The US and EU markets are potential export markets for Vietnam’s protective gear and masks during the Covid-19 pandemic, according to Minister of Industry and Trade Tran Tuan Anh.

Production at Garment 10 Corporation. Photo: Thanh Hai.

Anh made the suggestion at a time when Vietnam’s key export sectors encounter a severe fall in demand as a result of the pandemic. Enterprises should take advantage of existing free trade agreements (FTAs) in search of new market opportunities.

Meanwhile, the Ministry of Industry and Trade (MoIT) encourages local enterprises to shift their focuses to the domestic market, while utilizing e-commerce and expanding their supply chains at the same time.

According to Tuan Anh, the MoIT is expected to propose the government the waiver and reduction of taxes for labor-intensive sectors such as textile, footwear, and electronics industry, among others.

Previously, the MoIT said 50 local garment firms could produce eight million face masks per day, or around 200 million per month. The figure would be higher if the production capacity nationwide is taken into account

Under the growing impacts of the Covid-19 pandemic, face mask production is considered a viable solution for garment companies to maintain operations and offset losses from lower demand for garments.

Manufacturing sector under pressure

Truong Thanh Hoai, director of the MoIT’s Heavy Industry Department, said as exports are declining, incentives are needed to help enterprises maintain operations, including preferential loans and reduction in land rental fees.

“Automobile, footwear and textile should be included in priority sectors that require drastic supportive measures,” Hoai added.

In the first quarter, major industrial sectors, including textile, garment, footwear, electronics, were severely hit by the pandemic, with the garment and textile exports suffering a 19% decline.

Deputy Head of the MoIT’s Import – Export Department Nguyen Cam Trang said companies are facing difficulties in exporting to major markets such as the US and EU as both are struggling with the Covid-19 pandemic.

Trang said more and more US and European importers have informed their Vietnamese partners of delaying or canceling orders for garment products.

The MoIT expected manufacturing activities in the coming quarters would face huge challenges due to weaker demand, which subsequently affects exports from now until the end of 2020.

Director of Heavy Industry Department anticipated a slump in the number of orders for electronic products, and the automobile industry to maintain operation at the minimum.