Footwear sector makes efforts to stabilise production

According to the Vietnam Leather and Footwear Association (Lefaso), the industry’s export value in 2011 is estimated at $7.5 billion, including $6.2 billion from footwear, a year-on-year increase of 25 per cent, and 1.3 billion from bags.

Since 2007, footwear export has coped with difficulties, including the decline of import markets, the EU’s anti-dumping tax, high production cost and labour shortage. However, the sector has strived to keep its growth with export value reaching $3.99 billion in 2007, over $4.76 billion in 2008, nearly $4.1 billion in 2009 and more than $5.1 billion in 2010.

The year 2011 marked the return of footwear producers to the domestic market. Made-in-Vietnam footwear consumption in the domestic market in 2011 reached nearly 70 million pairs, accounting for nearly 50 per cent of the total demand, estimated at 130-140 million pairs per year.

The consumption of bags, handbags and backpacks in the domestic market is estimated at 25 million units in 2011, of which 15 million are produced by Vietnamese businesses.

In 2012, the leather and footwear sector expected to face some challenges, with the biggest being declining demand from importers, especially the EU, Vietnam ’s traditional market.

EU supervision over leather capped shoes imported from Vietnam will terminate in March 2012, but it is hard to witness a sudden change in the exports to the market.

Additionally, imported markets, such as Brazil , Mexico and Argentina have planned to investigate footwear imports from Vietnam . Particularly, Brazil has officially started its investigation into Vietnamese and Indonesian imported footwear.

The US market is considered to be a promising market thanks to tariff advantages from the Trans-Pacific Partnership. However, Vietnamese footwear and bag exports will have to compete with other rivals, including those from Taiwan , Australia and Mexico , which are forecast to post an average growth of 12-15 per cent in 2012.

Meanwhile in the domestic market, locally made footwear have to compete with those imported from China . As a result, only about 75 million pairs of shoes are expected to be purchased in 2012.

According to a preliminary survey at some big footwear producers, half the surveyed businesses have signed export contracts till the end of the first quarter of 2012 and 25 per cent have signed contracts until the end of the second quarter amidst the difficulties.

Lefaso forecasted that footwear export will post a growth rate of 12 per cent, earning $7 billion, and bags, 15 per cent and $1.5 billion, respectively, in 2012.