Shoemakers unlikely to meet target

The footwear industry would have to struggle to reach its target to of 70 per cent of the domestic market in five years without incentive policies, related production site and credit to encourage firms to expand, an industry analyst said.

Viet Nam is the world’s fourth largest footwear producer and exporter with turnover of US$2.75 billion in the first seven months of the year, an increase of 13.8 per cent over the same period last year.

However, because the industry exports 90 per cent of production, it met only 40 per cent of domestic demand, the remainder being imported, mostly from China, HCM City Leather and Footwear Association chairman Nguyen Van Khanh said.

The Ministry of Industry and Trade estimated domestic demand would reach 130-140 million pairs of shoes (worth $1.5 billion) a year. The leather and footwear industry planned to supply 70 per cent of local demand by 2015, up from 40 per cent, and this was a tall order, Khanh said.

Viet Nam had more than 500 leather and footwear enterprises, 70-80 per cent of which were outsourcing for world brands such as Nike and Adidas and most of their samples, designs, material and technology were being provided by foreign firms, he said.

The Viet Nam-made leather and footwear products on the domestic market were made by small and medium producers, of which most were in HCM City – about 100 production bases– sized a few producers in the north, including in Ha Noi and Hai Duong.

Small- and medium- sized producers averaged 1,000-1,500 pairs of shoes a month , with only a few making from 6,000 to 15,000 pairs, a small volume compared with the domestic demand, Khanh said.

They faced many difficulties, such as a lack of capital and shortage of land and workforce, inexperienced management and outdated technology and plant.

For the country’s leather and footwear industry to reach the target, the ministry and the Viet Nam Leather and Footwear Research Institute needed to conduct research, develop support policies and favourable mechanisms for the smaller enterprises, Khanh said.

There should be industrial zones created for footwear producers and credit funds made available for the development of trade villages and enterprises, he said. — VNS

Tags: Vietnam Footwear, Vietnam Footwear Exports, Vietnam Shoemakers