~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

[Year 1997]
[Year 1998]
[Year 1999]
[Year 2000]
[Year 2001]

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.