Shoemakers build on success

Most domestic leather-shoe makers are confident that the industry will achieve robust growth this year based on last year’s results, says Diep Thanh Kiet, vice chairman of the Viet Nam Leather and Footwear Association.

The leather and footwear sector’s export revenue last year reached nearly US$5.1 billion, a year-on-year increase of nearly 25 per cent, Kiet said.

Despite many difficulties including incomplete recovery in traditional export markets, anti-dumping duties, high interest rates and inflation, the sector performed impressively last year to become the second biggest export earner behind garment and textiles.

It would strive to maintain the momentum this year, Kiet said. Many positive signs had emerged from the US market that would give local footwear businesses more opportunities to widen their market share, he added.

Another favourable condition for the industry this year was that markets in ASEAN region, Japan and China have also opened their doors wider for Vietnamese shoes. Moreover, with high consumption demand in the domestic market, local footwear also had a great opportunity to grow at home, Kiet said.

Many footwear enterprises and experts believe that the European Commission will soon remove the anti-dumping tariffs on Vietnamese shoes, which would help boost exports to the industry’s largest market.

Furthermore, the Ministry of Industry and Trade has approved a growth strategy for the sector from now till 2020 that will focus on the development of support industries as well as material supply.

“This will be a major driving force for the sector’s sustainable development”, Kiet said.

Kiet said that despite the favourable conditions, the domestic leather and shoes industry also faced several obstacles this year, including high interest rates and inflation, as well as the rising cost of raw material.

High interest rates had pushed many companies to lower their scale of operations until conditions improved, he said.

Interest rates

If interest rates would not reduce soon, it would surely affect the sector’s growth since businesses would not dare to start new projects or expand production.

The industry in the past years encountered several difficulties due to the rising cost of input materials in the world market, and this was set to continue since it was still heavily reliant on imported materials and accessories, Kiet said.

High inflation had also caused difficulties for industry workers while businesses had struggled to raise salaries to retain their staff. At present, Viet Nam’s footwear products, mainly sports shoes, cloth and leather shoes and sandals, are exported to 50 countries and territories worldwide. The country is one of the world’s 10 leading footwear exporters. — VNS

Tags: Vietnam Shoemakers