A representative from the Vietnam Leather and Footwear Association said local tanneries had met only 20-30% of material demand of local shoemakers.

To get good quality materials, shoemakers have to import leather from Brazil, Italy and the US at high prices.

According to the ministry, Vietnam imports 6 million sq m of tanned leather every year. Last year, imports amounted to more than $3 billion.

Many footwear importers are shifting their orders from China to Vietnam because of lower labour costs and preferential tariffs that will be granted this year by the EU. The tariff will drop to 3-4% from the current 13-14%, according to the ministry.

Of the total amount of footwear exports, the US accounted for the largest source of export revenue, followed by the UK, Belgium, Germany and Japan, the Netherlands, China, Brazil and Spain.

Last year, Vietnam’s footwear exports reached $7.2 billion. The footwear industry, however, still depends on material imports as it does not have enough local supplies.

Experts said the footwear industry would benefit when Vietnam joins the Trans-Pacific Partnership (TPP) Agreement.

But to receive the full benefits, the industry must use local materials or imported materials from TPP members to enjoy zero tariffs.

Experts also urged domestic companies to make more efforts to improve quality and productivity. As the global economy has yet to recover, key markets for Vietnamese footwear have slumped, and, as a result, companies must plan accordingly.

This is vital because foreign-direct investment companies have contributed more than 76% of the industry’s total export value.

Currently, around 1,100 companies are involved in footwear production in the country, employing 720,000 workers.

In addition, there are thousands of individual producers and handicraft villages that take part in export activities.

With this capacity, the Vietnamese footwear industry is expected to meet increasing export demand.

Source: FDRA