Vietnamese enterprises step into big shoes under FTA demands

15:01 | 06/12/2019 Industry

(VEN) - Many leather and footwear businesses haven’t taken advantage of new-generation free trade agreements (FTAs) due to the lack of qualified workers and outdated technology. Vietnam Economic News’ Thuy Duong spoke about this with Nguyen Quang Vu, Chairman of the Binh Duong Leather and Footwear Association. 

vietnamese enterprises step into big shoes under fta demands
Nguyen Quang Vu, Chairman of the Binh Duong Leather and Footwear Association

Has the leather and footwear sector taken advantage of FTAs signed by Vietnam?

Vietnamese leather and footwear enterprises haven’t taken advantage of FTAs signed by Vietnam, as they are still weak in terms of management capability and remain unable to fulfill long-term and large orders. However, in the future and in the long run, FTAs are expected to provide opportunities for enterprises to learn from big partners’ management expertise.

What deters leather and footwear enterprises from taking advantage of FTAs?

There are many challenges that make leather and footwear enterprises unable to take advantage of FTAs, a major one of which is outdated technology. Mid-level and senior officials in the sector in general haven’t kept up with the trend, while the industry’s labor force is not as abundant as it used to be. For example, in the southeastern province of Binh Duong, due to the lack of workers, enterprises had to shift part of the shoe upper outsourcing to western and central provinces.

What does the industry need to do to fulfil big orders and take opportunities provided by FTAs?

Large enterprises have invested in machinery and technology, including programming equipment and robots, while small businesses find it difficult to improve their development due to their limited financial, technological and management capability. Businesses need to be determined to give up outdated machinery, improve management, add value to their products and improve production transparency.

Joint strength and cooperation is important to speed up production and product digitation. Businesses need to pay due heed to workforce training and development if they are to increase productivity, and at the same time ensure their production environment meets global standards. They should have new product designs suitable with new market trends.

Industrial zones should be developed for small to medium-sized leather and footwear enterprises to increase

connectivity between them in production and sales.

Thuy Duong