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Shoe firms target $16b exports
A development draft for Viet Nam’s footwear sector to 2020 with a vision to 2025 made by the Leather and Shoe Research Institute, targets an export turnover of US$16.5 billion by 2020. However, many questions have been raised about the feasibility of the draft.
Under the draft, if GDP growth rate and GDP-per-capita this year was 6.5 percent and US$1,237 respectively, the total numbers for the sector would reach 761 million pairs of shoes and other leather products and 107 million leather bags and wallets. Export turnover for leather shoes and other leather products would reach $6.2 billion, accounting for 10 percent of the country’s total export turnover.
Accordingly, from 2011-20, if the GDP kept the rate at 7.5 percent, the sector would see $16.5 billion in earnings by 2020, making over 9 percent of the country’s total export turnover.
Deputy Minister of Industry and Trade (MOIT) Bui Xuan Khu has asked several questions about the draft. He said that the export target of $6.2 billion this year was hard to believe, as last year only saw $4.1 billion, a decrease of 13 percent against 2008. The decline was mostly due to decreasing exports to the US market.
Khu added that the sector ranked second in the world after China. However, there was a question of whether or not leather shoes could take the lead and become the sector’s leading export product, while the percentage of sports shoes in Viet Nam is the highest.
He said that foreign direct-invested firms occupied a large proportion of canvas shoes and bags. He wondered if the businesses would continue to invest in the sector over the next 10 years.
The matter of materials for the sector was also mentioned, as most of them had been imported.
According to the head of the institute who is responsible for making the draft, Ngo Dai Quang, the sector’s production technology had remained at average levels across the region.
Quang said that the sector’s competitiveness mostly depended on sports shoes, women’s shoes and canvas shoes. Bags, wallets and tanned leathers had relatively low numbers.
Potential
He added that the products had mainly served foreign markets. The sector had not tapped into the potentials of the domestic market, which had a yearly consumption of 100 million pairs of shoes. Imported shoes had outnumbered domestically-produced ones.
Nguyen Huu Thuan, Chairman of the Viet Nam Leather and Footwear Association (Lefaso), said that the sector should find out its weaknesses to map out proper solutions.
"It should focus on both domestic and foreign markets, as well as take initiative in technology and design," Thuan said.
He said that the sector would retain its market share of 14 percent in the world market, and continue to be the second biggest exporter in Asia.
He added that domestic producers would gradually occupy 50 to 70 percent of the local market by developing their distribution channels and brand names.
Sharing these ideas, head of Tae Kwang Vina company’s marketing department Hoang Phi Hung said that leading foreign brand names had paid attention to improve their techniques on all of their products instead of just leather materials. He said the Government should have a clear idea for training.
vietnamnews
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