04:02' 18/04/2008 (GMT+7)
VietNamNet Bridge - A recent meeting of members of the HCM City Textile, Garment, Weaving and Embroidery Association has become even more relevant in the context of soaring prices in consumption goods and materials as well as the weakening US dollar.
Pham Xuan Hong, deputy chairman of the HCM City Textile, Garment, Weaving and Embroidery Association (Agtek) said the inflation rate and the weakening US dollar has had a great impact on many sectors, including the garments and textiles sector, especially in the production activities of garments and textiles enterprises.
Mr Hong said that in the context of the weakening dollar and rising prices, if an enterprise exports worth US$10 million, it will suffer losses of VND10 billion. In addition, soaring prices have forced enterprises to increase workers salaries to ensure their standard of living.
Phung Dinh Ngo, director of the Binh Hoa Garment Company said that it was rather late to hold a seminar on the issue. Although the garments and textiles sector has not made a lot of profit, it has generated nearly two million jobs and has greatly affected social welfare. Therefore, it is necessary for the sector to get some assistance from macro-economic management agencies to overcome the current difficulties.
Leaders from most of the enterprises said that the enterprises should save themselves first. Han Phuc Sinh, director of the Maika Garment Company put forth two solutions. First, businesses should restructure their production activities with fewer workers with a higher efficiency. Second, it is necessary for businesses to receive assistance from the government to overcome the current difficulties.
Nguyen Thi Phuong Quang from the Long An Garment Export Joint Stock Company said her company is now caught in a dilemma. The company began construction of two garment factories in October 2007, recruiting around 1,700-2,200 workers.
“If we earn a monthly revenue of US$400,000, we will suffer loss of around VND200 million. However, our company has already purchased 85 percent of the construction materials”, Ms Quang said.
She added that in the current situation, if some businesses are rushing to borrow US dollars instead of Vietnamese dong due to the lower interest rates, they will encounter further unexpected issues. According to the latest information, there have been a number of positive signs over the US dollar exchange rate, and the US stock market has begun to improve, said Ms Quang.
Ngo Trung Kien, director of the Sai Gon Garment Joint Stock Company said this is the first time his company has been hit by fluctuations of the market economy. While waiting for solutions from a macro-economic management level, businesses should take measures to increase productivity by focusing on promoting investment and changing the currencies for payment.
Diep Thanh Kiet, deputy chairman of Agtek said the association will propose some solutions to overcome the situation. First, banks should buy back US dollars from export contracts with the highest trading band. To promote export-import activities, banks should offer loans at the lowest trading band. In addition, it is necessary to abolish the collection of trade union fees and other kinds of fees to increase workers salaries. Currently, the government is collecting opinions from enterprises to make amendments to the draft law on Corporate Income Tax. It needs to reduce corporate income tax this year.
Pham Xuan Hong said all solutions should be based on common principles between businesses, workers, consumers and the State. Thanks to that, there should be proper measures in line with the requirements and fluctuations of the market.
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