Illustrative photo (Photo: VNA)Speakingat the two-day 2017 Vietnam Footwear Summit which opened in HCM City on March15,Diep Thanh Kiet, Lefaso’s deputy chairman, said the industry enjoyed annualgrowth of 15-20 percent in 2011-15.
Leatherand footwear products were exported to nearly 50 countries and territories withthe US, EU, China and Japan being the biggest markets.
Theindustry is fairly competitive thanks to the country’s economic, political andsocial stability and abundant supply of cheap and highly-skilled labour, hesaid.
Vietnamhas established a firm position among exporters to the US, being the secondlargest footwear exporter to that market, with its exports increasing yearafter year.
“Theindustry stands on three legs, with the US accounting for 34.5 percent of itstotal exports, the EU for 31.9 percent and other markets for the rest.”
Freetrade agreements with the Republic of Korea, the Customs Union of Russia,Kazakhstan and Belarus, in addition to an agreement with the EU to take effectin future, are opening new windows for Vietnam’s leather and footwear industry,he said.
TheGovernment would continue to negotiate new FTAs to enable more exports ofVietnamese products, including footwear, he said.
“Thehealth of the US economy is the determinant factor, not the TPP.”
Ifthe TPP is signed but the US economy is not in good health, then demand wouldbe not that good, he said.
Butwithout the TPP, Vietnam can still maintain its competitiveness and keep itssecond position in the US market, he said.
MattPriest, president of the Footwear Distributors and Retailers of America, saidthe US imported 2.3 billion pairs of footwear last year.
Chinaaccounted for 72 percent of the total and Vietnam for 15.7 percent, but China’sshare is declining and Vietnam’s is increasing, he said.
PhanChi Dung, head of the Ministry of Industry and Trade’s light industrydepartment, said domestic supply of tanned leather and other raw materialsneeded by the industry has increased to 40-50 percent.
Theworld market is showing signs of recovery, while production costs in China, theworld’s largest footwear supplier, have tended to increase in recent years,resulting in importers shifting orders to Vietnam, he said.
Master plan
Talkingabout the industry’s development plans, Dung said it targets rapid, sustainabledevelopment and better use of free trade agreements to expand exports.
Itplans to restructure production to add value to products, increase localcontent in products, improve designs, and focus on medium- and high-qualityproducts for domestic and export markets, he said.
Delegatesat the summit said Vietnam’s leather and footwear sector has realised itsweaknesses and is working to increase domestic content to meet the strict rulesof origin enshrined in the trade agreements the country has signed.
Dungsaid the ministry is compiling a master plan for leather and footwear development,and it envisages production of more than 2 billion pairs of shoes a year by2025, two times last year’s volume, and exports of over 30 billion USD.
“Demandfor raw materials would also surge two or three fold, and so if the supportingindustry is not developed in the coming years, the industry would have todepend greatly on imports, which would make it hard to accomplish its targets,”he said.
Heurged footwear firms to join hands and to increase investment in modernequipment and technologies to capitalise on the opportunities brought by globalintegration, participate in the global supply chain and make Vietnam a globalfootwear production base.
PhillipKimmel of Kingmaker Footwear Holdings., Ltd said footwear firms should try tobetter understand current fashion needs, trends and directions.
Theyshould recognise that footwear is a fashion business and that fashion changesperiodically.
“Inorder to be a factory for the future, facilities must upgrade productionmachinery. Using tools like computer stitching machines enable factories toproduce consistent, high-quality goods that add value to branded merchandise.”
Inmany cases, the proper use of automation can eliminate redundant workers andmake factories much more efficient and profitable, he said.
Thereare some 1,700 enterprises in the sector in Vietnam, of which 800 are large.Foreign-invested enterprises account for 80 percent of the sector’s exports.
Leatherand footwear products are among Vietnam’s key export items, with exportsreaching 16.2 billion USD last year, accounting for 10 percent of the country’stotal exports.
Theyare expected to top 17.88 billion USD this year.
Thecountry is the third largest footwear maker and second largest exporter in theworld.-VNA
VNA
