leather and footwear

LEATHER AND FOOTWEAR INDUSTRY STRIVES TO IMPROVE ITS WORLD RANKING

   Ha Noi, Dec. 22 (VNA) -- Viet Nam's leather and footwear industry will focus efforts on carrying out five major measures contained in its 2002 blueprint to improve its present ranking as the world's eighth largest exporter, says Viet Nam Leather & Footwear Association President Phan Dinh Do.
   First, the industry will make better use of human resource advantages, increasing training of skilled labour and strengthening managerial and productive capabilities in a market economy, he explained.
   Second, it will promote in-depth investment, renew technologies, and modernize technical equipment and production lines in a bid to improve product quality.
   Third, more investment will be channelled into developing raw material production as well as increasing design creativity and market competitive edge.
   Fourth, the industry will strive to reduce the rate of contractual production and increase direct exports of its products to customers.
   Fifth, it will expand foreign product outlets, especially in the U.S. market, as the bilateral trade agreement has already come into effect. At the same time, the industry will continue to improve product designs to meet the demand of domestic customers.
   "These are long-term measures to realise the industry's development strategy to achieve an export turnover of USD 4.7 billion by 2010," Phan Dinh Do emphasized.
   In 2002, the European Union (EU) is expected to remain the biggest market for Viet Nam's leather and footwear with an estimated rise of 8-9 percent. However, a large quantity of the products will also be exported to the U.S. market as tax rates are expected to fall to between zero and 20 percent as a result of the trade pact.
   "In order to earn an export turnover of USD 1.8 billion next year, many enterprises in this sector have revamped their workplaces, improved working conditions, and renewed their production lines and technologies," Do stated.
   He said the industry plans to establish two shoe-making industrial parks in both northern and southern Viet Nam, the Viet Nam leather company, two shoe trade centres, and a financial company.
   In addition, it will arrange dialogue and contact between Vietnamese and American leather and footwear producers and traders to promote mutual understanding and provide Vietnamese producers and exporters with knowledge of the U.S. market.
   It will join hands with the Viet Nam Chamber of Commerce and Industry and the Trade Promotion Department (the Trade Ministry) to work out a series of projects on technical support, vocational training, labour safety, and trade promotion, Phan Dinh Do added.
   Viet Nam now exports 2.1 percent of the world leather and footwear volume, making it the eighth largest exporter in the world. This year, Viet Nam earned USD 1.55 billion from leather and footwear exports, a year-on-year increase of 5 percent.
   Viet Nam is capable of producing more than 360 million pairs of shoes and sandals, 22 million square feet of processed leather, and more than 30 million of leather and canvas bags of different designs. Products with famous trademarks such as Nike, Reebok, Adidas, Diadora, Timberland and Clarks have been manufactured in Viet Nam.
   The EU has become the largest market of Viet Nam's leather and footwear products, accounting for almost 80 percent of the country's export turnover in the sector. Viet Nam's export of these products to the U.S. is valued at about USD 100 million because of high tax rates that range between 20-80 percent.
   In addition, the industry is seeking to export its products to Russia, Eastern Europe, the Middle-East and Africa, according to Phan Dinh Do.
   At present, about 80 percent of Viet Nam's businesses in the sector have been involved in contractual production with foreign partners. Accordingly, they are largely dependent on foreign partners for technical equipment, technology, product design, raw material supplies, additive materials, and markets.
   Each year, Viet Nam imports between USD 170-230 million worth of immitation leather and between USD 80-100 million worth of leather from Thailand, Taiwan and South Korea.--VNA