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Leather & footwear exports to reach $26bn by 2020

Released at: 16:40, 10/04/2017

Leather & footwear exports to reach $26bn by 2020

Illustrative image. Photo: Nhan Dan online

MoIT seminar hears comments on revised planning for sector.

by Uy Vu

Vietnam is targeting to earn between $24 billion and $26 billion from leather and footwear exports by 2020 under a revised plan for the leather and footwear industry’s development to 2025 with a vision to 2035, according to a report from the Vietnam News Agency.

The Ministry of Industry and Trade held a seminar in Ho Chi Minh City on April 7 to collect comments from industry experts and enterprises on the revised plan.

The industry is to develop at a high speed to maintain its position as one of the country’s key export industries and create more jobs with higher incomes for workers.

Implementing better corporate social responsibility and raising the number of trained workers are other objectives.

The sector’s annual production value is expected to grow by 11.62 per cent in the 2016-20 period, 8.87 per cent in the 2021-25 period, and 6.04 per cent in 2026-35 period.

It will also strive to record annual export growth of 10-15 per cent in the 2016-20 period, 8-9 per cent in the 2021-25 period, and 4-5 per cent in the 2026-35 period, with export revenues to reach $24-26 billion by 2020, $35-38 billion by 2025, and $50-60 billion by 2035.

It also targets raising the local content ratio in footwear products to 45 per cent by 2020, 47 per cent by 2025, and 55 per cent by 2035.

Assessing the implementation of the master plan, which was approved in 2010, Mr. Nguyen Manh Khoi, Deputy Director of the Leather and Footwear Research Institute, said the leather and footwear industry has developed strongly and made positive contributions to Vietnam’s economy.

Some targets set out in the master plan have been implemented quite well, such as basically completing the equitization of State-owned enterprises and forming joint ventures, and co-operating with all economic sectors, which have created the conditions for businesses in the sector to thrive.

The sector has invested in upgrading equipment, building new large-scale plants with advanced equipment and technology to raise production capacity, he said.

Most companies have applied management systems in accordance with ISO:9000, ISO:14000, and SA:8000 standards, and been involved in corporate social responsibility activities.

Some targets, however, have not been met, he added.

For instance, the local content ratio remains low, at about 35-40 per cent, and the number of enterprises applying automation in designing and developing products is also modest.

Other targets, including the transformation of product structure and establishing a specialized industrial zone for the sector, especially for leather tanning, have not been done.

Delegates at the seminar said that demand for raw materials will also surge strongly, and if support industries are not fully developed the industry will have to depend greatly on imports, which will make it hard to reach targets.

There are some 1,700 enterprises in the sector in Vietnam, of which 800 are of large size. Foreign-invested enterprises account for 80 per cent of the sector’s exports.

Leather and footwear products are among Vietnam’s key export items, reaching $16.2 billion last year and accounting for 10 per cent of the country’s total exports.

They are expected to top $17.88 billion this year.

Vietnam is the third-largest footwear producer and second-largest footwear exporter in the world.

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