-friendly, recycled, and high-value products, aiming to enhance its product value chain while expanding to untapped markets and boosting domestic sales.

Advantageous Position with CPTPP

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has notably boosted Vietnam’s textile exports to new markets like Canada, Australia, and New Zealand. As of July 2024, textile exports to CPTPP markets hit $660.11 million—a 22.58% increase from June and a 10.86% increase year-on-year. Over the first seven months, export revenue from CPTPP markets reached nearly $3.66 billion, representing 18.05% of Vietnam’s total textile exports.

Mexico has been a standout CPTPP market, with Vietnam’s textile exports to the country rising by 31.84% year-on-year as of July, though it accounts for just 3.25% of exports within CPTPP member countries.

Despite the gains, VITAS Chairman Vu Duc Giang highlights competition within CPTPP markets, particularly with Bangladesh, where lower labor costs and tax advantages pose challenges. However, Vietnam holds competitive advantages in geographical proximity, advanced port infrastructure, and capacity to produce high-value products with diverse designs.

Achieving the $44 Billion Export Target

VITAS is confident in reaching the 2024 target of $44 billion, with holiday demand driving a strong finish. The Ministry of Industry and Trade’s Strategic Research and Policy Institute concurs, noting that political instability in major textile-exporting countries like Bangladesh has opened opportunities for Vietnam to fill global supply gaps.

Still, Vinatex Chairman Le Tien Truong advises caution. While the outlook is optimistic, particularly for Q4 2024 and Q1 2025, companies must carefully manage production and risks, particularly in raw material sourcing, to stay on track and anticipate trends into 2025.