Vietnamese leather and footwear exporters must become more competitive to capitalise on a shift in demand from China to Vietnam, advised experts from the Ministry of Industry and Trade.

They were addressing recent increases in orders made with Vietnamese producers from countries such as Japan, amid negotiations for the Trans-Pacific Partnership (TPP) Agreement.

The ministry experts said foreign importers were shifting orders of leather and footwear products from China to Vietnam, urging Vietnamese companies to improve their competitiveness on the global market.

Vietnam is finalising its participation in the TPP and is negotiating free trade agreements with countries in the European Union to attract further investment to the leather and footwear industry.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said Vietnam will aim to bring modern technology and prominent brands to the domestic industry.

The Vietnam Leather and Footwear Association (LEFASO) said importers of prominent leather and footwear products on the world market are planning to shift their orders from China to Vietnam to capitalise on cost and labour advantages.

The association added that Vietnamese leather and footwear exporters were aware of the opportunities as orders shifted to Vietnam.

However, Dang Van Chien, Director of the Hung Yen Footwear Joint Stock Company, said the trend is merely a ‘signal' and that foreign importers have only visited Vietnam to conduct market research.

Many enterprises have said challenges remain in attracting foreign orders to the sector, adding that high taxes, production costs and limited capacity need to be addressed first. Currently, 80 percent of footwear exporters in Vietnam are engaged in partial production of footwear products with limited capacity to deliver key aspects of end-to-end production, including design.

Domestic producers were also said to suffer from poor management and inadequate investment in new technologies.

Chien said that this made it difficult for enterprises to predict trends and demand in foreign markets.

He urged the Government to support training programmes that will improve the quality of the labour force and attract more foreign partners.

Diep Thanh Kiet, LEFASO's deputy chairman, said enterprises should review their market strategies, improve their competitive edges and build regions specialising in the production of raw materials.

In the first seven months this year, Vietnam's footwear export value jumped 15.6 percent from last year to 4.79 billion USD.-VNA