Shoe export contracts dry up

Shoe export contracts dry up

While footwear was the nation's third leading export earner in the first half of the year, exporters remain concerned about the lack of new export orders beyond the third quarter, according to Viet Nam Leather and Footwear Association (Lefaso) chairman Nguyen Duc Thuan.

Exports of footwear products in the first six months of the year surged to US$3.4 billion, 25 per cent over the same period a year ago, with EU markets accounting for US$1.55 billion of the total and exports to the $806 million, the Kinh te & Do thi (Economy and Urban Affairs) reports.

However, Thuan said, only a few producers, including the Dong Hung, An Lac, Binh Tien, Truong Loi and Lien Phat companies, have sufficient contracts in place and have not had to cut production.

Representatives from footwear exporter Thuong Dinh said negotiations for export prices were problematic as customers, particularly in the EU, were seeking lower prices due to sagging consumer demand.

The EU, US and Japan were also imposing stricter requirements pertaining to quality and environmental and social responsibilities which have been difficult for domestic exporters to meet, Thuan said. Local producers, he noted, have also been slow in responding to changing export markets.

While continuing to enjoy the advantage of cheap labour costs, Viet Nam's producers still had to import up to two-thirds of raw materials, reducing their competitiveness, Thuan said.

To meet the sector's export target of $7.3 billion for the year, an increase of 12 per cent over last year, producers would need to maintain traditional customers and boost trade promotion efforts to find new customers in markets such as Latin America, he added.

He also urged producers to update the trademark image of Vietnamese footwear products, as well as rush to meet importers' regulations on quality and environmental and social responsibilities. He suggested the Government help exporters access to updated market information in order to deal with changing markets in a timely manner.

Lefaso has also recommended the Government restore the 275-day tax deferment on imported materials that was previously in place. The Government has recently required importers of raw materials to pay the import tax immediately upon customs clearance. Domestic exporters were also pushing the Government to do more for Viet Nam to enjoy the Generalised System of Preferences (GSP) so that it would be easier for them to access the US market.

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