A country that has really captured the attention of the global apparel trade in the last one year, Vietnam registered exports worth US $ 27 billion in 2015 with target to cross US $ 30 billion in 2016! The amazing growth story of Vietnam is supported by many factors working to its advantage from a very disciplined and productive workforce to the adaptability and flexibility of production units to do small runs and complicated styles. Approximately 5,000 production units employing around 3 million workers are engaged in the apparel export industry and with TPP and GSP Plus arrangement under negotiations for the US and EU respectively, the only way forward is upward. In the backdrop of the first ever Denim show, the Denimsandjeans.com Vietnam, in HCM City, the Apparel Online Team discovers a vibrant and responsive industry, looking at denim as a relatively new but potential growth segment.
Already a very popular segment in Bangladesh, jeans manufacturing has recently become an interesting segment for both manufacturers and buyers. Yet, this does not mean that it will create a head-on competition for Bangladesh as the country is not looking at the volume market and is eyeing the high-end and extremely complex fashion segment where quantities are small but FOBs are high. Many of the buyers who visited the show were not really working in the segment but envisage a latent possibility. “In Vietnam, lot of business is CM-driven and we have not been able to crack orders for denim wear in this scenario, but if the industry is supported by good fabrics we can offer FOBs, which will help us secure business in the jeans segment,” said Jaime Lozano Zamacola of Tela Marinera Co Ltd ., a Thailand-based buying operation having a sourcing office in Vietnam. The office is sourcing for European buyers, and the product from Vietnam is mainly kidswear.
The large array of denim fabrics on display were a definite draw for many visitors with companies from India, Bangladesh, Pakistan, China and Vietnam showcasing their innovative best along with few technology and chemical providers. Each company had its own strength and price point, yet the common thread was the focus on R&D with ‘stretch’ being the imperative word. Lots of blends, washes and functional properties made each fabric different from the other. Appreciating the range of fabrics, Nguyen Dinh Truong, Vice Chairman, Vietnam Textile and Apparel Association said, “We are moving very fast in garments with around 9-10% growth year-on-year, but we do not have enough fabric to supplement the growth. While currently we produce only 1.5 billion metres of fabric, around 7.5 billion metres are imported annually. And as we grow the requirement will also grow, so exposure to quality fabric which can support our garmenting growth is a must.”
Though jackets, sportswear and ladies fashion wear are the biggest categories of exports for the country, denim is fast emerging as the new upcoming segment. The Asmara office has a special show wall only to showcase denim developments, which only goes to show how important the category is for the company and the potential that they see from Vietnam. Showcasing at the event Prosperity Textile from China, which is already supplying denim fabric to the industry, was very upbeat of the growth potential and is investing in Vietnam to build a new denim fabric mill with 30 million yards capacity, expected to start operation in mid-2017. “The country is a big market for denim fabric… We have some solid customers there, and have seen sales increasing substantially in recent years. Since Vietnam has lower labour cost when compared to China and also experienced workers, business from China is bound to shift towards Vietnam and we want to be prepared,” said Andy Zhong, Marketing Director, Prosperity Textile, China .
The company was showcasing its latest collections of S/S and F/W 2017 denim fabrics at the show. Lots of new inspirations like Stretch X4 (which provides 4-way stretch and ultimate freedom of movement), F2 Denim (powered by innovative technology to help you stay warm, cool, fresh and fit), Vintage Stretch Line (which combines heritage look with comfort stretch) besides very interesting light-weight fabrics for shirting, with 100 per cent cotton, Tencel and Linen were a huge draw at the event.
Visitors from buying offices like Hermes Otto, Asmara, Indochine, VF, Mitsui, Maximum Sourcing, Sudima International, Target and Creative Resources to name a few, visited the two-day event. All the buyers were very positive of future business from the country in general and also of denim. “The sourcing opportunities are on the increase in Vietnam and the way the FTA discussions with the EU is going on, we are confident that the GPS Plus advantage will be granted to Vietnam soon. Once that happens the business will boom,” said Nguyen Linh Chi, Business Development Executive, Garment Division, Hermes Otto International .
Though there is some confusion on whether Vietnam will be able to take advantage of the benefits from the trade agreements with the rule of origin in yarns and fabrics a mandatory provision, some industry experts shared that negotiations were also on to relax the norm for a few years till Vietnam could build its own backward linkages through both internal and foreign investments in spinning and weaving sector.
Many garment manufacturing companies that visited the show were happy with the displays and expressed the need for such events to enhance the growth of the garment sector even further. “We are supplying basic denim five-pocket jeans to the US market, and this is mainly because of the lack of fabric availability in the market. But now if we can have access to mills from around the world at competitive prices we can look at better quality jeans like some exporters from the country are already doing,” said Cao Tran Anh VU, Director, Nam Viet , a local garment exporter. However, Robert Nicholson, Chief Representative, More UK Limited , a buying operation having manufacturing facilities in Vietnam, was apprehensive of the quantities that companies entering the segment for the first time would demand and the viability of the same for international suppliers. “Vietnamese manufacturers prefer to work in small quantities, but many of the exhibitors I met were not open to working in such small order sizes, which could be a problem area in the initial stages.”
Some interesting displays by Indian companies…
Six Indian companies – namely Bhaskar, Malwa, Anubha, KG Denim, Mafatlal Industries and Nahar Group – presented their latest collections at the event and most of them were very happy with the response. “Response from the Vietnamese industry was encouraging. A select number of good companies visited and we were able to initiate with them,” said Rajesh Manwani, Senior General Manager – International Sales & Marketing, Bhaskar Industries . Adding to the thought, Ram Srinivasan, General Manager – Marketing, K G Denim Limited said, “Vietnam is a fast growing market and the event was a good platform to meet our potential customers at one place where we could show our entire range which we can’t carry to their individual meeting room.” The company had on display a complete range of trend-setting, quality and innovative products, both denim and non-denim (solid dyed) fabrics in shirting, tops and bottoms.
A relative newbie in the denim segment Anubha, displayed products and technology with focus on the concept of ‘Second Skin’ to portray the importance of flexibility in fields like sports and athleisure. “Our forte is in innovating new products keeping with the need and requirements of different markets as well as trending with popular concepts,” said Akshat Chaudhary, Director, Anubha Industries . He added that the event was a good meeting ground for serious industry players. “Vietnam has a big and potential market with its increasing number of garment manufacturing units and is amply backed by moderate labour costs. We are exporting to different countries already and are confident of catering to Vietnam soon,” added Akshat.
While Mafatlal, which is already supplying around 1,00,000 yards of fabrics yearly to Vietnam, took the opportunity to showcase its collection for S/S 2017 and A/W 2017-18, which included premium finishes and prints, jacquards, dobbies and blends; the latest A/W 2017-18 collections in denim that were innovative in terms of weaves, blends and finishes were appreciated at the Malwa booth. The collection at Nahar Group consisted of piece dyed fabrics, printed denim and yarn dyed cotton blends.
Positive response from Vietnamese industry prompts organisers to announce second edition…
For the organisers of the event, the happy faces of the participants on day two was a confidence-booster and Sandeep Agarwal, Founder of the highly successful Denimandjeans.com show series, formally announced a second edition in Vietnam though no date has yet been finalised. “We were confident that the show would attract buyers and industry, but what is most encouraging is that serious business discussions took place during the two days. This only heightens the expectation of the participants that a strong market for denim fabric exists in the country,” reasoned Sandeep. He adds that with lots of investments coming in from China and Taiwan in washing, the denim sector is going to expand giving fabric suppliers an opening to the huge market.
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