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Hai Phong Leather Products and Footwear Co set up two new production lines to expand business and exports. The export value of leather shoes reached $3.57 billion in the first 11 months of this year, a 16 per cent year-on-year decrease |
Based on this turnover, the country’s shoe exports for December are projected to be around $300 to 400 million, making an annual total of roughly $4 billion, which is much lower than the originally targeted $4.7 billion.
Diep Thanh Kiet, deputy chairman of the Viet Nam Leather and Footwear Association (Lefaso) said that the sector’s exports had reduced by 14 to 15 per cent while the decrease of the country’s exports as a whole had been 15 per cent.
Explaining the situation, an official from the ministry said the sector had faced stiff competition from Brazil, India, Bangladesh and Cambodia. Many investors had also moved their factories to Cambodia due to the fact that the country had been granted the EU’s Generalised System of Preferences (GSP) and did not have an anti-dumping tax for its leather-capped shoes.
Sharing his ideas, Kiet said Viet Nam’s leather shoe businesses had been subject to the anti-dumping tax of 10 per cent imposed by the EU since 2007.
At the beginning of the year, the EU removed the industry from it’s GSP causing the export tax to rise to 16 per cent for a market that makes up 75 per cent of the sector’s total export turnover.
According to experts, at this tax level, the country’s leather export turnover this year would reduce by at least 30 per cent.
They said that the sector needed a united effort, something that had been lacking in previous years.
He added that in this context, the expansion of the domestic market was a bright point in the downturn but the difficulties that hampered the sector’s development would continue to be a huge challenge next year.
In an effort to improve the sector’s business in the future, the association targeted continued development in both domestic and foreign markets next year.
Under the plan, made-in- Viet Nam footwear would increase it’s domestic market share to 50 per cent, 10 per cent higher than the current level.
However, the target would be a challenge because the lower-income market has been flooded with Chinese goods and foreign brands now occupy the upper-income market.
"An associating model between leather shoe businesses and material producers would reduce the costs of materials. Some enterprises have proposed to set up industrial zones for the model," he said.
Recently, the Lien Anh industrial zone specialising in materials for the leather shoe and garment industries was launched and is expected to actively contribute to the sector.
Nguyen Thi Tong, general secretary of Lefaso said businesses should find their own key products and suitable market segments.
Tong added that to reduce pressures in export and avoid commercial barriers, businesses should invest in high-tech production lines.
Kiet said the sector needed support from the Government, especially in human resources training.
Leather supply was also a big issue as most of the leather tanning enterprises had stopped their production due to environmental problems.
"Therefore, State support should be given to businesses to improve their technology," he said.
With an export turnover of $4.8 billion last year, Viet Nam ranked fifth in the world of leather shoe exports. There are over 500 shoe producing enterprises operating in the country, generating jobs for around 600,000 labourers a year.
(Source: VNS) |
