Find solutions for a solid leather footwear development

	Exports of leather, footwear and handbags estimated to reach $US 18 billion in 2017
	Leather, footwear sector forecasts US$18 bln of export earnings
	Footwear makers told to invest

Leather footwear and handbag production at Vien Thinh Shoes Company. Picture: N.Hue

According to the objective of the scheme, the industrial value growth rate of leather footwear industry in 2016-2020 will be at 11.62% per year, striving to reach 24-26 billion USD by 2020; in the period of 2021-2025, it will grow by 8.87% per year, reach 35-38 billion USD by 2025; the period of 2026-2035 will grow 6.04% per year and by 2035 export turnover reach 50-60 billion USD. The scheme also targets to gradually increase the localization rate of various kinds of products. By 2020, the localization rate is expected to increase to 45%, 47% in 2025 and 55% in 2035 respectively.

To achieve these goals, Mr. Nguyen Manh Khoi, Deputy Director of the Leather and Shoe Research Institute, we should implement many measures such as: continuing accelerate administrative reform in customs procedures, tax policy which directly related to leather-shoe industry, create favorable business environment; developing market and product branding; inspecting and supervising fake goods, imitation goods and smuggled goods in order to control the domestic market; encouraging businesses to invest in projects to produce raw materials, projects to produce high-class fashion in order to contribute to the rapid transformation of product structure, increase the export value of products; focusing on building centers for advanced scientific research and technology transfer, which is located in convenient places for the coordination between units including scientists, enterprises and State, among that, the enterprise should be the beneficiaries of the research results. In addition, it is necessary to promote the application of cleaner production technology in enterprises and existing tanning facilities to ensure the high quality of finished leather production and the friendliness in term of the environment.

Mr. Diep Thanh Kiet, vice president of the Vietnam Leather and Footwear and Handbag Association, said that in order to have a solid plan for the footwear industry, the project must have an analysis of the economic situation of Vietnam and the world in the period of 2017-2035, which forecasts the policies of countries and major regions of the world. In addition, it is necessary to work with customers on development strategies and product sales trends over the next five years. At the same time, there must be an analysis of foreign direct investment (FDI) enterprises because they are accounting for 80% of the production capacity of the leather footwear industry.

According to Mr. Diep Thanh Kiet, the situation of leather and footwear industry in the Vietnam and the world has changed a lot. In the domestic is the trend of production shift in low labor cost regions (Central, South West). In the world, leather footwear production is competing by greater productivity through corporate administration. In addition, factories are involving in product design to produce higher productivity products, ensuring the lowest production time. The application of automation is also increasingly popular, while Vietnamese companies only produce about 6 sports pairs of shoes/person/day, FDI companies have produced 15-20 pairs/person/day thanks to automation. Customers are increasing the control of the supply chain. The protection of production by the application of technical barriers in importing countries is increasing. Consumption of clean products produced by green technology is raising, orders are smaller, products become more and more versatile...

Mr. Diep Thanh Kiet also said that the project must specify the target objectives of planning which is the proportion of Vietnamese enterprises, the ability to provide raw materials, the ability to occupy the domestic market. The solution must also be divided into two groups: a set of the general solution with long-term and solid development, a set of solutions that focus on specific objectives, assign specific tasks and responsibilities to involved parties.

Regarding the development of materials resources and supporting industries for the leather footwear industry, Mr. Nguyen Quoc Tuan, Director of Vinh Thong Company said about the development of supporting industries, our enterprises still have to look after their self, the raw materials are still 70% dependent on foreign. Therefore, for the objectives of the project to be realistic, the State must have specific standards and clear directions for enterprises to develop supporting industries. The renovation of machinery and equipment of enterprises is also difficult due to lack of capital and many risks, the state should delineate sustainable development enterprises to support capital or policy to help businesses invest in technology, machinery.

The Leather and footwear industry continues to grow without TPP VCN- This was confirmed by the representative of the Vietnam Leather, Footwear and Handbag Association (Lefaso) at the Vietnam Leather and ...

Reflecting the difficulties faced by enterprises, Viet A Chau representative said that the annual minimum salary increase of 10-15% is reducing the labor cost advantage of Vietnam and reduce the competitive power of enterprises. The investment to increase labor productivity of enterprises is not facing the difficult in capital. To support enterprises, besides the general policy applied to the whole sector, it is necessary to have separate policies applied to specific enterprises. In addition, in order to help enterprises not to lose on the domestic market, we need to have appropriate policies to protect domestic production and strict control of small volume goods, counterfeit and imitation goods...