ASEAN KEY DESTINATIONS
Vietnam's footwear, handbag production jumps on strong Japanese orders
The leather and footwear sector expects to surpass its target of US$9.7 billion in turnover this year, as many Japenese importers have shifted their orders from China to Vietnam.
Turnover is expected to increase even more if the Trans-Pacific Partnership (TPP) and the Free Trade Agreement (FTA) between Vietnam and the EU are signed.
Many importers, including those from Japan, have shifted orders from China to Vietnam. Exporters already have had orders through the first quarter of next year, according to the Vietnam Leather and Footwear Association.
Luu Van Thanh, director of Hoang Kim Handbag Ltd Co in Binh Tan District, said the company had been meeting with visiting Japanese groups nearly every day. He said he had never seen this many Japanese businesses coming to Vietnam.
Thanh's company, which employs 100 people, exports all of its products, including to Switzerland, Germany, France, and Japan.
He said the Japanese handbag market, which has strict quality standards, would be both long-term and stable.
Many importers viewed Vietnamese standards for handbag production as higher than those of other Asean countries such as Indonesia, Cambodia and Myanmar, he said.
Truong Thi Thuy Lien, director of Lien Phat Footwear Ltd Co in Binh Duong Province, said that after two months of surveying the market and sending samples, her company had received its first orders from a Japanese partner.
The company's export orders are full until the end of the year, according to Lien.
The footwear sector targets $8 billion in turnover and the handbag sector $1.7 billion this year, according to a report in the Sai Gon Giai Phong (Sai Gon Liberated) newspaper.
The leather and footwear association said the TPP and FTA would cut tariffs to zero per cent, which would make Vietnamese exports more competitive with China and India.
The sector said it expected to see export growth jump next year after the signing of the TPP and FTA.
In the first six months of the year, the footwear sector reached more than $3.99 billion in turnover, an increase of nearly 14 per cent compared to the same period last year.
The US accounts for 32 per cent of export turnover ($1.27 billion).
Bag and suitcase products also saw an export growth rate of 22 per cent in the first six months, with a turnover of $911 million.
Exports to the US accounted for 44 per cent of total export turnover ($391 million), an increase of nearly 30 per cent over the same period last year.
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