Footwear sector further penetrates global supply chain
Vietnam’s footwear sector is now beginning to see positive signs after export revenue for footwear and handbags fell 11 percent year-on-year to 19.5 billion USD in 2020, making it one of the sectors hardest hit by COVID-19.
At a footwear factory in Vietnam (Photo: haiquanonline.com.vn)
Hanoi (VNA) - Vietnam’s footwear sector is now beginning tosee positive signs after export revenue for footwear and handbags fell 11percent year-on-year to 19.5 billion USD in 2020, making it one of the sectors hardesthit by COVID-19.
Vietnamese companies have proved their capacity in research anddevelopment (R&D) and design, according to Chairman of the Vietnam Leather,Footwear and Handbag Association (LEFASO) Nguyen Duc Thuan.
Signs show that Vietnam is further penetrating into theleather-footwear supply chain, he said, as the design and R&D processesrake in high added value for products.
The domestic supply of materials for the sector now represents 60percent. Local businesses can take the initiative in producing soles and moulds,as well as packaging and labelling. This is attributable to their activeness inmanufacturing materials locally, Thuan added.
In particular, the Gia Dinh Footwear JSC has set up industrial clustersto attract investment in material production and workshops serving the industry.Its CEO Nguyen Chi Trung said orders for the footwear sector have been on an upwardtrend since the end of 2020.
As order numbers have recovered and are even on the rise, all workershave been able to return to production.
Shortages are likely, though, as there will be high demand for workers inApril and May, Trung said.
Other businesses in the sector are also hoping that 2021 will see asurge in both orders and revenue thanks to advantages held post-pandemic.
Of particular note, the EU-Vietnam Free Trade Agreement offers a major opportunityfor Vietnam to bolster exports to the EU.
Footwear companies have been advised to pay due regard to sustainabledevelopment, most notably in environmental and labour issues, to devisesuitable strategies.
Thuan noted that the sector has set a target of earning more than 20billion USD in exports this year, to offset losses posted in 2020.
Though China still accounts for half of the global footwear production,Vietnam’s exports to its northern neighbour surged 15 percent for the firsttime last year, he noted./.
Prime Minister Nguyen Xuan Phuc asked the garment-textile and footwear sectors to promote the building of Vietnamese brands and supply chain linkages, and develop supporting industries during a working session with the sectors’ representatives in Hanoi on November 23.
A diversified supply chain and numerous free trade agreements (FTAs) have set the stage for a strong comeback for Vietnam's footwear and textile sector, said experts and industry leaders.
The UK-Vietnam Free Trade Agreement (UKVFTA), expected to come into force in the beginning of 2021, is promising several export opportunities to the European market for Vietnamese garment-textile and footwear enterprises.
The COVID-19 pandemic will continue creating trouble for the leather-footwear sector in Europe and the US – its key markets for export, in 2021, the Sai Gon Giai phong newspaper reported, citing experts’ opinions.
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At a footwear factory in Vietnam (Photo: haiquanonline.com.vn) 
