Workers at a footwear production plant in Vietnam (Illustrative image. Source: VNA) Hanoi (VNA) - The domestic leather and footwear industry was in good shape to reach its goals this year, according to Phan Thi Thanh Xuan, Vice Chairwoman and General Secretary of the Vietnam Leather and Footwear Association (Lefaso).
The industry's industrial production index in 2020 would increase by about 11 percent and the localisation rate of products would hit 60 percent, she said.
The industry’s footwear and bag export value was forecast to reach 24 billion USD in 2020, gaining 10 percent compared to the figure last year.
Xuan said this year, the US-China trade war as well as trade conflicts between the US and other trade partners such as Europe and India would likely decrease, while the global economy would gradually recover.
Besides that, orders for footwear and bag would continue shifting from China to Vietnam to take advantage of preferential tariffs from free trade agreements, she said.
Therefore, Lefaso forecast that the demand for local footwear products in Vietnam’s main export markets would increase this year.
Foreign direct investment (FDI) enterprises would continue to expand production, helping the footwear industry maintain export growth.
According experts, the domestic leather and footwear industry had many opportunities to expand into new export markets. However, businesses needed to target value-added products and high-end brands for higher profits.
In addition to opportunities, free trade agreements would create many challenges for domestic footwear enterprises, so they needed to renew technology, improve production capacity, develop export markets and improve competitiveness.
According to the association, the industry must develop its support industries and raw materials, and increase labour productivity. It should also encourage investment to develop footwear production in central and southern provinces.
The association also said the biggest difficulty facing the leather and footwear industry was quality human resources. Businesses must retrain most of their staff who had not been trained at vocational schools.
In terms of exports, the industry last year gained stable growth and maintained competitiveness in traditional markets. The top five markets accounted for over 82 percent of total national footwear export value, including the US, the European Union, China, Japan and the Republic of Korea.
Xuan said total export value of footwear and bags reached 22 billion USD last year, including 15.1 billion USD, or 75.8 percent, from FDI enterprises.
The gap in export value between FDI and domestic enterprises has been narrowed. Domestic enterprises accounted for 19.7 percent of the nation's footwear and bag export value in 2017, and that figure surged to 24.2 percent in 2019. This confirmed the recovery of domestic footwear enterprises./.
VNA
