Fears that first-half success will be hard for Vietnam to repeat
27/07/2012
Exports of footwear in the first six months of the year had a value of $3.4 billion, 25% up on the figure for the same period in 2011. Exports to the European Union accounted for more than 45% of the total revenues.
However, since the figures were first reported chairman of industry association Lefaso, Nguyen Duc Thuan, has told local media that shoe producers are worried about a lack of orders for the fourth quarter of the year. He said only a few large producers, including Dong Hung, An Lac, Binh Tien, Truong Loi and Lien Phat, have strong order books for the rest of the year, while many others have already had to cut back on production.
Apart from economic challenges in some of the main markets, Mr Thuan said buyers of Vietnamese-made shoes in the US, Japan and in the European Union were imposing stricter quality, environmental and corporate social responsibility requirements that “have been difficult for domestic exporters to meet”. He added that Vietnamese footwear manufacturers have been slow to respond to the changing export market.
He pointed out that, in spite of being able to offer low labour costs, Vietnam’s competitiveness was being affected by its need to import two-thirds of the raw materials required to make shoes. He called on the government to re-introduce a mechanism for deferring the import tax on raw materials. Under a previous arrangement, manufacturers could wait nine months before paying the import duty on materials they imported, but a recent change has meant having to pay that tax immediately.
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