Bagging an export treat

During 2010-2011 bags items earned $1 billion in annual export value and in 2011, the country gained more than $1.3 billion from bag exports, leaping 33 per cent against 2010. Export of bags and suitcases brought the country over $120 million in January 2012 alone, surging 14.2 per cent on-year.

Bag exports have great potential as leading bag manufacturers, currently doing processing in China, intend to move their production facilities to Vietnam, said Vietnam Leather and Footwear Association’s (Lefaso) deputy chairman Diep Thanh Kiet.

Kiet said local firms were capable of tapping this golden opportunity and taking advantage of import partners’ technical support.

In this context, TBS Group, based in southern Binh Duong province with two decades’ experience in footwear export production, has pumped $10 billion into building a bag manufacturing plant in the province’s Song Than Industrial Park in mid-2011.  The plant, employing 3,000 workers and also encompassing design and sample production workshops, started production in October, 2011.

Before building the bag plant, TBS Group reportedly inked a $10 million contract for export bag production with Coach, one of five US leading bag brands. In later months of 2011, the group had shipped 20,000 bags to Coach.

Right in early 2012, the group clinched a big contract valued at $50 million for exporting 1.8 million bags to Coach in 2012.

Under TBS Group estimations, per capita revenue in the bag sector is 30-40 per cent higher than that in footwear sector as a bag has an export price averaging $30-50 against $20-25 for a pair of export shoes.

Ladoda’s general director Dinh Quang Bao said there were changes in global export bag supply market. In the past, importers from the US, Europe or South America mainly sourced products from China. Made-in-Vietnam leather products now grab their growing attention, entailing opportunities for local firms to raise export value.

“To make the most of forthcoming opportunities, each firm needs to mull suitable investment plans matching specific business criteria of different customer segments,” said Kiet.

Lefaso forecast total export value from leather and footwear products and bags could reach $8.6-$8.8 billion in 2012, with strong growth from the part of bag and leather purse groups compared to 2011.