Vietnam Climbs Garment Supply Chain

Sadie Keljikian, Express Trade Capital

After a prolonged malaise, Vietnam’s manufacturing industry has re-emerged as a significant player in the global clothing supply chain. For years, the Vietnamese garment industry has suffered a shortage of local raw materials stymieing opportunities for growth. For instance, its garment economy requires 400,000 tons of cotton for production per annum yet only 3,000 of it is supplied by the local market. As such, the industry has had to rely costly imports.

Previously, Vietnamese manufacturers focused on developing and showcasing their specific strengths in the field, rather than devoting to develop a competitive advantage in the field. As a result, a combination of a lack of raw materials and minimal systematic assistance led to underwhelming profits and very little business growth.

No more. Industry analysts have proclaimed that Vietnam’s manufacturers have entered the “cutting and sewing“  stages of the global supply chain, meaning that the need to import raw materials will no longer limit the growth of the local garment industry. Supply chain integration will allow Vietnam to join other countries in the process of turning raw cotton, wool, etc. into finished garments while diminishing costs.

Several new factories and sewing plants will be built to accommodate the newly expanding industry, but it will be quite costly. The plan will, in all likelihood be easier to accomplish if the Trans-Pacific Partnership is fully passed, as the deal promises to eliminate or dramatically diminish tariffs and other trade-barriers among members.

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