Streamlining production costs to increase its competitive edge and stabilising labour should help Vietnam's garment and textile sector hit its US$5.4 billion export turnover target.

Many garment and textile companies posted strong figures last year, and are looking to build on that for 2006.

The Vietnam National Textile and Garment Corporation (Vinatex), the country's leading State-run garment producer, saw its total revenue hit VND16.2 trillion ($US1 billion) last year, up 10.9 per cent against 2004, with a 9.7 per cent rise in export turnover to US$896.7 million.

Vinatex's deputy general director Vu Duc Giang said that with last year's soaring raw material costs, Vinatex members managed to boost production and business efficiency, yielding a 151.3 billion profit, up nearly 61 per cent from 2004.

Viet Tien Garment Co notched up profits of VND35 billion, followed by the Phong Phu Garment and Textile Co with VND25 billion and the Nha Be Garment Co VND20 billion.

Vinatex acted to stabilise its labour force by ensuring 100,000 jobs, with an average monthly income of VND1.48 million per person.

This year, Vinatex, which has more than 50 member companies and subsidiaries, is looking to produce 570 million sq.m of silk, 137.6 million of knitwear and more than one billion items of apparel.

It will also seek to raise the localisation rate among its garment items to 45 per cent in 2005, with the aim of generating 12.4 per cent growth in export revenue.

Vinatex subsidiaries have focused on perfecting organisational structure and lessening production costs to increase their competitive edge.

Despite the EU's lift of the textile quota on Vietnamese garments, exports to this market remained stagnant, due to harsh competition from Chinese goods.

In addition, the US textile quota means the market remains limited, due mostly to inappropriate management from relevant ministries.

Giang said that Vietnamese garments face fierce competition in the US market against exports from 150 other countries, particularly duty-free goods from China.

Apart from that, the local textile and garment industry still suffers from an acute shortage of labour and the potential threat of dumping lawsuits.

He suggested that the sector improve communication and awareness to minimise the risk of dumping lawsuits, while tightening administration to stop a quota overlap on locally made garment products.

Viet Nam's garment and textile sector has targeted increased investment, as well as forming raw material centres and apparel-specific industrial parks to raise localised production capacity and material supplies.

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