Many Vietnamese textile and garment makers are encountering losses, mainly due to rising input cost and loan interest rates.

In the first half of this year, some local textile and garment companies reported a combined loss of 7.8 billion Vietnamese dong (VND) (nearly 500,000 US dollars), according to the Vietnam Textile and Apparel Association (Vitas) on Tuesday.

Increasing prices of oil, raw materials and accessories in the world market pushed input cost of local textile and garment enterprises up 5-10 percent in mid this year compared with late last year.

The average interest rate for medium-term loans has rose to 9.3 percent now from some 8 percent last year, the Vitas said, adding that local textile and garment producers had to pay a total loan interests of 215 billion VND (over 13.6 million US dollars) in the first half of this year.

With the high input cost, export prices of local textile and garment products are 5-10 percent higher than the similar products of other regional countries.

Vietnam earned more than 2.5 billion US dollars from exporting garments and textiles to over 100 countries and regions, including the European Union, the United States and Japan, in the first 7 months of this year, posting a year-on-year rise of 0.2 percent.

It has targeted total garment and textile export turnovers of 5 to 5.2 billion US dollars this year, up from nearly 4.4 billion US dollars last year.

By late 2003, Vietnam had 1,050 garment and textile enterprises with a total workforce of more than 2 million. By that time, the country's garment and textile industry had attracted nearly 400 foreign-invested projects with a total registered capital of roughly one billion US dollars.

Source: Xinhua