Finishing touches are put to leather products made at the Sai Gon Crocodile Village. Export revenue from bags and suitcases reached US$1.92 billion in 2013, up 26 per cent over last year. — VNA/VNS Photo Van Khanh

HA NOI (Biz Hub) — Export revenue of bags and suitcases was up by 26 per cent, reaching US$1.92 billion in 2013.

Local manufacturers are expecting better growth this year, with increasing global market demand.

The Viet Nam Leather and Footwear Association (Lefaso) is forecasting an export growth of 30 per cent for this group in 2014.

According to Lefaso, many foreign enterprises were seeking providers of finished products. Some manufacturing factories are even moving to Viet Nam from China and Indonesia to gain access to lower tariffs and a relatively better-skilled workforce, the association said.

To benefit from preferential tariffs under various free trade agreements and the Trans Pacific Partnership Agreement, several foreign companies of ancillary industries have also made investments in Viet Nam.

Nguyen Duc Thuan, Lefaso's chairman, told VnEconomy that eight out of 10 global leading brands had expressed interest in moving their orders to Viet Nam.

The movement will be a great opportunity for the local firms to expand production. Local firms would strive to increase investments, expand production scales, and improve the quality of their products to compete with foreign-investor-driven firms in Viet Nam.

Businesses primarily use domestic leather to make student handbags and backpacks, whereas higher quality materials are imported to make luxury handbags.

Thai Binh Shoes is a pioneer in the manufacturing of luxury handbags for world-famous brand names, including Coach of the United States.

The largest importers of Made-in-Viet Nam bags and suitcases are from North America (44 per cent), the European Union (28 per cent), and Asia (21 per cent).

In the past, foreign investors have dominated the handbag export market. However, domestic businesses have gotten into it over the past two years and have set their sights on becoming suppliers to world-famous brands.

Bags and suitcases were part of the leather and footwear exports worth a total of $10.3 billion last year, an increase of 18 per cent over the value of exports in 2012.

The export value of footwear products was estimated at $8.4 billion in 2013, which is15 per cent higher than the previous year, while the export value of handbags surged 26 per cent from the previous year to $1.9 billion, according to Lefaso.

As the industry increased the use of local inputs for production, it only paid $3.7 billion for raw material imports last year, which widened the trade surplus to $6.6 billion, noted Thuan. — VNS