Industry 4.0 a threat to textiles sector

The fourth industrial revolution (Industry 4.0) will present a challenge for Vietnam’s textiles and garment sector within the next five years, according to Mr. Le Tien Truong, CEO of the Vietnam National Textile and Garment Group (Vinatex).


Automated production systems in the sector are yet to meet the requirements of Industry 4.0, he said, in particular the application of big data, the Internet of Things (IoT), and artificial intelligence (AI).

“Industry 4.0 will create very rapid changes and unpredictable factors in the economy,” he went on. “If there are no careful preparations, production systems in the sector will not be sufficiently competitive to adapt to the changes. This will be a major challenge within the next five years.”

In the 2017-2020 period, he believes, Vinatex must pay more attention to research and apply the technological achievements of Industry 4.0, improving workplace productivity.

“The most important thing is ensuring the group is not excluded from global chains,” he said. “It will be difficult to achieve this goal as it requires the group focus on the development of resources.”

2017 will be a year with many challenges for Vietnam’s textiles and garments. The only positive signs in the first quarter were the recovery of main markets such as the US, the EU and Japan and growth of 12 per cent year-on-year.

If there are few fluctuations in the economic and political situation, Vietnam’s textiles and garment sector may see growth of more than 10 per cent this year. Favorable circumstances are the key factor for enterprises under Vinatex to have an effective year, Mr. Truong said.

Vietnam’s textile and garment exports failed to reach the targeted $29 billion in export turnover in 2016.

Export turnover was estimated at $28.5 billion, up 5.4 per cent year-on-year but short of the $29 billion target, which was previously $30-$31 billion. “Growth is at its lowest since 2010,” Mr. Truong told VET. “But growth in absolute value was higher than in previous years.”

Vinatex’s business performance was disappointing in 2016. Industrial production value increased just 3 per cent, to VND37.7 trillion ($1.65 billion), while export turnover of VND2.47 trillion ($108.6 million) was up 4 per cent.

Total revenue reached VND40.5 billion ($1.78 million), up 3 per cent, and pre-tax profit stood at VND1.43 trillion ($62.9 million), up 9 per cent. Main markets such as the US, Japan, and South Korea saw single-digit growth.

Vinatex aims to maintain growth of 13 to 15 per cent this year, with exports totaling $4 billion.

by Quynh Nguyen