SOURCING AND COSTING OF APPAREL PRODUCTS

APPAREL MERCHANDISING

END TERM JURY

MERCHSNDISING AND MANUFACTURING OF POLO T SHIRT IN

VIETNAM

SUBMITTED BY -
AKANKSHA KUMARI – BFT/18/1627
KARTIKEY SHAKYA – BFT/18/1275
SHIPRA YADAV – BFT/18/1360
SNEHA MAHTO – BFT/18/1157

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 CONTENT

SR. NO. TOPICS PG. NO.

1 INTRODUCTION 3
2 TECHNOLOGY USED IN TEXTILE INDUSTRY OF VIETNAM 5
3 SPINNING, WEAVING, KNITTING, DYEING, AND FINISHING MILLS IN 9
VIETNAM
4 EXPORT OF VIATNAMESE GARMENT AND TEXTILE 10
5 MAIN PRODUCT CATEGORY AND EXPORT MARKETS 10
6 TEXTILE AND GARMENT SUPPORTIVE INSTITUTION IN VIETNAM 11
7 CHALLENGES OF VIETNAM TEXTILE AND GARMENT INDUSTRY 11
8 IMPORT OF FABRIC IN VIETNAM 14
9 FABRIC CHARACTERISTICS 15
10 SUPPLIERS OF PIQUE COTTON FABRIC IN VIETNAM 16
11 PRODUCT DESCRIPTION, SPECIFICATION, COMPANY OVERVIEW 17
12 PROCESS FLOW CHART OF POLO T SHIRT 20
13 LIST OF POLO T SHIRT MANUFACTURING INDUSTRIES IN VIETNAM 21
14 SUPPLIERS OF KNIT FABRIC IN VIETNNAM 23
15 LABOUR PRODUCTIVITY OF VIETNAM 24
16 WAGES COMPARISON BETWEEN COUNTRIES 25
17 IMPORT AND EXPORT COMPARISON BETWEEN COUNTRIES 27
18 COMPARISON OF FABRIC MANUFACTURING STRENGTH 28
19 TECH PACK OF POLO MEN’S T SHIRT 31
20 TRIMS 31
21 COSTING AND WAGES 31
22 CMT 36
23 COST SHEET 37

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 INTRODUCTION

According to Le Hong Thuan (2017), Vietnam's textile and garment industry is actively
developing and, to play an increasingly important role in the development of the national
economy. Therefore, the efficiency of the business, as well as the occurrence and
development of textile and apparel businesses to have a significant impact on the socio-
economic development of the socialist republic of Vietnam. Over the past few years, the
textile and the clothing industry has maintained a high level of export sales, with an average
annual growth rate of approximately 15% of the year, about 15 percent of the country's
total export revenue.

Vietnam is one of the world's fourth-largest exporter of the textile and clothing manufacture
in the world, after Australia, China, India, and Bangladesh, especially in the economic crisis
from 2008 to 2014. In addition, 1.6 million people were involved in the textile and clothing
industry, half a million people, more than 12 percent of the industrial labor force, and it can
be said to be in the 5% of the country's total labour force, improving the standard of living
and social stability. In addition, the exports of textile and clothing products, attract foreign
money to invest in the engineering and the modernization of the production process.

OVERVIEW OF VIETNAM TEXTILE AND APPAREL INDUSTRY

The garment and textile industry is one of the key industries in Vietnam with the second-
largest export turnover in the country. In 2019, the industry’s export value contributed to 16
percent of total GDP. In the past five years, the textile industry has continuously grown at an
average rate of 17 percent annually.

In 2019, Vietnam’s garment and textile industry earned US$39 billion from exports, a year-
on-year increase of over 8.3 percent, according to the Vietnam General Statistics Office.
Garment manufacturing accounts for the majority of businesses, at 70 percent. Major
factors driving the growth of the market are low labor costs and growing textile exports to
the EU, the US, Japan, and South Korea.

Vietnam’s garment and textile industry consist of 3 sub-sectors: upstream sector (fibre
production), midstream sector (fabric production and dyeing), and downstream sector
(garment manufacturing).

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Sub-sectors that produce fibres or fabric are mainly used for domestic consumption because
of the low quality. Downstream sector of garment manufacturing accounts for around 70
percent of the total apparel and textile sector in Vietnam with Cut-Make-Trim (CMT) models
being the main activities. In 2019, CMT accounted for about 65 percent of total exports,
while the more advanced business models, like Original Equipment Manufacturer (OEM)
and Original Design Manufacturer (ODM) accounted for only 35 percent.

The US, Europe, Japan, and South Korea are the main export destinations of Vietnam’s
textile and garments products. Although Vietnam has a huge potential for cotton cultivation
and production, the textile industry imports most of the cotton inputs. In 2019, Vietnam
imported up to 89 percent of fabrics, of which, 55 percent were from China, 16 percent
from South Korea, 12 percent from Taiwan, and 6 percent from Japan.

Image: Vietnam’s textile and garment industry

MARKETS AND PRODUCTS

Vietnam’s textile and clothing products are sold both in domestic and foreign markets. In
domestic market, the products are sold in markets, retail stores, supermarkets, trade

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centres and accounts for 14% and are also exported to more than 180 countries and
territories worldwide (Le Hong Thuan, 2017).

SUB-SECTORS OF TEXTILE AND GARMENT INDUSTRY

Vietnam’s garment and textile industry consists of 3 sub sectors, they are:

Up-stream sector which is fiber production

Mid-stream sector which is fabric production and dyeing

And down-stream sector which is garment manufacturing

Main materials use in this industry are cotton, synthetic fibre, woollen, filament and silk.
Initially, sub sectors that produced fibers or fabric were not quality products and these
were textile products mainly used for domestic consumption. Although Vietnam has huge
potential of cotton cultivation and production, the local source supplies only less than 2% of
the total cotton requirements and the textile industry imports huge cotton from outside.

In the early stages of the export attention, garment manufacturing in Vietnam was based on
a CMT (cut, make, and end) basis earing a very low additional like Cambodia. Eventually,
with the emergence of new areas of for the industry, and the country has created a larger
value of the textile and clothing industry.

TECHNOLOGY USED IN TEXTILE INDUSTRY OF VIETNAM

FIBRE SPINNING TECHNOLOGY

In 1996, socialist republic of Vietnam was changed to a market-based economy, and for the
modernisation began. Therefore, the spinning industry, the improvement of technology, to
replace the old ones were, and the replacement of 800,124 spiders and 3520 rotors were
changed. The production capacity has increased to 72,000 tonnes instead of the 60,000
tons. The industry has modernized its production lines by using automatically assembling
machine and microelectronics chip to control fiber quality.

SHUTTLE WEAVING TECHNOLOGY

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Weaving technology has a big change in the market eсоnоmy. In 1996, Vietnam had
10,500 weаving machines, many оf these reрlасed with newly imported machines. The
industry wаs renovated аррlying the following technologies:

100% cotton weaving technology to produce fabric for clothes, cotton towel, mosquito net;

• Synthetic weaving technology to produce silk – imitated fabric, wool – imitated fabric,
product made of Microfiber;

• Cotton- polyester mixed weaving technology;

• Silk and woolen technology;

• Denim weaving technology

CIRCULAR KNITTING

Before 1996, the industry equipment is out of date. After 1996 Vietnam imported new
technology machines which were controlled by computers from Japan, Korea, Taiwan and
Germany and these equipment is still working in the industry.

SPINNIG, WEAVING, KNITTING, DYEING AND FISNISHING MILLS in

Vietnam

Vietnamese spinning, weaving and knitting industry’s capacity utilization is around 70-80%
and for dyeing and finishing industry is around 50-60%.

SPINNING MILLS

Currently, there are 145-spinning mill, with about 4 million spindles with production
capacity of 350,000 tonnes per year. The Spinning plant, which is owned by a foreign direct
investment (FDI) has been with a production capacity of approximately 90,000 tonnes per
year.

WEAVING MILL

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Vietnam having more than 401 weaving mills with around 22,000 weaving machines with
production capacity of 1000 million square meters of weaving fabric. The Total capacity of
the foreign owned weaving mills are more than 40% of the fabrics, with an annual
production capacity of more than 420 million square meters per year.

KNITTING MILL

Currently, 105, knitting factories, operates 3,800 circular knitting machines, and the total
capacity of the round-knitting factory is 200,000 metric tons. In addition, Vietnam also
produces other types of knitwear, such as curtains, socks, etc

DYEING AND FINISHING MILL

In Vietnam, there are 94 textile dyeing and finishing industries, with more than 1109 dyeing
machines exported from both Europe and China, which is able to take, process, and finish of

700 million square meters of fabric.

GARMENT INDUSTRY IN VIETNAM

Vietnam’s textile and apparel industry has maintained a rapid development in last15 years.
At present, the garment sector is the largest contributor to the country’s total export

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income. The industry has continually invested in and changed the equipment and
technology in order to meet the demand in the global market, as well as to improve
competitiveness in the world.

In Vietnam, garment industry is dispersed into the Region. About 58% of the company, are
located in the north-east of the Region, and 27% in the Red River Delta, from 7% in the
North-Central and Central Coast regions, and 4% in the Mekong River delta, and the
remaining 4% in the Northern, Central, and Mountain areas and in the Highlands.

Today, the textile and clothing industry is the result of the investment initiative taken over
the past ten years. From 1997 to 2006, Vietnam has experienced large-scale investments in
order to move into a more modern production techniques. Up to now the industry employs
approximately 2 500 company with nearly 2 million workers, of whom 1.1 million are
directly, and the rest are indirect jobs.

Some stats of Vietnam garment industry

 2,500 garment export-oriented factories are operating with VITAS, 77% of which are
owned by the public sector partnerships, limited liability companies, 18.5%to 100%
foreign direct investment (FDI), a 0.5% state and 5% local co-operative.
 There are 2 million labours are employed out of which 1.1 million labours are direct
labours and rest others are indirect labours and 80-85% are female.
 Minimum wages of skilled worker are between US$140-200 per month and for
unskilled it is US$ 50-60 per month.
 Most common products manufactured are t-shirt, shirt, polo shirt, trouser, children
wear, underwear and swimming wear, workwear etc.
 Russia, Japan, EU and USA are main markets

CAPACITY UTILZATION AND PRODUCTION ORIENTATION OF

GARMENT IN VIETNAM

CAPACITY UTILIZATION

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2400 million unit per year is the production capacity of garment in Vietnam garment
industry. Of all the factories that are fully occupied with the corresponding export order are
working at full capacity, particularly at nine or ten o’clock. Spinning, and dyeing and finishing
factories work in three shifts.

PRODUCTION FUNCTION

The factories work with full range of supply chain, from yarn to ready garment but for
cotton production raw cotton are imported from different countries. Subcontracting are also
practiced in private owned factories with limited capacity where producer s earn only 20%
of net price and rest 80% goes to buyers and middle man providing materials, accessories
and design. In Vietnam, there is an international manufacturing triangle where Foreign
Customers, Vietnam’s producers and Asian intermediaries are involved like Japan, Taiwan,
Korea, Hong Kong and China.

PRODUCTIVITY

In Vietnam garment industry, labour productivity is higher than Cambodian and Bangladeshi
factories but slower than China.

LEAD TIME AND DELIVERY PERIOD

If raw material is locally soured than production lead time will be 60days because local
textile industry take longer time to deliver required quality fabric but if it is imported than it
will take 30-35 days.

WORKER WAGES

Minimum wages of skilled worker are between US$140-200 per month and for unskilled it is
US$ 50-60 per month

EXPORT OF VIETNAMESE GARMENT AND TEXTILE

In 2007, export of Vietnamese textile and garment was US$ 7.75 billion, and in 2008, it has
come to US$ 9.11 billion, registered around 18% growth over the previous year. In 2009,
export earnings from textiles and garments reached US$ 9.13 billion. In short, the textile

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and garment sector has made a remarkable contribution to the economic development of
Vietnam. With more than 2 million people involved, the industry contributes significantly to
the export earnings. Export growth since 2001 has been steep. It was particularly strong in
2003 at 33% and in 2002 at 40%, but growth slowed in 2005 to just 10%. This was due
mainly to the fact that quotas restricting imports from other Asian countries were
eliminated at the beginning of the year, but imports from Vietnam into the USA ‐ Vietnam’s
largest export market ‐ were still subject to quotas. US retail buyers therefore turned to
countries such as China and India for their clothing. In 2006, however, the USA implemented
safeguard quotas on several categories of Chinese textiles and clothing, with the result that
buyers returned to Vietnam. As a result, Vietnamese exports soared by 20.6% to US$ 5.927
million.

MAIN PRODUCT CATEGORY AND EXPORT MARKETS

Knitted garments typically include items such as T-shirts, Polo-Shirt, Sweat Shirts and
Sweaters. Woven garments are Trousers, Shirts, Jackets, Skirts, Children wear, Dress,
Blouses, Underwear and Nightwear, Jeans Pants, Sportswear, etc. are normally classified as
woven fabric based garments as they tend to use more woven fabrics than knitted fabrics.
For both types of garments, the US market is its largest importer, with a particularly high
share in the export of woven fabric based garments. In Vietnam, all reputed buyers place
orders, namely H & M, Levi Strauss, Sears Holdings (Sears and Kmart), GAP, ADIDAS, Target,
VF Jeanswear, Matalan, Blue Star, Nike, and JC Penny, PVH, C&A, Wal-Mart, Kohl’s MGT,
Children’s place, The William Carter, M and Sand American Marketing.

TEXTILE AND GARMENT SUPPORTIVE INSTITUTION IN VIETNAM

The Vietnam Textile and Apparel Association (VITAS) is a non‐governmental umbrella

association working in the field of textile and garment industry in Vietnam with 15 branches
in Vietnam and in total of 635 members, account for 70% of the total capacity of the

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industry. VITAS promotes business and investment cooperation as well as exchanges
information among members, between members, and the outside. Furthermore, VITAS
represents its members and consults relevant the State and Government bodies in policy
campaign and mechanisms relating to the development of the Textile and Garment industry
in Vietnam. The VITAS represents Vietnamese textile and garment Page 24 of 34 industry in
international organizations and tries to be a bridge of cooperation between the domestic
industry and the outside world. The VITAS also supports foreign companies in looking for
Vietnamese textile and garment producers.

The Vietnam Textile and Garment Group (VINATEX) is the biggest state–owned group of
companies in the field of textile and garment in Vietnam. VINATEX is also a member of
VITAS. It has over 90 member companies in Vietnam which together cover activities from
spinning, knitting, weaving, and dyeing to finishing. The total labor force of the VINATEX is
nearly 100,000 employees and another 35,000 employees working in joint‐ventures with
foreign and local partners. The production capacity of the VINATEX is 100,000 tons of spun
yarn, 250 million square meters of fabrics, 350 million pieces of woven garment, 80 million
pieces of knitting, 200 million pieces of garment, and 15,000 tons of raw cotton6 6 Vietnam
Textile and Apparel Association, Quality – Credibility publication, 2007 .

CHALLENGES OF VIETNAM TEXTILE AND GARMNET INDUSRTY

STRENGTHS AND OPPORTUNITIES FOR VIETNAM

- With abundant and skillful labors at relatively low cost, Vietnam textile and garment
enterprises can produce complicated styles high quality, high value added and
branded products.
- 80% of equipment in the garment branch are renovated and modernized, satisfying
the requirements of foreign textile and garment importers.
- Capacity has been increased in the area of garment and spinning production
- Products quality and orders implementation capacity have improved and thus able
to attract foreign customers i.e. big importers and retailers
- Vietnam ranked within top 10 biggest textile and garment exporters in the world

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 - Increased trend of relocation of textile and garment production from developed
countries such as Taiwan, Korea to Vietnam and thus attracts capital, technology,
management experience to develop textile and garment industry.
- Many garment enterprises are well-organized, large-scale having good experiences
in production and export can satisfy all management and social standards and build
up close and stable relationships with many big consumption groups in the world.
- Vietnam is close to the main fabric and accessory sources in the world.
- Vietnam is appreciated as a stable political and safe social destination, attracting
businessmen and foreign investors.

MAJOR CHALLENGES FACED BY VIETNAM TEXTILE AND GARMENTS

INDUSTRY

- Seaport is over utilized and limited warehousing facility cannot accommodate a large
quantity of export items to be shipped
- Bribery and toll collection exist while the goods are transported for export
destination through seaports or airports
- Textile backward linkage industry are still not very developed, 70% of raw materials
are imported from abroad, resulted in inactive production and limit the quick
response ability.
- Labor productivity is low compared to China, and products are not diversified.
- Many enterprises haven’t paid proper attention to building up long-term
development strategy; as a result, the stable development is limited.
- Most of enterprises are in small and medium size (SMEs) with low investment capital
mobilization and limited ability of innovating technology and equipment.
- Human resource training of middle and high class management, technology, and
fashion design are weak.
- Marketing and trade promotion are limited, fashion design, building up and
developing trademark are not much cared

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- More trade and technology barriers such as the regulations of chemical safety
product law, import monitoring programs given by import countries, created
difficulties and higher cost for the suppliers.
- International competition, especially from powerful textile suppliers such as China,
India and Bangladesh are getting severer and severer.

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 FIBRE CONTENT – 100% COTTON

VIETNAM IS MAINLY DEPENDENT ON IMPORT OF COTTON FABRIC

Vietnam soon became a world leader in the export of textiles and garment. The expansion
will continue. Over the past few years, investment strategies in the country have helped
lead to the opening of new textile companies, each with 100,000 or more spindles.

However, cotton production in Vietnam has little chance of keeping pace with the strong
textile industry. The farm is limited, and while further product development is possible,
Vietnam will still rely on the import of cotton to keep its textile and clothing sector on track
for growth.

Imports of cotton continue to increase in Vietnam as the country’s textile and clothing
industry grows and requires the expansion of cotton yarn, mainly from China. Consumption
of Vietnamese cotton has increased by an average of 22%. The country is the fifth largest
exporter of garment in the world, and textiles and garment sector is Vietnam’s second
highest earning sector.

While Vietnam is producing its own cotton, this production is not strong enough to meet
current demand, and it is estimated that amount will decline over the next few years
despite the increase in exports of cotton products. There are many factors that contribute to
this decline, both internally and externally.

The price of international cotton is declining, and the cost of cotton production in Vietnam
has not been competitive. In addition, other cash crops such as cassava, cashew, coffee, and
maize are on the rise, and they are more profitable than cotton. The national government
provides a few incentives to cotton farmers, making the profit uncertain. It is estimated that
the cotton field will soon fall to less than 1,000 hectares.

According to foreign sources, the USDA has reported that cotton consumption has declined
in the US but production has increased. The US has been Vietnam’s largest supplier of raw
cotton for several years now, and this abundance of cotton could cause prices to continue to
fall, giving Vietnam a huge incentive to import. Similarly, China imports much less cotton
than ever before, contributing to the rest.

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Vietnam’s largest suppliers of cotton, outside the US, are currently India, Brazil, Australia
and Cote d’Ivoire. Together, these five countries make up about 70% -80% of Vietname’s
cotton imports.

FABRIC CHARACTERISTICS

Fibre content 100% cotton

Fabric type Pique cotton
Surface design Plain ribbed like texture
Finishes Colour fastness
Water repellent
Anti pilling
Anti shrinkage
Anti wrinkle
GSM 200 GSM
Knit Pique knit
Construction Pique Knit fabric where interlock is knitted to
first and fourth courses, while second and
fifth courses are half-gauge jersey courses on
one side of the fabric, and third and sixth
courses are half-gauge jersey courses on the
other side

Pique refers to a style of knitting

characterized by interlocking threads that
are raised. Knitted mainly from cotton, the
pique fabric is breathable and durable and
ease of maintenance, as its dobby texture
does not show sweat spots.

SUPPLIERS OF PIQUE COTTON FABRIC IN VIETNAM

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NAME MATERIAL WEIGHT PATTERN SUPPLIER PRICE
High quality 100% cotton 220gsm Plain dyed CASALIA 151-
pique fabric 264/meter
Premium 100% cotton 150-250 gsm Plain dyed DAI CAT 219-
quality TUONG IAT 370/meter
Vietnam CO., LTD
pique fabric
Pique fabric 100% cotton 180 gsm Plain dyed THAI SON’s S.P 197-
SWEING 209/meter
FACTORY
Good quality 100% cotton 200gsm Plain dyed JD 151-
pique fabric COLLECTION 188/meter
LTD
Pique fabric 100% cotton 150-250gsm Plain dyed NHAN VIET ICS 219-
JSC 370/meter
Pique fabric 100% cotton 180-220gsm Plain dyed PHONG PHU 177-
TRADING & 206/meter
INVESTMENT
PROOTION JS
CORPORATION

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 MEN’S POLO T – SHIRT

Manufacturer/factory: DONY GARMENT COMPANY

Port: Cat Lai port (Ho Chi Minh City)

PRODUCT DESCRIPTION

Material – 100% cotton

Fabric weight – 250 GSM

Colour – Blue

Features – Anti-Shrink, Anti-Pilling, Sustainable, Quick Dry, Anti-Wrinkle

Logo – Customised LOGO Printing

PRODUCT SPECIFICATION

Place of origin Ho Chi Minh City, Vietnam

Model Number DN7
Collar O – neck
Available Quantity 3000
Techniques Dyed
Design Patterned
Function Dry Quick
Description Custom Made Printing
Sleeve Style Short Sleeve

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Pattern type Plaid
Fabric type Knitted
Sizes available 5 XL, 4 XL, 3 XL, 2 XL, XS, S, M, L, XL, FREE,
6XL, XXS, CUSTOM
Brand Name Dony T Shirt

PACKAGING & DELIVERY

Packaging Details Carton Box Or Requirement

Port Cat Lai Port (Ho Chi Minh City)

LEAD TIME

Quantity(Pieces) 1 – 3000 >3000

Est. Time(days) 7 To be negotiated

COMPANY OVERVIEW

Business Type Manufacturer

Main products Polo T-Shirt, Shirt, Jacket, Hats, Protective
Clothes, Trousers & Skirt, Working
protection uniform, Face Masks
Total annual revenue US$ 1 Million – US$ 2.5 Million
Main Markets Southeast Asia – 85.00%
Mid East 10.00%
Eastern Asia 5.00%
Country / Region Ho Chi Minh, Vietnam
Total Employees 51 – 100 People
Year Established 2015
Product Certifications Textile Product

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COMPANY PROFILE

 Large area of 2 factory and workshops for sewing and embroidery

 Sewing factory have 3 production lines with more than 60 sewing machines
 Embroidery workshops with 4 silk printing machines, 3 heat transfer printing
machines and 12 embroidery machines of many types
 More than 20 reliable, trustable partners has long-terms cooperation
 Capacity for clothing – 50,000 unit per month
 Capacity for 3-ply cloth face mask – from 1,00,000 pcs to 2,75,000 pcs/day

PRODUCTION PROCEDURE:

1. Design
2. Sourcing material
3. Making pattern
4. Cut
5. Print/ embroidery
6. Sew
7. Button adding
8. Quality checking
9. Packaging

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 PROCESS FLOW CHART OF POLO T SHIRT

Collar making

interlining
sewing mark
attached on the sewing the two collar edge
around the
front part of the part of collar cutting
collar
collar

top stitching
collar bottom mark the mid
around the
cutting point of collar
collar

Placket making

interlining
attach on top stitch on bottom sewing
placket with placket mark
iron

Sleeve making

side seam of trimming of

sleeve hemming
sleeve sleeve

Body making and assembling

shoulder join
placket attach right side seam
with tape

bottom left side seam

sleeve attach
hemming with care label

back taping of
collar join bottom tack
collar

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 LIST OF POLO T-SHIRT MANUFACTURING INDUSTRIES IN VIETNAM

THAI SON S.P SEWING FACTORY

- Thai Son S.P Sewing Factory is one of the major sewing and clothing factories
situated in Ho Chi Minh City, Vietnam. The factory is known for producing a wide
range of garments using circular knitted fabrics.
- Thai Son S.P Sewing Factory produces garments for men, women, and children
(dresses, sportswear, T-shirts, and outerwear).
- Thai Son S.P Sewing Factory currently operates two factories located around the Ho
Chi Minh City with a production capacity equal with 250,000 pcs of T-Shirts per
month.
- Customers - United States & Canada, Russia, Europe, Australia

G & G II GARMENTS FACTORY VIETNAM

- G & G II Garments Factory Vietnam is rather unique in the sense that they are
specialized in offering private label clothing. With design offices in both the United
States and Vietnam, their in-house designers develop new styles each year.
- This is not that common in the textile industry, as most factories only make
productivity according to buyer design. That said, G & G can also make products
according to buyer designs.
- They opened their factory in Ho Chi Minh City back 2002, where they produce a wide
range of apparel designs for their customers in the US, Europe, and other countries.
- Products- Dresses, Pants, Sportswear, Suits, Jackets, Knitwear, T-shirts, Scarves

9MODE CLOTHING MANUFACTURER

- While many Vietnamese factories have a reputation for large MOQ requirements
and longer lead times, 9mode in Ho Chi Minh City is a small-buyer friendly option.
- 9mode has a lower minimum order quantity requirement, and specialize in making
custom designed clothing for their customers in the United States, Australia,
Singapore, and New Zealand.

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 - With more than 250 workers across all departments, their Ho Chi Minh factory has
been up and running since 2006. That said, 9mode also has a large network of
subcontractors that can take on various parts of production – while 9mode ensures
that the end product is matching your quality requirements.
- Products- Dresses, Hoodies, T-shirts and tops, Jeans, Swimwear, Sportswear

THYGESEN TEXTILE VIETNAM COMPANY LTD

- Thygesen Textile Vietnam Company Ltd is owned by Thygesen Textile Group, which is
a Danish company. Established in 1931, the head office of the Thygesen Textile
Group is based in Ikast, Denmark, but the Thygesen Textile Vietnam Company Ltd is
based in Hanoi, Vietnam.
- Formerly known as Thygesen Fabrics Vietnam Company Ltd, Thygesen Textile Group
established the factory in 2004. Thygesen Textile Group also owns factories in the
USA, China, Slovakia, and Mexico.
- Products- Activewear, Workwear, Kidswear, Casual Fashion, Underwear, T-shirt T.T.P
Garment Co., Ltd
- Established in 2008 and based in District 12 of Ho Chi Minh City, T.T.P Garment Co.,
Ltd manufactures woven and knitted apparel for both Asian and Western brands.

FASHION GARMENT LTD

- Also known as FGL, Fashion Garment Ltd is considered as one of the leading apparel
exporters in Vietnam. With 8400 employees and 4 manufacturing facilities, it is also
one of the largest manufacturers of export quality garments.
- FGL was founded in 1994 and the head office and manufacturing locations are based
in Dong Nai province. It is a subsidiary of Hirdaramani Group, which is a Sri Lanka
based company founded in 1891. Hirdaramani Group owns factories and subsidiaries
in Sri Lanka, the USA, and Bangladesh.
- Products- Crewnecks and Polos, Hoodies and Pullovers, T- shirts.

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QUICKFEAT

- Quickfeat International Limited is a global garment sourcing and manufacturing

company with its manufacturing units located in Vietnam, Hong Kong, India, and
China. It also has sales offices located in USA, UK, and other parts of the world.
- Quickfeat was established in 1994 as a subsidiary but in 1998, it became an
independent company. The head office is based in Hong Kong, but they also have a
large manufacturing unit in Vietnam.
- Products – Organics, Sweaters, Knits, Outerwear & Activewear

LTP VIETNAM CO. LTD

- LTP Vietnam Co. Ltd was founded in 2008 with a goal to produce high-quality active
functional garments and sportswear for international clients. The factory and head
office of the clothing manufacturer is based in Ho Chi Minh City.
- LTP Vietnam Co. Ltd is a subsidiary of The LTP Group, which is a global clothing and
furniture manufacturer based in Denmark. The LTP Group has 10 factories located in
Belarus, Ukraine, Lithuania, and Vietnam.
- Products - Organic Garments, Athleisure Garments, Active Sportswear, Outdoor

SUPPLIERS OF KNIT FABRIC IN VEITNAM

1. Esprinta (Vietnam) Co., Ltd.

Price offered – 1.60 USD

2. Hansae Vietnam Co., Ltd.

Price offered – 1.62 USD

3. Thanh Cong Textile Garment Investment Trading Joint Stock Company

Price offered – 1.56 USD

4. Damco International B.V

Price offered – 1.59 USD

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5. Khai Minh Global Co., Ltd.

Price offered – 1.63 USD

6. Han Sung Vina Co., Ltd.

Price offered – 1.61 USD

8. Alim Hanoi Co., Ltd.

Price offered – 1.59 USD

LABOUR PRODUCTIVITY OF VIETNAM

The industry and construction sector has the highest labour productivity in the economy. It
registered a relatively robust productivity growth in the 1990s but faced a decline and
stagnation in the first ten years of the twenty-first century (Figure 2.7). Within this broad
sector, manufacturing is a critical subsector occupying 46% of sectoral value-added in 2015
(Figure 2.8) and expected to play a vital role in job creation and economic growth and
transformation. However, its labor productivity has hardly increased since 2001, a
phenomenon which is shocking and deeply disappointing in an industrializing economy such
as Viet Nam

Vietnam Labour Productivity dropped by 8.23 % YoY in Dec 2019, compared with a growth
of 9.55 % in the previous year. Vietnam Labour Productivity Growth data is updated yearly,
available from Dec 2004 to Dec 2019, averaging at 11.52 %. The data reached an all-time
high of 26.09 % in Dec 2008 and a record low of 5.62 % in Dec 2015. CEIC calculates Labour
Productivity Growth from annual Labour Productivity. General Statistics Office provides
Labour Productivity. Nominal GDP is used for Labour Productivity calculation by source.

In the latest reports, Vietnam Population reached 97.62 million people in Dec 2020. Its
Unemployment Rate dropped to 2.50 % in Sep 2020. Monthly Earnings of Vietnam stood at
311.15 USD in Mar 2021. The country's Labour Force Participation Rate dropped to 72.30 %
in Jun 2020.

24
 Fig. Labour Productivity of Vietnam Country

WAGES COMPARISON BETWEEN COUNTRIES

One clear trend here is that China, even though it is the largest exporter of clothes and
textiles, is losing market share to the rest of the world. We guess that political uncertainty
and concerns about the trade war with America have a lot to do with that decline. As we’ll
talk about later, fashion executives are making it a priority to diversify away from China.

Bangladesh and Vietnam both seem to be gaining from China’s loss. Even though they’re the
second and third biggest exporters respectively, both increased their market share by over
three percent. Despite those gains, keep in mind how much more China exports than the
rest of the world, as it exports more than the rest of the top five combined.

These are some of our key findings:

- Though China is still the leading exporter of textiles and clothes, its market share is
decreasing. Other countries are worth exploring.
- The US pays garment workers more than Asian countries, but Mexico pays garment
workers even less than the Asian countries.
- Garment worker wages are increasing dramatically in third-world countries but is
relatively stable in the US and Mexico.
- There are trade-offs to be made between speed, cost, and ease of complying with
regulations.

25
 - Trade barriers are an increasing worry for fashion executives.
- Developing countries have more labour violations than developed ones.
- European countries do the best job at protecting the environment.

FIG. – Figure Showing Monthly Wages Of Garment Worker

TABLE -1 COUNTRY SHOWING MINIMUM WAGES OF WORKER

COUNTRY MINIMUM WAGES EUIVALENT USD $

Bangladesh 8,000 TAKA/MONTH $94/ MONTH

China 2,200 RM/ MONTH $332/ MONTH

Cambodia 741,279 RIEL/MONTH $182/ MONTH

India 8,609 RPS/MONTH $72 / MONTH

Indonesia 2,583,556 RUPIA/ MONTH $180/ MONTH

Myanmar 115,2OO KYAT/MONTH $89/ MONTH

Pakistan 12,000 PKR/ MONTH $75/ MONTH

Sri Lanka 75,601 LKR/MONTH $409/MONTH

26
 IMPORT AND EXPORT COMPARISON BETWEEN COUNTRIES

The global T-shirt marker is set to continue moderate growth in the medium term, according
to the new report, with the biggest gains to be seen in markets such as China – which is also
the world’s largest T-shirt producer.

POLO T-SHIRT EXPORT COMPARISON

The countries with the highest to lowest cotton T-shirt export are -

- Bangladesh: US$5.8 billion (18.3% of exported cotton T-shirts)

- China: $3.7 billion (11.7%)
- India: $2 billion (6.2%)
- Turkey: $1.8 billion (5.5%)
- Germany: $1.6 billion (5.1%)
- Italy: $1.4 billion (4.5%)
- Vietnam: $1.2 billion (3.8%)
- Netherlands: $1.1 billion (3.6%)
- Spain: $1 billion (3.2%)
- Honduras: $782.2 million (2.4%)

The listed 10 countries shipped 75.3% of global cotton T-shirts exports in 2018 by value.
Among the above countries, the fastest-growing exporters of cotton T-shirts since 2015
were: Honduras (up 168,115%), Italy (up 92.6%), Netherlands (up 79.1%) and Spain (up
73.1%). China was the lone top supplier to post a decline in its exported cotton T-shirts sales
via an -18.1% drop.

POLO T-SHIRT PRODUCER COMPARISON

Major producers are

- Bangladesh (12%),
- India (11%),
- Turkey (6%),
- Vietnam (3%),
- Cambodia (3%)

27
together comprising 74% of global Polo T-shirt production. However, Polo T-shirt production
is gradually shifted away from China to the other countries in Asa, where manufacturing
costs are significantly lower.

Cambodia (+40% per year), Vietnam (+12.8%), Bangladesh (+10.6% per year) and India
(+7.6%) have seen the most notable growth in Polo T-shirt production over the period from
2007 to 2016.

POLO T-SHIRT SUPPLIER COMPARISON

- China (25% of total exports),

- Bangladesh (13%),
- India (8%),
- Turkey (7%),
- the US, Mexico and
- Vietnam (4% each) were the main global suppliers of t-shirts.

From 2007 to 2016, Vietnam (+13.1% per year), Bangladesh (+10.6% per year) and India
(+8.6%) were the fasted growing suppliers amongst the major exporters.

COMPARISON IN FABRIC MANUFACTURING STRENGTHS

1) CHINA

The textile industry of China is the largest manufacturer and exporter in the world with an
export turnover of $266.41 Bn. The factors driving the industry are – low-cost production,
raw material quality, industrial structure, modern high-tech machinery, label development
and work process in domestic consumer and global market. In China, six sub-industries of
the textile industry include cotton, chemical fiber, wool textile and dyeing finishing industry,
textile - printing & dyeing finishing industry, linen textile, and silk textile & finishing industry,
finished textile product manufacturing as well as knitted and woven product industry. The
output volume of China textile industry accounts for more than half of the global market.

28
2) GERMANY

Textile and clothing industry of Germany has a long history of manufacturing, innovation,
and flexibility. Germany is one of the biggest exporters of knitted apparel cloth, manmade
fibre, synthetic yarn, and machinery with the export value of $38.99 Bn. The country is
world’s 2 nd largest textile exporter and well known for high quality products and
accessories of textile and clothing in the world. Over recent decades, the country has
transformed its production for low-cost high volume to high quality products.

3) BANGLADESH

In recent decades, Bangladesh has emerged as a powerhouse for apparel manufacturing.

The country’s strengths are low labour cost and vast workforce. Advance technology and
High-quality products have attracted many major global retail brands to Bangladesh. The
country is a leading textile exporter with a turnover of USD 38.73 Bn. Also, the vertical
capacities of Bangladesh, which helps global brands to ensure more transparency and
coordination in their supply chain. The textile industry of Bangladesh is growing rapidly with
the bulk order of value-added items of big global brands.

4)VIETNAM

The Textile industry of Vietnam has benefited producers and buyers diversify their supply
chains, backed by its low labour costs and industry focus on specialization, modernization
and increasing value addition. With an export turnover of USD 37.93 Bn, Vietnam is the top
4th global exporters of textile and apparel. The country's major focus is producing items with
high competitiveness in the global market and improving its garment and textile supply
chain. Vietnam’s textile and apparel consumption in the both domestic and global market
make deeper inroads into the textile market.

5) INDIA

The textile and apparel industry in India are among the world’s largest producers and
exports. Indian Textile Industry has broadly classified into two segments: First, the
unorganized sector consists of handloom, handicraft, and sericulture, which are operated on
a small scale practicing traditional tools and methods. The second is the organized one

29
which applies modern machinery and techniques such as economies of scale. High-cost
products add cost pressure on the value chain, making yarn, fabric and apparel exports less
competitive. India stands at 5th largest countries with an export turnover of $37.11 Bn. India
is using intensive technology for mass production of textile products – spinning, weaving,
processing, and apparel.

6) TURKEY

Textile and Apparel industry of Turkey has an important role in world textile trade with the
capability to meet the high standard and a broad range of products. Turkish production and
export of the industry have shifted from low value-added commodities to high value-added
manufactured items and fashionable goods. The export value of Turkey textile industry has
reached a value of USD 27.56 Bn. Turkey is booming the textile and apparel industry with
amazing design capacity, hi-tech solutions, dynamic and flexible production capacity, and
concern about quality, health, and environment.

7) UNITED STATE OF AMERICA

The United States is a globally competitive manufacturer and exporter of textile raw
materials, fabrics, yarns, apparel, home furnishing, and other textile products. The United
States is the 8th largest textile exporter with the exported value of USD 27.14 Bn. The
strength of US textile lies in Non-Woven, Specialty and Industrial Fabrics, Medical Textiles
and Protective Apparel. Also, the US is technically very advance in Textile and Apparel sector
which is making companies invest in the US textile market.

8) HONG-KONG, CHINA

Textile industry of Hong-Kong is well-known for its dyed and printed fabric. Also, the country
is one of the biggest manufacturers and exporter of cotton spinning, denim weaving, knit-
toshape panel knitting, and fine-gauge cotton knitting. With the exported value of USD
20.43 Bn, Hong-Kong is the 9th largest textile and apparel exporter of the world. Hong-Kong
has been moving up the market value scale catering to the domestic and international
market's demands with Original Design Manufacturer (ODM) and Original Equipment
Manufacturer (OEM).

30
TECH PACK OF POLO MENS T SHIRTS

TABLE: TECH PACK OF POLO MENS T SHIRT

31
 TRIMS
Even though Vietnam has a decent base to source raw materials in-country, many
components such as buttons and zippers still need to be sourced and imported from China.
This added step can often add as much as a month to the production time. The delays due
to shipping from China mainly affect the first order; by the second-order, the supplier can
order earlier so that you can have a faster lead time.

COST OF TRIMS

TABLE: table showing cost of trims

Category Price

Buttons Rs. 0.07/pc

Thread Rs. 48.83/spool
Wash care labels Rs. 0.76/pc
Size labels Rs. 0.76/pc
Brand label Rs. 0.76/pc
Rib Rs. 380/kg

OPERATION, SAM AND LABOUR COST OF POLO MENS T-SHIRT

Table: Cost Of Operation of T- shirt

S.N OPERATION OF SAM EFFICIENC LABOUR TOTAL

O POLO T-SHIRT Y (80%) COST/MIN(RS.) COST(RS.)
1. CARE LABLE ATTACH WITH 0.28 0.224 1.20 0.02688
BACK PART
2. PLACKET & BODY PART 0.30 0.24 1.20 0.288
MATCHING
3. PLACKET ATTACH 0.30 0.24 1.20 0.307
POSITIONING MARKING
4. PLACKET ROLLING 0.32 0.256 1.20 0.3648

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5. PLACKET ATTACH WITH 0.38 0.304 1.20 0.24
FRONT PART
6. PLACKET EDGE CUT &TACK 0.25 0.20 1.20 0.336
7. HALF-MOONCUT & IRON 0.45 0.36 1.20 0.432
8. MAIN LABLE &SIZE LABLE 0.35 0.28 1.20 0.336
9. HALF MOON ATTACHES 0.45 0.36 1.20 0.432
WITH BACK PART
10. FRONT & BCK PART 0.18 0.144 1.20 0.172
MATCHING
11. SHOULDER JOINING 0.33 0.264 1.20 0.316
12. COLLAR SERVICING 0.20 0.16 1.20 0.192
13. COLLAR MAKING 0.18 0.144 1.20 0.172
14. COLLAR ATTACH WITH TAPE 0.36 0.28 1.20 0.345
15. BACK TAPE TOP STITCH 0.30 0.24 1.20 0.288
16. LOWER PLACKET CLOSE 0.20 0.16 1.20 0.192
17. UPPER PLACKET TOP STITCH 0.20 0.16 1.20 0.192
18. PLACKET BOX STITCH 0.32 0.25 1.20 0.307
19. CUFF JOINING 0.42 0.33 1.20 0.403
20. CUFF TOP STITCH 0.20 0.17 1.20 0.211
21. SLEEVE PAIR MATCHING 0.38 0.30 1.20 0.3648
WITH BODY PART
22. SLEEVE JOINING 0.42 0.33 1.20 0.403
23. ARM HJOLETOP STITCH 0.30 0.24 1.20 0.288
24. BOTTOM HEM STITCH 0.32 0.25 1.20 0.307
25. SIDE SPILT TACK 0.27 0.21 1.20 0.259
26. SIDE SPILT ROLLING AND 0.47 0.37 1.20 0.451
TOP STITCH
27. SIDE SEAM 0.57 0.45 1.20 0.547
28. SLEEVE CLOSE AND OPEN 0.37 0.29 1.20 0.355
TACK
29. BUTTON HOLE CREATING AT 0.30 0.24 1.20 0.288

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 UPPER PLACKET
30. BUTTON ATTACH 0.20 0.16 1.20 0.192
POSITIONING MARK AT
31. BUTTON ATTACH WITH 0.25 0.20 1.20 0.24
LOWER PLACKET
32. BUTTON PUSH 0.18 0.144 1.20 0.172
33. FINAL THREAD CUT 0.30 0.24 1.20 0.288
TOTAL 10.32 8.26 39.6 9.90

Table : Direct Material Cost

DIRECT MATERIAL COST

S.N DESCRIPTIO UNIT OF COST(RS.) CONSUMPTION/ COST/

O N MEASUREMEN PIECE PRICE(RS.)
T
1. COTTON KGS 528.60/ 250 GRAMS 132.15
BLEND KG
KNITTED
FABRIC
3. BRAND PER PCS 0.76 1 0.76
LABEL
SIZE LABEL 0.76 1 0.76

4. WASH CARE PER PCS 0.76 1 0.76

LABEL
5. THREAD PER SPOOL 48.83 0.02 0.97

TABULAR KGS 380/KG 60 GRAMS 22.8

RUB FABRIC
BUTTONS PER PIECE 0.07 4 0.28

TOTAL MATERIAL COST 158.48

Table: direct expenses

34
 DIRECT EXPENSES

UNIT OF COST /PCS

S.NO DESCRIPTION COST CONSUMPTION
MEASUREMENT (Rs.)

1. CARTON BOX PER PIECE 4 0.05 0.20

2. POLYBAG PER PIECE 0.76 1 0.76

3. HAND BAG PER PIECE 0.35 1 0.35

PACKAGING
4. PER PIECE 580/DAY 0 0.82
LABOR COST

TOTAL DIRECT EXPENSES 2.13

Table: Direct Wages

DIRECT WAGES

S.NO OPERATION UNIT OF SAKILLED COST COST/PCS

MEASUREMENT MATRIX /UNIT
1. INSPECTION EFFICIENCY SKILLED 580/DAY 0.90

2. CUTTING EFFICIENCY SKILLED 580/DAY 2.20

3. PRINTING EFFICIENCY SKILLED 580/DAY 1.5

4. SEWING EFFICIENCY SKILLED 580/DAY 9.90

5. FINISHING EFFICIENCY SEMI-SKILLED 580/DAY 8.50

(WASHING
AND IRONING)
TOTAL DIRECT WAGES 23

CMT COST

35
= Cutting Cost +Stitching Cost +Printing Cost Finishing Cost

= 22.1 RS.

Overhead cost = 15% of CMT = Rs. 3.315

Total cost/pc=Direct Material +Direct labour +Packaging +Overhead Cost

=Rs. 158.48 +23 +2.13 +3.315

=Rs. 183.61

= 57346.85 Vietnamese Dong

=$ 2.48

Total Retail cost= total cost* multiplier factor

= Rs. 183.61 * 7 (multiplier factor)

= Rs. 1285.27

= 402746 Vietnamese Dong

=$17.39

Profit = 9% of Raw material + CM + Overheads

= Rs. 21.115

COST SHEET

36
 COST SHEET

PRODUCT - MENS POLO T- SHIRT COLOR - BULE

STYLE NUMBER - DN7 COUNTRY – VIETNAM

BUYER - U S POLO FABRIC – COTTON

SIZE – M

PARTICULARS DETAILS COST (RS.)

DIRECT MATERIAL 158.48

DIRECT WAGES 23
DIRECT EXPENSES 2.13
PRIME COST 183.61

OVERHEAD COST 15% 27.5415

TOTAL
211.15
OVWEHEAD COST

PROFIT 10% 21.115

TOTAL COST/ PIECE 232.27

TOTAL COST/ PIECE – RS. 232.27

= 72783.01 Vietnamese Dong = 3.17 $

REFRENCES :

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https://www.vietnam-briefing.com/news/seizing-investment-opportunities-vietnams-
textile-garment-industry.html/

https://www.ceicdata.com/en/indicator/vietnam/labour-productivity-growth

38