Vietnam: Low cost & lack of textile & garment orders leading to lower wages for workers
"Textile and garment orders are only enough to cover labor wages of 6 million VND/month", 8 November 2023
The shortage of orders for the textile and garment industry is threatening the growth of the industry...Instead of receiving orders and working overtime...textile workers are now working on hold, reducing income.
Vietnam Textile and Garment Group - Vinatex in its financial report for the third quarter of 2023, said that orders are in shortage, Vinatex is forced to receive low-priced orders to ensure an average salary of over 8 million VND/month. Vinatex also said that with the price of orders received, the average salary of employees is only less than 6 million VND/month.
Vinatex has a total of 33 subsidiaries and 32 affiliated companies in the textile and garment industry, with a total of over 60,000 employees.
The salary of over 8 million VND/month has actually decreased significantly compared to 2022. Vinatex's 2022 annual report said that the average salary of the company's employees is nearly 9.7 million VND/month, up 14% compared to 2021.
Low order prices while total order value decreased "materially affected the Group's consolidated profit," Vinatex's explanation said.
Vinatex's revenue in the third quarter of 2023 decreased by 11%...However, low value orders and thin profit margins caused the company's gross profit to decrease by 16%, to VND 412 billion.
Most of Vinatex's employees are direct workers, salary costs are therefore included in product costs. Low value orders, while the company maintains a salary of over 8 million VND/month is the main reason why the company's profits are directly eroded.
Accumulating in the first 9 months of the year, Vinatex made a profit of VND 198 billion after tax, a deep decrease of 82% over the same period of 2022...
[Translation via Google Translate]