Trang tiếng Việt
Footwear firms move to grasp up opportunities from FTAs

VIETRADE – Many Vietnamese leather and footwear enterprises were revising business and production strategies to take full of opportunities brought by free trade agreements (FTAs), especially with the Eurasia Economic Union (EAEU).

 

A representative of LADODA JSC told the Vietnam News Agency that said the company had imported leather, equipment and machinery and was seeking foreign partners.

 

LADODA had been shipping handbags and backpacks to the EAEU member countries, and it had now created 20 new designs for other markets in 2017, the representative said.

 

The Vietnam Leather, Footwear and Handbag Association (LEFASO) said, local leather and footwear companies had been revamping their production operations to increase productivity, improve products’ quality and expand business.

 

According to experts, as the market was opening, enterprise which could meet market requirements could benefit from these FTAs.

 

However, the deals were also creating new challenges for the Vietnamese leather and handbag sector, they noted.

 

Beside to the high labor rate of 70%, which might result in lower profits, technical barriers imposed by the EU and EAEU, together with commitments of social responsibility, environmental protection and procedures to enjoy tax preferences, would increase business costs.

 

At a recent conference in HCM City to promote the growth of the leather and footwear industry, experts advised local companies team up with each other to form a domestic chain that would allow them to source materials at home and sell products through local retail outlets.

 

The process of taking over the domestic market would gradually prepare Vietnam's leather and footwear firms to move up the global value chain and then seize the potential benefits of new-generation free trade agreements, they said.

 

Meanwhile, LEFASO urged local enterprises roll out their own strategies and solutions in order to churn out high-quality products that could gain a firm foothold in the home market and compete with their rivals in foreign markets.

 

The association also called for more tax and land incentives to encourage more investors in the sector.

 

Vietnam’s leather and footwear industry had experienced a significant growth over past years to become the country's third largest foreign exchange earner after crude oil and garments and textiles.

 

The industry had annually accounted for 8-10% of the country’s total export value, online newspaper VnExpress cited to the Ministry of Industry and Trade’s Light Industry Department as saying.

 

Last year, the country generated US$14.88 billion from leather and footwear exports, a year-on-year increase of nearly 16%. By the year-end, leather and footwear exports were expected to bring home a turnover of US$16.5 billion.

 

Vietnam was currently home to around 800 leather and footwear manufacturers, mainly located in the southern part of the country./.



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