Exports of leather, footwear and handbags estimated to reach $US 18 billion in 2017

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Footwear manufactured for export

In 2016, the export turnover of leather, footwear and handbags reached $US 16.2 billion (under the plan of $US 17 billion), up by 8.8%. This growth rate was much lower than the growth rate of 23.6% in 2014 and 16% in 2015.

According to Lefaso, in 2016, the export activity of leather and footwear faced many difficulties due to the sharp decrease in orders form the EU. Along with that, the industry’s exports to the ASEAN market were also unstable in the last year. From 1^st January 2016, the tax of leather, footwear and handbags trading in the internal area reduced to 0%, together with this, the trade protection barriers tended to increase. Besides, the domestic enterprises faced many difficulties due to lack of capital and the high increase of input costs, significantly affecting the industry’s exports

In 2017, international experts forecast that the world economy will be more prosperous than 2016. China continues its policy on cutting investment incentives in the fields of textiles and footwear to focus on higher technology sectors. Thus, some processing orders will be likely to be shifted to Vietnam. The Vietnam–EU free trade agreement which will take effect at the beginning of 2018 with attractive tariff preferences will also be a motivation to attract investors.

In addition, the leather and footwear industry will also renew the production models and join in the leather and footwear production chain in the country, the region and the world; at the same time, renovating technologies and equipment, and modernize and expand the production scale of domestic enterprises to increase productivity and quality of products for export.

With positive assessments on the market, and the orders, the leather, footwear and handbag industry has set out a big target for 2017 with $US 18 billion of export turnover, increasing by 10% compared to 2016.

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To take advantage of opportunities and overcome challenges, according to Lefaso, domestic enterprises have to rise and change the form of production, invest and renew equipment and technology and proactively integrate to join in the global supply chain.