Five-month footwear export earnings up 11.4 percent

Photo for illustration. baodongnai.com

Vietnam earned 3.1 billion USD in footwear export in the first five months of this year, a year-on-year increase of 11.4 percent, according to the General Statistics Office.

Last month alone, export turnover reached 750 million USD due to the stability of traditional export markets and increasing orders from new importers.

In the first four months of the year, the industry enjoyed high export turnover from its traditional markets. The US took the lead with turnover of 755 million USD, followed by the UK with 149 million USD, Belgium with 140 million USD, Japan with 121 million USD and China with 114 million USD.

Shoe producers had stable orders, with many big enterprises receiving orders for up to the third quarter.

According to the Vietnam Leather and Footwear Association (LEFASO), the Trans-Pacific Partnership Agreement (TPP) negotiations would bring about opportunities for the Vietnamese leather and footwear industry to penetrate the large market.

The association added that Vietnam’s leather and footwear products would enjoy preferential tax of zero percent, reduced from the current 14.3 percent. This would help Vietnamese shoe enterprises to increase their competitiveness over other big shoe exporters that were not TPP members.

In addition, the products would be subject to Generalised System of Preferences (GSP) taxes in the EU market from the beginning of next year.

EU taxes would be zero percent when the Free Trade Agreement (FTA) between Vietnam and the EU came into effect.

Several British and German shoe importers, therefore, have been searching for business opportunities in Vietnam.

However, the association said the TPP would also bring about challenges for Vietnam’s shoes industry, as the agreement has a compulsory localisation rate for raw materials.

Domestic businesses have a low localisation rate of 40 percent, as the industry depends highly on imported materials.

The Ministry of Industry and Trade encouraged footwear businesses to increase their investment in material production, modern and environmentally friendly technologies.

The country aimed to reach an export turnover of 9.7 billion USD this year, up 10 percent over last year. Shoe export alone is expected to gain 8 billion USD.

It also aims by 2020 to be one of the world's top-five producers and exporters of footwear.