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Vietnam’s shoes ready to march back into Europe
Vietnamese shoemakers are celebrating a European Union (EU) committee vote to end dumping duties on leather shoes from Vietnam.
Exports expected to rise 15 to 20 percent
Commenting on the 15-10-2 vote by of EU member countries to end dumping duties on leather shoes made in Vietnam, Diep Thanh Kiet, Deputy Chairman of the Vietnam Leather and Footwear Association (Lefaso), said that Vietnamese shoemakers are now confident that the EC will remove “these unreasonable dumping duties.”
[The vote by EU trade experts overrode the advice of officials of the 27 nation group. International newswires have reported that the latter may yet appeal the vote to ministers for a final decision. – VNNB ed.]
“If shoe exports generally recover in 2010, the footwear industry can expect additional growth on the order of 15-20 percent over 2009 thanks to the removal of the EU dumping duties,” Kiet said.
Nguyen Duy Thuan, Director of a HCM City company that has been exporting footware to the EU for many years, predicts that orders will increase by 30 to 40 percent. Thuan said that he has lost a lot of customers since the 10 percent dumping duty on “shoes with leather uppers” was imposed three years ago. His company’s exports recently have been about $3.2 million annually, including $300,000 worth of leather shoes. However, with renewed opportunity in the EU market, Thuan expects company revenues to rise by $500,000 in 2010.
Preparing to fill new orders, Truong Thuy Lien, director of a shoe factory in Binh Duong province, said that she expects the EU’s removal of dumping duties to translate into a ten percent increase in her company’s export sales. This year it has sold 1.8 million pairs of shoes at a unit price of $2.00 to 2.50 per pair.
“Our problem now is not a lack of orders. What we need to do now is to find enough workers,” Lien said.
A source at a HCM City company that grosses tens of millions of dollars annually in exports said that removal of the dumping duties would be the best news since the global economic crisis began. The source said the company’s customers are mostly well known brand names, so it can be confident that big orders are in the offing.
There’s still the problem of competition with China
Market experts point out that Vietnamese-made shoes face stiff competion by Chinese manufacturers in the EU market. For the past three years, the Chinese have faced a higher dumping duty than Vietnam, 16.5 percent, and this duty is also expected to be ended.
Kiet from Lefaso acknowledged that Vietnamese manufacturers’ asking prices for leather shoes average about 10 percent more than Chinese competitors. Further, Vietnamese companies cannot control the price and supply of material inputs. However, Kiet said, Vietnamese companies have other advantages that foreign partners recognize, especially labour skill and productivity.
The export director of the big HCMC company said that rather than obsessing on competing with China, Vietnam needs to make its own way in the market. In his view, instead of taking just any order and accepting any price, Vietnamese companies ought to concentrate on making high quality products
Kiet of Lefaso has warned enterprises not to place all their bets on the EU market, but instead to diversify exports to other countries. They should learn the lesson of three years ago, when overreliance on one market brought a sudden and rude reverse.
vietnamnet, tt
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