Hanoi (VNS/VNA) - The leather andfootwear sector needs to develop supporting industry to reduce reliance on theimport of raw materials, enhance competitiveness and boost high-value exports, saidDeputy Minister of Industry and Trade Cao Quoc Hung.

Hung made the statement at the Vietnam Leather,Footwear and Handbag Association (Lefaso)’s conference on December 26, sayingthat as a part of the rapidly-changing fashion industry, the leather andfootwear sector must focus on developing an appropriate supporting industry,even though it would take significant time and resources.

Hung said the Ministry of Industry and Tradewould help domestic firms build a development strategy for the leather andfootwear supporting industry and raise incentive policies in credit, technologyand land for domestic producers, especially those of small and medium sizes.

He urged the association to enhance linksbetween domestic producers and the foreign-invested sector to help themparticipate deeply in the global value chain.

The leather and footwear industry of Vietnam isstill heavily reliant on raw material imports.

The association’s statistics show that 60 percentof raw materials for the industry must be bought from foreign countries, ascurrent production capacity of the supporting industry is modest.

According to Hung, free trade agreements likethe Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) were widening doors forVietnam’s footwear exports.

However, the sector must focus on developing thesupporting industry together with using advanced technologies in production toenhance competitiveness, cope with technical barriers to trade and boostexports, Hung stressed.

Phan Thi Thanh Xuan, Lefaso’s secretary general,said the gap between the foreign-invested sector and the domestic sector wasnarrowing, citing the association’s statistics that the export share of thedomestic sector increased from 19.5 percent in 2016 to 21.2 percent in 2018.

The sector’s exports in January-November reached17.68 billion USD, a rise of 8.4 percent over the same period last year, andpoised to reach the target for the full year of 19.5 billion USD, Xuan said.

Vietnam came only after China in footwearexports, the association said, but added that average export prices of Vietnamwas 15 USD each pair, 1.6 times higher than China’s average prices.

Xuan said the association was optimistic aboutthe development of the sector in 2019 as the demand of major export markets,like the US, EU, China, the Republic of Korea and Japan remained high. Inaddition, the CPTPP and EVFTA and the US-China trade war would createopportunities for the leather and footwear industry to boost exports.

The association forecast that footwear andhandbag exports would maintain a growth rate of 10 percent in 2018 to reachrevenue of 21.5 billion USD.

Vietnamese footwear products are now present inmore than 100 countries and territories, according to the association.-VNS/VNA