Garment Industry Face Labor Shortages

After export quotas on Viet Nam’s apparel industry were abolished, the garment industry’s growth rate reached 20-30%, an encouraging improvement. However, labor shortages and FOB production continue to cause major headaches for the industry.

Workers in a factory of Viet Tien Garment Company

Garment industry no longer attracts labor

Nowadays, purchasing equipment is much easier than finding skilled labor, a garment manufacturer said.

This is the common crisis amongst all of the country’s garment factories. Although the average income for a HCMC worker is VND 1.5 million/month (approximately US$ 93) today, the industry still faces the risk of losing more and more labor.

According to Mr. Nguyen Huu Toan, Vice President of the Saigon 2 Garment Joint Stock Company, they are in need of 2,000 workers to operate 40 garment production chains in Cu Chi, where currently there are only 15 chains operating.

In Quang Ngai, four of seven garment factories have closed due to the lack of available labor. Local factories are now resorting to hiring unskilled workers from other regions.

Although there are a large number of laborers moving from the cities to the provinces, the skilled labor force is still scarce. Most workers remain unfamiliar with modern industrial working practices, and thus repeatedly skip work without permission.

FOB exports: dominated by foreign companies

With an average growth rate of 20%, the garment industry has provided one of Viet Nam’s top exports in recent years. Due to the abolishment of export quotas for Viet Nam’s garment industry, by 2010 Viet Nam expect to reach a US$10-12 billion turnover for clothing goods.

However, this industry still has to face many disadvantages. FOB means that the manufacturer owns the product that they are selling outright; they have sourced the raw materials and packaging of the finished products. Currently in Viet Nam, most of the garment manufacturers are only doing the processing work and thus the total number of FOB exports remains very low, amounting for only 20-30% of total apparel exports.

Vietnamese manufacturers are relying heavily on imported materials (80% of materials are imported).

According to many experts, the proportion of FOB export in 2007 will be 5-10% higher than the current percentage.

All textile and garment companies need to realize the importance of FOB exports for their survival. What matters to Viet Nam’s garment industry is not the number of orders but the skilled labor force and FOB exports, Mr. Pham Xuan Hong, President of the Saigon 3 Garment Company commented.


By M.H – Translated by Khanh Hong

Other news

Most view

Vietnamese tea wins “Teas of the World” awards

Vietnamese tea wins “Teas of the World” awards

The saviour of Vietnamese tea has won hearts at the first International Gourmet Tea Competition “Teas of the World” recently held by the Agency for the Valorisation of Agricultural Products (AVPA) in Paris, France.


VNPT & SeABank cooperate to enhance connections

The Vietnam Posts and Telecommunications Group (VNPT) and SeABank just co-signed cooperation agreement, aiming to develop the two sides’ economic, business and investment potential.

Self - introduction

VNPT targets to be leading digital service provider in Vietnam

The grand opening ceremony of the VNPT-Information Technology Company (VNPT-IT), a new member of the Vietnam Posts and Telecommunications Group (VNPT), was held yesterday in Hanoi. With thousands of IT engineers and the focus on developing state-of-the-art technological products related to Artificial Intelligence (AI), Bigdata, and Blockchain, the new company is considered the main force to help VNPT fulfill the goal of becoming a leading digital service provider in Vietnam and an important Digital Hub of the neighborhood as well as the world.

Stock market

SAS profits VND 118bln

The Southern Airports Service Joint Stock Company (Sasco) which is listed under code SAS on the Unlisted Public Company Market (UPCoM), announced its second quarter’s financial report with net revenue at VND 634.5billion, an increase of 14 percent compared to last year.