In 2019, Vietnam Leather and Footwear Association (Lefaso) set a target of export turnover of 21.5 billion USD. Binh Duong enterprises are expected to make an important contribution to the overall industry performance this year.
Endeavors of businesses
Vietnam has exported footwear products to more than 100 countries around the world, including 72 countries with export turnover of over 1 million USD. Five major export markets of Vietnam's leather and footwear products in the last year, accounting for over 82.3% of the total export turnover of the industry, including the US, European Union (EU), China, Japan, and South Korea. .
Shoe production for export at Dong Hung Leather and Footwear Company (Di An town).
Capital flows in the domestic leather and footwear industry are moving strongly, as more and more foreign investors pour capital into this industry. Namely, there are more than 100 Korean enterprises operating in leather shoes production in Vietnam, of which about 80% of enterprises are located in Binh Duong province.
According to Truong Thuy Lien, General Director of Lien Phat Company (Di An Town), in recent years, domestic leather and footwear enterprises have boldly invested in machinery and equipment, heightened production level to the compete with FDI footwear companies. This is very beneficial to domestic footwear industry. However, the elimination process will take place more strongly. If businesses do not attempt to improve technology and quality to heighten competitiveness, it will be very difficult for them to exist, while more and more FDI leather and footwear enterprises are investing into Binh Duong.
Representative of Binh Duong Leather and Footwear Association said that Vietnam was ranked second in the world in terms of export value of footwear (after China). Currently, the average cost of a shoe pair produced in Vietnam on the market is 15 USD / pair, while China’s shoe pair is about 10 USD / pair. The difference does not prove that Chinese footwear is more competitive due to cheaper costs, but quality of Vietnam's leather and footwear is better and favored by many big markets in the world.
Binh Duong leather and footwear industry makes an important contribution
A representative of the Business Association of Busan City (South Korea) said that in the coming time, the association would discuss with Binh Duong province to cooperate in human resource training and new technology transfer. After getting agreement between the two parties, a university or research institute for shoe production technology is expected to be built in Binh Duong.
According to provincial Department of Industry and Trade, there are 2,277 enterprises of supporting industry in the province, of which wood processing has 953 enterprises, mechanical 710 enterprises, textile 442 enterprises, and footwear 172 enterprises. The province's leather and footwear industry has a strong support from supporting industry such as tanning, manufacturing shoe soles, shoe caps.... Besides, the province formed a few industries manufacturing materials and accessories for textile, garment, footwear, M&E industries in the area. The province also developed an industrial park in Bau Bang district on an area of over 1,000 hectares, prioritizing attracting investment capital in supporting industries, especially FDI projects.
A characteristic of leather and footwear industry is that materials and accessories account for 60-70% of product cost. but according to Nguyen Quang Vu, Chairman of Binh Duong Leather and Footwear Association, currently domestic supporting industries are able to supply about 20-25% of demands, the rest must be imported. If the source is available on-site, this industry will increase its competitiveness with rivals in the region. Domestic enterprises are fully capable of narrowing the gap with FDI footwear enterprises.
In 2018, domestic footwear enterprises accounted for 21.2% of the export value (19.4% in 2017). This was a good sign that affirmed the development of domestic footwear enterprises. Experts believed that in 2019, domestic leather and footwear enterprises would continue to increase export proportion, bringing the national leather and footwear industry to sustainable development.
Reported by Xuan Vi – Translated by Ngoc Huynh
