The footwear industry needs to focus more on developing the supporting industry, training workers, and improving products and marketing to develop in a sustainable manner, a seminar heard in Ho Chi Minh City on November 10.

Nguyen Duc Thuan, Chairman of the Vietnam Leather, Footwear and Handbag Association (Lefaso), said the footwear industry has seen strong development, becoming the country's second or third largest exporter in recent years.

(Photo for illustration) Source: baocongthuong.com.vn

Almost all leading global footwear brands like Nike, Adidas, and Puma are present in the country.

The industry has great potential to boost exports, especially with several free trade agreements the country is negotiating – like the Trans-Pacific Partnership, Vietnam-EU FTA, an FTA between Vietnam and the Customs Union of Russia, Belarus and Kazakhstan – he said.

However, to derive advantages from such agreements, the industry should meet certain conditions, especially local content ratio, which requires it to develop supporting industries, Thuan and many other delegates said.

Diep Thanh Kiet, Lefaso's Vice Chairman, said 70 percent of the leather needed for footwear and handbags is imported, and only 50 percent of metal accessories can be sourced locally.

Thus, developing the supporting industries with a focus on leather, PVC, PU, and fabric is on the agenda, he said.

The industry will focus on training human resources in design and R&D, enhancing efficiency, and creating a good business environment to attract foreign investors and encourage domestic investors, he said.

It is seeking investments, including in two leather production zones, a synthetic leather plant, a production zone for all kinds of outsoles in the south, a small production zone for metal accessories, and a training centre that can train 150-200 designers/pattern makers, 200-250 production managers, 80-100 engineers, and 300-500 line leaders, he said.

Matt Priest, President of the Footwear Distributors and Retailers of America, said the US imported 2.32 billion pairs of footwear last year, or an average of 7.32 pairs per capita.

China accounted for 81 percent of the total and Vietnam for 10 percent, but China's share is declining, he said.

With Vietnam's exports rising sharply in the past 13 years, China's share is expected to reduce in the next five years to 70 percent, and Vietnam has to increase to 12 percent, he said. The ratio could be even higher because of the TPP, he said.

With its stable polity, a welcoming culture, competitive production advantages, "we found Vietnam an amazing place to source for footwear," he added.

The seminar also heard that many footwear producers have shifted their production base from China to Vietnam.

Oliver Ng of the Ever Rite Group said his company decided to move from China to Vietnam because of currency stability, lower labour costs, productivity that is comparable with other countries, and proximity to the Chinese supply chain, and to enjoy preferences offered by existing and future trade deals (ASEAN, EU's GPS, TPP).

Vietnam's exports of footwear and handbags were worth 10.4 billion USD last year, and a similar value had been achieved as of October 14 this year.

The seminar was organised by Lefaso in collaboration with the Footwear Distributors and Retailers of America.

Source: VNA