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Footwear exports targeted at over $35bn by 2025

Released at: 10:03, 21/06/2017

Footwear exports targeted at over $35bn by 2025

Illustrative image (Source: baomoi.com)

Draft plan for footwear industry sets export targets for 2025 and 2035.

by Luong Nhi

Vietnam’s footwear industry targets export turnover of $35-38 billion by 2025 and $50-$60 billion by 2035, according to a draft plan from the Ministry of Industry and Trade (MoIT) on developing the industry.

The target is still under discussion and doubles 2016’s export turnover of about $16 billion. The plan is expected to turn the footwear industry into a key industry in the economy, with annual growth averaging about 11.6 per cent. The localization rate is to be 45 per cent by 2020, 47 per cent by 2025, and 55 per cent by 2035.

Vietnam has around 1,700 footwear enterprises, some 800 of which are large enterprises. They directly provide jobs to 1.2 million people, Mr. Nguyen Manh Khoi, Deputy Director of the Leather and Shoe Research Institute, said at an April workshop held by MoIT. In the 2011-2015 period, he added, growth ranged from 15 to 20 per cent. In 2016, footwear export turnover accounted for 9.2 per cent of total export turnover, up 8.8 per cent compared to 2015, and was ranked third in the world in quantity and second in export value.

Vietnam’s exported footwear can be found in almost 50 countries, with main export markets being the US, the EU, China, and Japan. FDI enterprises contributed 81 per cent of total export turnover in the industry last year, though domestic enterprises have been assessed as being more confident in foreign and domestic markets. Export turnover was $15 billion in 2015.

If current growth rates are maintained, footwear export turnover by 2020 will stand at $20 billion.

According to the General Statistics Office, in the first five months of this year, footwear continued to be the key export, with turnover of $5.6 billion, up 10 per cent year-on-year. 

Despite seeing rapid growth, mechanical engineering, machinery, and equipment for the industry has lagged behind. Equipment is mostly imported from China and Taiwan, and over 60 per cent of leather and artificial leather for the industry is also imported.

Vietnam is one of the three largest producers of leather shoes and bags, following China and India. It only accounts for 25 to 30 per cent of the value in a supply chain, however.

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