Leather and footwear firms set to increase exports

Leather and footwear firms set to increase exports

The leather and footwear industry exported goods worth US$10.3 billion last year, an increase of 18 per cent over the value of exports in 2012.

Last year's export value of footwear products was estimated at $8.4 billion, 15 per cent higher than the previous year, while the export value of handbags surged 26 per cent from the previous year to $1.9 billion, according to the Viet Nam Leather and Footwear Association(Lefaso).

Ngo Dai Quang, director of the Viet Nam Leather and Footwear Research Institute, was quoted by the Thoi bao Kinh Doanh (Business Times) newspaper as saying that the exports of Viet Nam's leather and footwear products to the United States (US) and the European Union (EU) last year are estimated at $3.4 billion for each market.

Regarding the US market which annually demands around 2.2 million pairs of shoes, footwear manufacturers could earn $60 billion in revenue each year, Quang noted, adding local footwear firms have ample opportunities to export their products to the US in the future.

As the industry increased the use of local inputs for production, it only paid $3.7 billion for raw material imports last year, which widened the trade surplus to $6.6 billion, noted Nguyen Duc Thuan, Lefaso's chairman.

Local firms are expected to export more products this year due to a growing trend of shifting export orders from China to other countries, such as Viet Nam, Thuan added.

Several large companies, including Nike and Adidas, have increased orders in Viet Nam to gain access to lower tariffs and a relatively better-skilled workforce, the association said.

To benefit from preferential tariffs under various free trade agreements and the Trans Pacific Partnership Agreement, several foreign companies of ancillary industries have also made investments in Viet Nam.

Thuan said local firms would strive to expand investments, increase production scales and improve the quality of their products to compete with foreign-investor-driven firms in Viet Nam.

The export markets of Viet Nam's leather and footwear are the European Union, the US, the United Kingdom, Belgium, Germany, Japan, the Netherlands, China, Brazil and Spain.

Currently, the country is also targeting new export markets, such as Eastern Europe countries, the Middle East and Africa.

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