Footwear industry submits strategy

The Vietnam Leather and Footwear Association (Lefaso) has submitted to
the Government a strategy to develop the sector from now till 2020 with a
vision to 2015 which focuses on the support and material industries.

Lefaso President Nguyen Duc Thuan said the strategy
aims at ending the sector's dependence on foreign materials and
technologies, and shifting from sub-contracting to direct contracting.

Under the strategy, the sector will need 18.8
trillion VND (989 million USD) to produce shoe trees and footwear
models, and expand the production of materials including leather and
leatherette.

The plan is expected to help the sector
earn 8.5 billion USD from exports by 2015 and 11 billion USD by 2020 by
boosting the localisation rate to 65-75 percent from the current 50
percent.

Thuan explained that the strategy was
developed because the sector has been suffering from a serious shortage
of materials for many years due to the lack of a support industry.

The country currently has only 30 enterprises, including five with
foreign investment capital, producing tanned leather, the main material
used by the footwear sector. These enterprises can only meet 30 percent
of the material demands of domestic footwear enterprises.

Thuan further explained that the sector has to cope with the EU's anti-dumping tax on Vietnamese footwear.

In an effort to boost exports, Lefaso has carried out many promotional
activities, including hosting the 29th international conference of the
Asian footwear sector, and the international fair for footwear materials
and machines

As customers are shifting their
attention from China to Vietnam , Vietnamese shoe makers currently
have export orders until the first quarter of 2011.

In the first nine months of the year, the sector earned over 3.6
billion USD from exports, a year-on-year increase of 23 percent. The
figure is expected to surpass 5 billion USD by the end of the year./.

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Footwear sector plans to develop supporting industry

Photo: AFP

The Vietnam Leather and Footwear Association (Lefaso) has submitted to the government a strategy to develop the sector from now till 2025, focusing on the supporting and material industry.

According to Lefaso President Nguyen Duc Thuan, the strategy aims at ending the sector’s dependence on foreign materials and technologies and shifting from sub-contracting.

Under the strategy, the sector will need VND18.8 trillion (US$989 million) to produce shoetrees and models and expand production of materials including leather and leatherette.

The plan is expected to help the sector to earn $8.5 billion from exports by 2015 and $11 billion by 2020 with the localization rate of 65-75 percent from 50 percent at present.

Thuan explained that the strategy was prompted by the fact that the sector has been suffering from a serious shortage of materials for many years, due to a lack of supporting industry.

At present, the country has only 30 enterprises, including five with foreign investment capital, producing tanned leather, the main material for the footwear sector. Those enterprises can meet only 30 percent of the demands for materials of domestic footwear enterprises.

The Lefaso leader further said that the sector has also to cope with the EU’s anti-dumping tax on Vietnam’s footwear products.

In an effort to boost exports, Lefaso has carried out many promotion activities, including hosting the 29th international conference of the Asian footwear sector and the international fair of footwear materials and machines.

At present, Vietnamese shoe makers have got orders for exports to fill until the first quarter of 2011, as customers are shifting their attention from China to Vietnam.

In the first nine months of the year, the sector earned over $3.6 billion from exports, a year-on-year increase of 23 percent. The figure is expected to hit over $5 billion by the end of the year.

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Footwear sector plans to develop supporting industry

Photo: AFP

The Vietnam Leather and Footwear Association (Lefaso) has submitted to the government a strategy to develop the sector from now till 2025, focusing on the supporting and material industry.

According to Lefaso President Nguyen Duc Thuan, the strategy aims at ending the sector’s dependence on foreign materials and technologies and shifting from sub-contracting.

Under the strategy, the sector will need VND18.8 trillion (US$989 million) to produce shoetrees and models and expand production of materials including leather and leatherette.

The plan is expected to help the sector to earn $8.5 billion from exports by 2015 and $11 billion by 2020 with the localization rate of 65-75 percent from 50 percent at present.

Thuan explained that the strategy was prompted by the fact that the sector has been suffering from a serious shortage of materials for many years, due to a lack of supporting industry.

At present, the country has only 30 enterprises, including five with foreign investment capital, producing tanned leather, the main material for the footwear sector. Those enterprises can meet only 30 percent of the demands for materials of domestic footwear enterprises.

The Lefaso leader further said that the sector has also to cope with the EU’s anti-dumping tax on Vietnam’s footwear products.

In an effort to boost exports, Lefaso has carried out many promotion activities, including hosting the 29th international conference of the Asian footwear sector and the international fair of footwear materials and machines.

At present, Vietnamese shoe makers have got orders for exports to fill until the first quarter of 2011, as customers are shifting their attention from China to Vietnam.

In the first nine months of the year, the sector earned over $3.6 billion from exports, a year-on-year increase of 23 percent. The figure is expected to hit over $5 billion by the end of the year.

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Footwear sector plans to develop supporting industry

The Vietnam Leather and Footwear Association (Lefaso) has submitted to
the government a strategy to develop the sector from now till 2020 with a
vision for 2015, focusing on the supporting and material industry.

According
to Lefaso President Nguyen Duc Thuan, the strategy aims at ending the
sector’s dependence on foreign materials and technologies and shifting
from sub-contracting.

Under the strategy, the sector will need
18.8 trillion VND (989 million USD) to produce shoetrees and models and
expand production of materials including leather and leatherette.

The
plan is expected to help the sector to earn 8.5 billion USD from
exports by 2015 and 11 billion USD by 2020 with the localisation rate of
65-75 percent from 50 percent at present.

Thuan explained that
the strategy was prompted by the fact that the sector has been suffering
from a serious shortage of materials for many years, due to a lack of
supporting industry.

At present, the country has only 30
enterprises, including five with foreign investment capital, producing
tanned leather, the main material for the footwear sector. Those
enterprises can meet only 30 percent of the demands for materials of
domestic footwear enterprises.

The Lefaso leader further said
that the sector has also to cope with the EU’s anti-dumping tax on
Vietnam’s footwear products.

In an effort to boost exports,
Lefaso has carried out many promotion activities, including hosting the
29th international conference of the Asian footwear sector and the
international fair of footwear materials and machines.

At
present, Vietnamese shoe makers have got orders for exports to fill
until the first quarter of 2011, as customers are shifting their
attention from China to Vietnam.

In the first nine months
of the year, the sector earned over 3.6 billion USD from exports, a
year-on-year increase of 23 percent. The figure is expected to hit over 5
billion USD by the end of the year./.

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Vietnam footwear industry eyes runaway exports

Footwear exports this year could top a record $5.4 billion, well above the target of $4.6-$5 billion, Nguyen Duc Thuan, chairman of the Vietnam Leather & Footwear Association, said.

Exports maintained their high growth rate in August, he said, with the month’s shipments of $450 million taking the year-to-date figure to $3.22 billion, a 19 percent increase year on year.

Exports had been worth $4.1 billion last year despite the global recession. The number of contracts signed this year is already 16 percent higher than for the whole of last year, Thuan said without specifying their value.

Vietnam is the world’s fifth biggest footwear exporter but the domestic industry faces many difficulties, especially the shortage of workers and dependence on imported raw materials.

The country still imports 70-80 percent of tanned leather and high-quality leatherette to make shoe caps, certain soles, and decorations.

Its support and machine tools industries are in a very primitive stage while footwear marketers and designers lag behind their foreign rivals, making it hard to create international brands for Vietnamese footwear.

Exporters have come up against protectionist barriers in the EU, Peru, and Turkey.

But the industry is aiming to expand exports to markets like the US and ASEAN member countries to take advantage of free trade agreements.

Vietnam has an advantage over its main rival, China, in labor costs since China’s GDP per capita is now $3,000 compared to its $1,200, Thuan said.

Vietnam’s per capita income is forecast to rise to $3,500 only in 2020, which means the leather-shoe industry can continue to be competitive through the next decade, he added.

Another factor in its favor is that demand for leather footwear remains very high.

Worldwide, some 17 billion pairs of shoes are produced every year, of which six to seven billion are manufactured under contract.

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Vietnam footwear industry eyes runaway exports

Vietnam footwear exports this year could top a record $5.4 billion, well above the target of $4.6-$5 billion

Photo: Tuoi Tre

Footwear exports this year could top a record $5.4 billion, well above the target of $4.6-$5 billion, Nguyen Duc Thuan, chairman of the Vietnam Leather & Footwear Association, said.

Exports maintained their high growth rate in August, he said, with the month’s shipments of $450 million taking the year-to-date figure to $3.22 billion, a 19 percent increase year on year.

Exports had been worth $4.1 billion last year despite the global recession. The number of contracts signed this year is already 16 percent higher than for the whole of last year, Thuan said without specifying their value.

Vietnam is the world’s fifth biggest footwear exporter but the domestic industry faces many difficulties, especially the shortage of workers and dependence on imported raw materials.

The country still imports 70-80 percent of tanned leather and high-quality leatherette to make shoe caps, certain soles, and decorations.

Its support and machine tools industries are in a very primitive stage while footwear marketers and designers lag behind their foreign rivals, making it hard to create international brands for Vietnamese footwear.

Exporters have come up against protectionist barriers in the EU, Peru, and Turkey.

But the industry is aiming to expand exports to markets like the US and ASEAN member countries to take advantage of free trade agreements.

Vietnam has an advantage over its main rival, China, in labor costs since China’s GDP per capita is now $3,000 compared to its $1,200, Thuan said.

Vietnam’s per capita income is forecast to rise to $3,500 only in 2020, which means the leather-shoe industry can continue to be competitive through the next decade, he added.

Another factor in its favor is that demand for leather footwear remains very high.

Worldwide, some 17 billion pairs of shoes are produced every year, of which six to seven billion are manufactured under contract.

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Quality improvement an edge for Vietnam footwear

HCMC – Improving the quality of Vietnamese footwear will give exporters a competitive edge over low-priced Chinese products, an industry expert told reporters on the sidelines of the 29th International Footwear Conference in HCMC on Tuesday.  

“China has big productivity. No other country produces as much footwear as it does within a short period of time,” said Peter T. Mangione, managing director of Global Footwear Partnership LLC.  

He said a Chinese shoes company could produce thousands of pairs of shoes within a day and suggested Vietnam should make high-quality shoes given its lack of facilities able to turn out huge volumes of cheap footwear.

It does not make sense to try to compete with China in the U.S. market, he noted, because China is now and will be the biggest footwear supplier of America whose 87% footwear demand is met by China.

Big footwear brands like Adidas and Nike are moving their production to Indonesia and maintaining their presence in Vietnam but downsizing their activity in China due to labor shortages and rising costs. However, China cannot be replaced as the world’s leading footwear maker.

Mangione said Asia would remain the biggest footwear supplier of the world but could also become a potential market for the product. For example, China is seen as the most attractive market in the region as its consumption is rising dramatically due to fast urbanization.

About foreign investment in Vietnam’s footwear industry, the expert predicted that investment in the sector might rise but not significantly because leading footwear brands Nike and Adidas had invested heavily in China over the years.

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Shoemakers unlikely to meet target

Customers shop for shoes at Viet Plaza Shopping Centre in HCM City. The leather and footwear industry is falling short of a target to meet 70 per cent of domestic demand by 2015. — VNA/VNS Photo Thanh Phan

HA NOI — The footwear industry would have to struggle to reach its target to of 70 per cent of the domestic market in five years without incentive policies, related production site and credit to encourage firms to expand, an industry analyst said.

Viet Nam is the world's fourth largest footwear producer and exporter with turnover of US$2.75 billion in the first seven months of the year, an increase of 13.8 per cent over the same period last year.

However, because the industry exports 90 per cent of production, it met only 40 per cent of domestic demand, the remainder being imported, mostly from China, HCM City Leather and Footwear Association chairman Nguyen Van Khanh said.

The Ministry of Industry and Trade estimated domestic demand would reach 130-140 million pairs of shoes (worth $1.5 billion) a year. The leather and footwear industry planned to supply 70 per cent of local demand by 2015, up from 40 per cent, and this was a tall order, Khanh said.

Viet Nam had more than 500 leather and footwear enterprises, 70-80 per cent of which were outsourcing for world brands such as Nike and Adidas and most of their samples, designs, material and technology were being provided by foreign firms, he said.

The Viet Nam-made leather and footwear products on the domestic market were made by small and medium producers, of which most were in HCM City – about 100 production bases– sized a few producers in the north, including in Ha Noi and Hai Duong.

Small- and medium- sized producers averaged 1,000-1,500 pairs of shoes a month , with only a few making from 6,000 to 15,000 pairs, a small volume compared with the domestic demand, Khanh said.

They faced many difficulties, such as a lack of capital and shortage of land and workforce, inexperienced management and outdated technology and plant.

For the country's leather and footwear industry to reach the target, the ministry and the Viet Nam Leather and Footwear Research Institute needed to conduct research, develop support policies and favourable mechanisms for the smaller enterprises, Khanh said.

There should be industrial zones created for footwear producers and credit funds made available for the development of trade villages and enterprises, he said. — VNS

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Int’l footwear expo, conference to promote Asian market

Lefaso officials announce the international footwear and leather events due to take place in Vietnam next month - Photo: Thu Nguyet

HCMC – Two international events will take place in Vietnam next month to promote trade and investment in the Asian leather and footwear industry and help producers boost trade in the region, the organizer said on Wednesday.

The Vietnam Leather and Footwear Association (Lefaso) said at a news briefing that the International Footwear Conference to be attended by its 12 member countries would be hosted in Vietnam on September 6-7. Representatives of 12 leather and footwear associations from the member countries, including China, India, Indonesia, the Philippines and Thailand, will join the conference.  

Nguyen Duc Thuan, chairman of Lefaso, said the conference would bring opportunities for Vietnamese enterprises to learn and share experience as well as look for potential partners.  

Diep Thanh Kiet, vice chairman of the association, added the conference was also expected to present solutions to help members improve product quality and tap into the regional market instead of just focusing on export to America and Europe.

Beside the conference, Vietnam will host the international footwear and leather exhibition with 200 stands in Saigon Exhibition and Convention Center in HCMC’s District 7 on September 8-11. Some 120 footwear and leather goods manufacturers, including 30 Vietnamese producers will join the exhibition to promote their brand images and find partners.

Ricky Tran, representative of Top Repute Co., Ltd. as the organizer of the  exhibition, said about 100 Chinese enterprises were expected to come to Vietnam to sound out investment opportunities and look for producers interested in receiving outsourcing contracts from Chinese ones.  

Tran said the exhibition would promote new products of Asian producers to boost trade in the region.

Beside the two events, Lefaso will honor excellent local footwear producers and announce the long-term development strategy of the industry on the occasion of the 20th year of the association.

A general strategy to develop the industry has been jointly prepared by Lefaso and Vietnam Leather and Footwear Research Institute, and is awaiting the Ministry of Industry and Trade’s approval. It’s expected to solve local footwear producers’ current challenges, including shortage of labor, materials and designs.

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High-value wear orders preferred on labor shortage

HCMC – Many local footwear and garment exporters have begun to go for orders for high-value items given a growing shortage of labor, said an industry expert on Tuesday.  

“Many enterprises are facing labor shortages, so they are choosing orders for products of high quality and value,” Diep Thanh Kiet, vice chairman of the Vietnam Leather and Footwear Association (Lefaso), told the Daily on the phone.

Kiet is also vice chairman of the Association of Garment-Textile-Embroidery-Knitting in HCMC.  

Vietnamese exporters in the footwear and garment sectors, two of the country’s leading export earners, are receiving many contracts from new and old partners. Orders for footwear has risen 16% this year, and 20% for garments. But Kiet said the sectors had been struggling with lack of labor. 

Kiet said annual growth in exports of footwear and garments ranged from 15% to 18%. In the first seven months of this year, footwear and garment exports expanded 14% and 17% respectively.  

Should productivity in the two industries remain unchanged, labor demand must be increased by 15-18%, or 500,000 workers per annum. The current labor force in the two industries is 2.6 million in total, but worse still, it has fallen by around 300,000 workers a year as jobs in these sectors are no longer attractive.  

Kiet said Vietnam footwear and garment producers had for years relied on foreign subcontracts, so they had gained some valuable experience in making items of high value and quality.

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