Garment sector is the second highest foreign exchange earner after crude oil; however, after Vietnam's WTO accession, small enterprises are incurring huge losses and feared to be bankrupt, according to Le Quoc An, Chairman of the Vietnam Textile and Garment Association.
Garment sector has major problem of lack of local material and hence, garment manufacturers have to import raw materials at higher prices resulting into increased cost of finished products. Another drawback is price competitiveness of Vietnamese goods, which decrease against Chinese products.
One of the major garment firms of country, Viet Tien Garment Co reported that it imported 80 percent of accessories, machinery, technology and chemicals.
If this trend continues, most of the weak garment firms will be bankrupt soon and only major companies will survive.
Removal of quotas on Chinese products had worsened the situation in 2005 but in current year exports revenue reached US $700 million which is healthy growth sign, Diep Thanh Kiet, Vice Chairman of HCM City's Association of Textile and Garment Embroidery and Knitting stated.
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