Vietnam footwear sector sees marginal '99 growth
HANOI - Vietnam's footwear industry expects slight
growth this year although Asia's economic crisis has taken a toll on the
key export sector, officials said on Wednesday.
``Last year earnings were tight as the market was hit by the impact of
the regional financial crisis,'' said an official at the Vietnam Shoe and
Leather Corporation, which oversees state-run footwear companies.
``But we hope orders in 1999 will be up and incorporate more
destinations,'' he told Reuters.
A senior executive at the Vietnam Shoe and Leather Association --
which groups state and private producers -- said footwear exports this
year were expected to earn between $1.1 billion and $1.15 billion, up
from around $1 billion last year.
Vietnam earned $955 million in 1997 from footwear exports, a rise of
80.2 percent from 1996, official statistics show. The sector accounts
for 10 percent of Vietnam's overall exports.
The association's members have an estimated annual capacity of 260
million pairs of shoes and slippers.
Export earnings last month were estimated by the statistics office at
$90 million, a rise of 3.4 percent on a year earlier.
Another industry official blamed the levelling off in footwear export
growth on high production costs in Vietnam. He said labour was
cheaper in China and Indonesia.
Currency devaluations in the region have hit Vietnamese
competitiveness as well, he said.
Many large international footwear makers, such as Nike Inc,
sub-contract work in Vietnam to South Korean and Taiwan firms
operating in the country. A few of these firms have had to lay off some
workers due to the recent Asian turmoil.
The official from the Vietnam Shoe and Leather Corporation said 85
percent of footwear exports went to the European Union. Vietnam
exports little footwear to the lucrative U.S. market because it has no
trade agreement with Washington.
Vietnam has given little attention to the potential of the domestic
market, which has blossomed since the adoption of economic reforms
in the late 1980s, officials said.
More than half of Vietnam's 79 million people are below 25, and urban
youth have rapidly followed global trends. But most high-quality fashion
shoes are still imported, officials said.
Reuters - February 03, 1999.
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