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Despite being a sizeable leather shoe exporting country, domestic footwear producers are still heavily dependent on raw material imports as they fail to find quality leather supplies within the country. One shoe maker is planning to buy its own tannery.
Lien Anh, located in Binh Duong Province report that it has suffered a damage of US$100,000 from importing a batch of substandard leather. However, it still has to import another batch of leather for production as domestic leather supplies are regarded as poor quality.
Depending on material imports is not a wise solution, so the Lien Anh plans to buy a tannery in Dong Nai Province and make investment in new technology to secure materials for production, Truong Thi Thuy Lien, Deputy General Director of Lien Anh Company, told the Saigon Daily on November 27.
They say that local tanneries have offered low-quality cow hides that fail to meet export standards and it is also difficult to control the quality of imported hides into the country.
Other shoe producers have also depended on imported materials. To get high-quality materials for production, they import leather from Brazil, Italy and the US at high prices. As a result, prices of the final products have increased cutting into their competitiveness.
Diep Thanh Kiet, Deputy Chairman of the Vietnam Leather and Footwear Association (Lefaso), said that there are over 400 leather shoe companies in the country making a great contribution to the total export revenue. However, local tanneries meet only 20-30% of material demands of local footwear enterprises.
General Secretary of the HCMC Leather and Footwear Association Nguyen Van Khanh said that many tanneries in the city have moved to other localities after the recent environment scandal of the Hao Duong Company.
The city now has around ten tanneries with a daily output of 10 tons each, including large factories such as Hung Thai and Dang Tu Ky. Hao Duong Company mainly imports hide and tans the product for exports.
Meanwhile, there are around 100 leather shoe enterprises in the city. Most firms have to import materials from China, Taiwan, Korea and the US for production as the domestically made materials has a low quality.
According to the Ministry of Industry and Trade, Vietnam used to import six million square meters of tanned leather each year.
Source: Saigon Times Online