14:37 | 21/07/2016 Industry
(VEN) - Vietnam Economic News’ Viet Nga talked with Vietnam Leather, Footwear and Handbag Association Secretary General Phan Thi Thanh Xuan to explore the reasons behind the leather and footwear sector’s unsatisfactory export results in the first half of this year and how the sector could fulfill its annual targets.
How did the leather and footwear sector’s export situation in the first six months fare?
Leather and footwear exports grew just five percent in the first four months of this year and were even lower in March compared with the same period last year. The situation was better in May and June but the export growth remained lower compared with previous years.
The reasons included political changes leading to the instability of the EU market and a decline in the consumer demand for a variety of goods, including footwear. Therefore, orders from this market strongly decreased. Stable exports to the US and slight increases in exports to other markets could not make up the decrease in orders from the EU.
How do you think businesses can improve their manufacturing capabilities and receive more orders?
Apart from their own efforts, businesses need government support in terms of policy and legal framework. They need to overcome weaknesses in terms of manufacturing skills, ability to meet quality requirements and absorb market information. Businesses can join associations to seek market information. They can also participate in promotional activities launched by ministries, departments, and sectors in fields related to imports, exports, production, and trade. In addition, businesses need to improve their human resources and take the initiative in seeking orders to prevent their dependence on customers and avoid downward price pressures.
On its side, the state needs to support businesses through preferential policies in terms of capital, tax, customs procedures, administrative formalities, and labor, creating favorable conditions for them to promote production and exports.
Could you share your forecasts about leather and footwear exports in the second half of this year?
Exports to Japan and the US are forecasted to remain stable, but complicated political changes in the EU will continue to have an impact on the purchasing power of European consumers. In fact, exports to the EU have tended to decrease in recent years. The EU used to be the largest export market for Vietnamese footwear, but last year it lost this top position to the US. However, the EU will remain a major export market for Vietnamese footwear. Businesses have promoted exports to other potential markets such as New Zealand, Australia, and Japan to avoid risks.
Many domestic leather and footwear businesses have plans to expand production, so the sector’s annual export targets (US$14 billion worth of footwear and about US$3 billion worth of handbags) are expected to be feasible.