Leather, footwear industry sets export target of US$25 billion

Sport shoes are made at Trường Xuân Shoes Co in Hà Nội. — VNA/VNS Photo Trần Việt

Việt Nam's export of leather, footwear and bags this year will likely increase 10-15 per cent year-on-year to about US$23-25 billion, the Việt Nam Leather, Footwear and Handbag Association (Lefaso) has forecast.

The prediction was delivered by Lefaso based on the world economic outlook and developments, control of the COVID-19 pandemic as well as several orders businesses inked for 2022.

Last year, the export turnover of leather, footwear and handbags saw a modest yearly increase of 4.6 per cent to reach $20.78 billion. In which, footwear exports hit $17.77 billion, up 6.1 per cent while export of suitcase and bag products topped nearly $3.01 billion, down 3.2 per cent.

According to Lefaso, traditional markets for Vietnamese leather, footwear and handbags slightly recovered after the impact of the COVID-19 pandemic.

Specifically, the strongest increase was seen in North America with 19.6 per cent, followed by Europe (10.8 per cent) and Oceania (8.9 per cent).

The US remained the largest importer of Vietnamese leather, footwear and bag products with a turnover of over $8.76 billion, up 15.8 per cent year-on-year. China came next with nearly $1.72 billion, down 22.3 per cent and Japan ranked third with over $1 billion, down 10.1 per cent.

The association's report on the industry performance in 2021 showed that the fourth wave of COVID-19 and prolonged social distancing period under Government Directive 16 had caused difficulties for 80 per cent of leather and footwear businesses, especially those in the south which accounted for 70 per cent value and volume of the whole industry.

Many enterprises in southern localities such as HCM City, Đồng Nai, Bình Dương, Long An and Tiền Giang had to stop operation due to their failure to implement "three-on-side" and "one route, two destinations” models.

For a few businesses that were eligible to operate, reduced production capacity due to employees working from a distance, costs made by disruption of the supply chain of raw materials, and costs of COVID prevention such as testing and vaccinations and "3 on-site" accommodations for workers brought them a headache.

Leather and footwear enterprises suffered great losses because they had to stop or reduce production, having their export orders cancelled by customers, but they still had to pay for costs of maintaining factories and wages to employees, Lefaso noted.

In addition, a shortage of containers, skyrocketing logistics and international shipping costs and increasing prices of fuel and raw material caused many difficulties for export enterprises.

But Lefaso said the picture of the leather and footwear industry was brighter from October 2021. When the pandemic situation in HCM City and other southern provinces had improved, businesses resumed their production under the "new normal" stage.

They had also taken advantage of supportive policies of the State and incentives from Việt Nam’s accession to multiple free trade agreements, particularly the Comprehensive and Progressive Trans-Pacific Partnership to boost exports in the last months of 2021.

By 2025, the nation's leather, footwear and handbag industry aims to satisfy most of the country's demand and maintain its position as a key export industry of the country.

By 2030, it aims to reach sustainable development through modern technologies and management systems that adhere to global standards.

The association said it would continue to work with State authorities on policies to help businesses accelerate production and exports. It would also seek more investment in the supporting industry to increase the use of domestic materials.