Vietnam’s Textile Sector Navigates Global Headwinds to Achieve Strong Year-End Results
Vietnam’s vibrant textile and garment sector has demonstrated remarkable resilience, capping off a challenging year with robust export values and significant profit margins. Despite facing a turbulent global economic landscape marked by tariff volatility and supply chain disruptions, the industry managed to post an estimated year-on-year export value increase of between 5% and 5.6%. This performance underscores the sector’s adaptability and its capacity to mitigate the adverse effects of global economic pressures on production and overall business performance.
The year has been hailed as the second-highest profit-generating period in three decades for many key players. Cao Huu Hieu, CEO of the state-owned Vietnam National Textile and Garment Group (Vinatex), highlighted this achievement at a year-end review. Vinatex itself reported a stellar year, with consolidated revenue reaching approximately US$755.6 million, exceeding its annual plan by 3.2%. Consolidated profit was equally impressive, nearing US$54.2 million, a remarkable 149% of its target. This success translated into better livelihoods for its workforce, with average monthly incomes climbing by 10% year-on-year to an estimated VND11.7 million (around US$468) per employee.
The textile and apparel market in 2025 presented a dual narrative of both burgeoning opportunities and persistent challenges. Companies grappled with the escalating costs of raw materials, particularly cotton and fibre prices, which, coupled with fluctuating logistics expenses, significantly impacted operational budgets. Simultaneously, customers tightened their demands, imposing more rigorous requirements concerning delivery timelines, product quality, and the crucial aspect of traceability throughout the supply chain.
Adding to these pressures, processing fees saw a decline, and increasingly stringent regulations on tracking the origin of goods further squeezed profit margins. The global textile supply chain, still in the process of full recovery, bore the brunt of shifting tariff policies. This led to customers expecting manufacturers to shoulder a portion of the additional costs associated with these tariffs. The competitive landscape intensified, with established low-cost exporting nations such as Bangladesh and Indonesia posing significant challenges. Despite these considerable headwinds, Vietnamese textile and apparel firms managed to close the year with notably strong business outcomes.
Strategic Agility Drives Profitability
CEO Hieu attributed Vinatex’s impressive 49% profit surge – a figure second only to the exceptional performance in 2021 – to a highly agile management approach. He specifically pointed to a strategic “90-day sprint” initiative designed to maximise output and ensure the timely completion of orders for the second quarter of 2025. This proactive measure was particularly crucial in anticipating and navigating potential shifts in US tariff policies.
At the Hoa Tho Textile Garment Corporation, the year proved to be its most successful to date, with revenues, exports, and profits all surpassing projections. The company’s consolidated revenue reached an estimated US$221.5 million, 10% above its annual target, while export value hit US$268 million, exceeding its plan by 5%. Its consolidated pre-tax profit stood at US$16 million, 11% above target. When compared to 2024, revenue saw a healthy 9% increase, and pre-tax profit climbed by a substantial 13%, setting new historical records for the company.
The market recovery in 2025 also offered a much-needed reprieve for many yarn producers within the Vinatex ecosystem. After three years of experiencing negative growth, several firms were able to curtail losses and return to profitability.
8-3 Textile Company Co., Ltd. reported estimated 2025 revenues of US$32.8 million, an 18% year-on-year increase.
Its pre-tax profit approached US$140,000.
Production output was projected to exceed 12 million tonnes, a 22% rise, with sales volume anticipated at about 12,191 tonnes, up 19%.Dong Xuan Knitting Co., Ltd. also showcased a remarkable turnaround.
The company closed 2025 with revenue of approximately US$18.7 million, an 8% increase from 2024, meeting its annual plan.
Its pre-tax profit surged by an impressive 188% to approximately US$428,000, exceeding projections by 110%.
Outlook for 2026: Navigating New Challenges
Buoyed by these positive 2025 results and a thorough analysis of the fourth-quarter market conditions, Vinatex has set an ambitious consolidated revenue target of around US$800 million for 2026. Consolidated profit is projected to fall within the range of US$48 million to US$60 million. CEO Hieu acknowledged that this plan is inherently challenging due to ongoing reciprocal tariff issues and lingering global economic uncertainties. Nonetheless, even under less favourable conditions, the group anticipates achieving a consolidated profit of approximately US$56 million.
Looking ahead, global textile demand in 2026 is forecast to grow at a more modest pace of about 3%, roughly half of the 2025 growth rate. This slowdown is attributed to the absorption of tariff policy effects by US consumers, potentially leading to reduced spending. Export-oriented manufacturers are expected to redirect significant volumes to established markets such as the European Union, Japan, and South Korea, intensifying competition in these regions.
Furthermore, China is anticipated to increase its exports to the EU, employing aggressive pricing strategies through substantial discounts. This could place Vietnamese products, which already face challenges in maintaining strong price advantages, at a competitive disadvantage.
Despite these projections, CEO Hieu expressed confidence in Vietnam’s enduring position within the global textile supply chain.
Strategic Goals for Continued Growth
For 2026, Hoa Tho Textile Garment Corporation aims to sustain its growth trajectory, targeting revenue of approximately US$222 million, export turnover of US$269 million, and a consolidated pre-tax profit of around US$16.8 million. To achieve these objectives, the company plans to:
- Restructure its customer base and refine core product lines for each garment factory.
- Enhance operational efficiency across all facets of its business.
- Strive for a productivity increase of over 5% across the board.
- Develop new, higher-value-added yarn products.
- Maximise the benefits of ongoing factory upgrades.
- Boost productivity within its yarn operations.
