Garment industry gears to face challenge of cheap imports
05 Oct '06
2 min read
Garment companies are prepared to face the onslaught of cheap imported goods because of new import tax preferential list which binds Vietnam to decrease import tax on 117 items.
Vietnam Textiles and Apparel Association Chairman Le Quoc An informed that local garment manufactures would be the worst sufferers as the reduction would apply on both garment material and finished garment products.
Ninh Ngoc Nam, Sales Manager of the Thai Tuan Textile Co's Ha Noi branch stated that imposing the preferential tax list is advantageous to producers and consumers as products will be less expensive due to low production cost.
Local apparel manufacturers need to import 70 percent of their fabrics, accessories, machinery and technology. Decreasing taxes on imported materials will enable companies to reduce production prices which will increase competition.
He added that decrease in taxes on rival's products would not distract his consumers as the company is in possession of reputed trademarks.
An informed that tax reduction will not have strong impact on the industry, as it has faced cheap Chinese clothing and local units can weather the storm by focusing on designing and trademarks.
Having already faced 30 percent reduction in import taxes a few years earlier, Vietnamese garment units are expected to stand up to this challenge once again posed by the country's obligation to WTO requiring scaling down the taxes.
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