Leather footwear and handbag exports are expected to top 12 billion USDthis year, achieving the target, the Vietnam Leather and FootwearAssociation (Lefaso) has said.
They were worth 10.4 billion USDlast year to rank third in the country's list of key exports, LefasoDeputy Chairman Diep Thanh Kiet said, adding that the exports were verygood in the first half of the year, with footwear exports going up bymore than 14 percent and handbags by over 18 percent.
But he andothers at a seminar in Ho Chi Minh City on June 23 agreed thatsmall-scale production, poor development of support industries, and lackof skilled workers are making the leather industry's growthunsustainable.
The industry imported nearly 4.2 billion USD worthof leather and other raw materials last year, which accounted for 40percent of its total export revenues, Kiet told the seminar organised byLefaso, the Vietnam Chamber of Commerce and Industry (VCCI), andVPBank.
Up to 70 percent of the leather needed for footwear andhandbag production is imported, mainly from the Republic of Korea,Taiwan (China), Italy, and Thailand.
Asked whether the problemwith China is affecting the industry, Kiet said leather imports fromChina account for just 6-7 percent, too little to have an effect.
Only40 percent of fabric and other raw materials can be sourced locally,and the country spent more than 3 billion USD to import the last year,mostly from China.
But there is now a growing trend of shiftingproduction of fabric and others from China to Vietnam to take benefit ofthe free trade agreements Vietnam is negotiating.
In the nextfew years, local production can supply more than 50 percent and the restcan be procured from Taiwan, Thailand and Indonesia, he said.
Withlower production costs compared with China, high demand in both thelocal and foreign markets, and advantages from the upcomingTrans-Pacific Partnership, the industry continues to have greatpotential for development, said Pham Thi Thu Hang, General Secretary ofthe VCCI.
To capitalise on development opportunities, companiesshould focus on improving the skills of their workers, diversify theirexport markets, and pay more attention to the domestic market, she said.
Theyalso need to restructure their organisation based on competitiveadvantages, strengthen their design capabilities, build brands, andimprove technologies to reduce energy consumption and protect theenvironment, she said.
Most importantly, firms should concentrate on developing their supply chain, with a focus on feedstock, delegates said.
Kietsaid the Government should be more pro-active in setting up industrialparks for tanning leather, a key material for the industry.
PhanChi Dung, Director of the Ministry of Industry and Trade's LightIndustry Department, said under the development plan for the footwearindustry, the Government wants to raise local content in production to60-65 percent by 2015 and 75-80 percent by 2020.
The targets arehard to realise, he admitted, but the signing of the FTA with the EU andthe TPP is expected to provide a boost to the rate.
There are 812 firms now in the country's leather and footwear industry, he said-VNA
They were worth 10.4 billion USDlast year to rank third in the country's list of key exports, LefasoDeputy Chairman Diep Thanh Kiet said, adding that the exports were verygood in the first half of the year, with footwear exports going up bymore than 14 percent and handbags by over 18 percent.
But he andothers at a seminar in Ho Chi Minh City on June 23 agreed thatsmall-scale production, poor development of support industries, and lackof skilled workers are making the leather industry's growthunsustainable.
The industry imported nearly 4.2 billion USD worthof leather and other raw materials last year, which accounted for 40percent of its total export revenues, Kiet told the seminar organised byLefaso, the Vietnam Chamber of Commerce and Industry (VCCI), andVPBank.
Up to 70 percent of the leather needed for footwear andhandbag production is imported, mainly from the Republic of Korea,Taiwan (China), Italy, and Thailand.
Asked whether the problemwith China is affecting the industry, Kiet said leather imports fromChina account for just 6-7 percent, too little to have an effect.
Only40 percent of fabric and other raw materials can be sourced locally,and the country spent more than 3 billion USD to import the last year,mostly from China.
But there is now a growing trend of shiftingproduction of fabric and others from China to Vietnam to take benefit ofthe free trade agreements Vietnam is negotiating.
In the nextfew years, local production can supply more than 50 percent and the restcan be procured from Taiwan, Thailand and Indonesia, he said.
Withlower production costs compared with China, high demand in both thelocal and foreign markets, and advantages from the upcomingTrans-Pacific Partnership, the industry continues to have greatpotential for development, said Pham Thi Thu Hang, General Secretary ofthe VCCI.
To capitalise on development opportunities, companiesshould focus on improving the skills of their workers, diversify theirexport markets, and pay more attention to the domestic market, she said.
Theyalso need to restructure their organisation based on competitiveadvantages, strengthen their design capabilities, build brands, andimprove technologies to reduce energy consumption and protect theenvironment, she said.
Most importantly, firms should concentrate on developing their supply chain, with a focus on feedstock, delegates said.
Kietsaid the Government should be more pro-active in setting up industrialparks for tanning leather, a key material for the industry.
PhanChi Dung, Director of the Ministry of Industry and Trade's LightIndustry Department, said under the development plan for the footwearindustry, the Government wants to raise local content in production to60-65 percent by 2015 and 75-80 percent by 2020.
The targets arehard to realise, he admitted, but the signing of the FTA with the EU andthe TPP is expected to provide a boost to the rate.
There are 812 firms now in the country's leather and footwear industry, he said-VNA
