Face the truth of the industry and foresee the future of the footwear industry.
Reduced orders, layoffs, bankruptcy, Vietnam's footwear factories have never faced such difficulties.
Currently, there are more than 500,000 workers in Vietnam whose jobs are affected, the number of people resigning, the number of unemployed people is up to 279,409 people and more than 17,003 people are on unpaid leave...
It's very difficult for factories and workers
Leather and footwear exports decreased by 13%
Currently, industries such as textiles and garments, footwear, wood processing, manufacturing and assembly of electronic components... are more difficult than ever.
In 2022, the leather and footwear industry has a total export value of 28 billion USD, an increase of 34.8% compared to 2021. In 2021, the export value of footwear products reaches 23.9 billion USD, an increase of 34.6%, accounting for proportion of 85.5% of total export value of the whole industry, accounting for 6.4% of total export turnover of the country.
However, after the first 5 months of this year, footwear export value decreased by 13.3% over the same period to nearly 8.2 billion USD.
Ms. Phan Thi Thanh Xuan, Vice President of the Vietnam Leather, Footwear and Handbag Association (Lefaso), said orders for the industry are currently down by about 30%, reflecting the current economic situation. The lack of orders has caused businesses to face difficulties and the workforce to be underemployed.
With no export orders, tens of thousands of workers had to quit their jobs even though they didn't want to, because at this point the factory couldn't stand it.
This situation is also partly reflected in the numbers stated in the report of the Ministry of Labor, Invalids and Social Affairs.
Helpless, I had to accept the order price reduction
"Due to the war between Russia and Ukraine, inflation in the US and around the world, the number of orders is decreasing and the quality of orders must be increasingly improved."
Mr. Tran Anh Long, representative of KIDO Vinh Garment Company, said: "Along with that, due to competition for orders, large companies with many workers have to accept discounts in unit prices."
According to Mr. Long, inflation leads to increased prices, combined with increased bank interest rates, businesses having to increase input costs, and orders having to lower prices, causing textile and fashion businesses to face many difficulties. To overcome difficulties, we continue to invest in technological innovation, improve quality standards, and invite partners to review conditions to get more orders.
In Nghe An province, there are many textile and garment enterprises with orders mainly exported to the United States.
For example, the export turnover of Minh Anh Do Luong Garment decreased by 57.4%, Minh Anh Kim Lien decreased by 43.4%, and An Hung Garment decreased by 80.6% compared to the same period in 2022.
Some textile and garment enterprises order from designated parent companies in Asia, the turnover is still quite stable such as Kido Vinh Garment, An Nam Matsouka Garment... As for yarn products, in addition to the general decline in demand, China's The country's opening up is also a challenge, as Vietnamese businesses have to compete with Chinese businesses after a long shutdown due to the COVID-19 pandemic.
8,644 companies face layoffs, jobs of 500,000 employees affected
Currently, there are 8,644 companies facing difficulties and having to lay off workers, of which businesses with foreign direct investment capital are 27.4%; non-state enterprises is 72,18%; The enterprise has state capital of 0.39%.
The Southeast, the capital of factories manufacturing exported goods to supply globally, is where businesses cut the most labor at a rate of 66,75%, of which the Red River Delta accounts for 12.4%, the North Central and Central Region. 7,75% along the coast, the rest are scattered in the Central Highlands and Northern mountainous areas.
More than 500,000 workers have their jobs affected, with 279,409 people quitting and losing their jobs (accounting for 54,791 TP3T of affected workers); 195,039 working hours were cut, more than 17,003 people quit without pay and the number of employees whose labor contracts were suspended was 8,346 people.
Of the total 279,409 workers who quit and lost their jobs, the textile and garment industry has 68,782 people, the leather and footwear industry has 31,653 people and the components and electronics manufacturing industry has 45,075 people.
"Businesses lack orders due to economic difficulties in other countries, high inflation, and tightening monetary policies, causing purchasing power to decrease, especially fashion items, clothing, shoes, personal electronic devices... Many domestic businesses are facing a large amount of inventory that cannot be exported, and there are no new orders", Ministry of Labor, War Invalids and Social Affairs.
Orders decreased, market signals are unclear, the enterprise employing the most workers in Ho Chi Minh City is PouYuen Vietnam Co., Ltd., 100% with foreign direct investment with more than 50,000 workers, after laying off more than 2,300 people in February, will reduce nearly 6,000 workers.
Translation: Raw materials for the leather, shoe and handbag industry Alran-0399389514
Source: Author Vuong Dung Quan