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The Vietnam News

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[Year 2002]

Vietnam footwear industry strives to improve world ranking

HANOI - Vietnam's leather and footwear industry will concentrate on rising in the ranks of the world's largest exporters from its current eighth place through the implementation of five major measures laid out in its 2002 blueprint, said Vietnam Leather & Footwear Association President Phan Dinh Do.

First, the industry will make better use of human resource advantages, increasing training of skilled labor 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 US 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 realize the industry's development strategy to achieve an export turnover of US dlrs 4.7 billion by 2010," Phan Dinh Do emphasized. In 2002, the European Union (EU) is expected to remain the biggest market for Vietnam'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 US 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 US dlrs 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 Vietnam, the Vietnam leather company, two shoe trade centers, 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 US market. It will join hands with the Vietnam 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, labor safety, and trade promotion, Phan Dinh Do added. Vietnam now exports 2.1 percent of the world leather and footwear volume, making it the eighth largest exporter in the world. This year, Vietnam earned US dlrs 1.55 billion from leather and footwear exports, a year-on-year increase of five percent.

Vietnam 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 Vietnam. The EU has become the largest market of Vietnam's leather and footwear products, accounting for almost 80 percent of the country's export turnover in the sector. Vietnam's export of these products to the US is valued at about US dlrs 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 Vietnam'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, Vietnam imports between US dlrs 170-230 million worth of imitation leather and between US dlrs 80-100 million worth of leather from Thailand, Taiwan and South Korea.

Islamic Republic News Agency - December 26, 2001.