Workers at a footwear factory in Đồng Nai Province. — Photo baodongnai.com.vn
Đồng Nai Province's footwear industry still faces many risks though it is showing signs of improvement in production and exports in the first half of this year, insiders said.
Lê Quốc Thanh, general director of the province-based Phong Thái Group, said that his group has five member companies. From the beginning of the year, their production and export performance have shown signs of recovery, but not to levels pre pandemic.
Due to insufficient orders, workers in these companies do not work overtime. The recent geopolitic conflicts have also made shipping times on Red Sea route longer and transportation more costly. This directly affects their production recovery, Thanh told baodongnai.com.vn.
Trần Quốc Bảo, deputy director of Casum Shoes JSC in Biên Hòa City, said up to 80 per cent of the firm's footwear products are shipped to the European market. However, his firm lacks large and long-term orders.
Thanh told the online newspaper that prices of raw materials have thus far this year increased by about 20 per cent, but export prices have not increased, so his company's profit has narrowed.
He added that some orders are not profitable but his firm still signs contracts to ensure jobs for workers.
Footwear is Đồng Nai's largest export item, earning the southern province over US$4 billion each year. At the same time, Đồng Nai is also one of the four leading footwear-exporting localities in the country.
Over the past six months of this year, the province's footwear exports topped over $2.2 billion, up 8.2 per cent year-on-year. Many footwear producers in the province have won orders from many international brands such as Nike, Adidas, Reebok and Puma.
Trade experts said the province's footwear products have been exported to over 70 countries and territories but the US and the EU are the two largest outlets, but footwear exports to these markets have been significantly affected by the Red Sea conflict that led to the shipping time increase by 1.5 times and costs rise by 10-20 per cent.
But the footwear industry has two main production seasons which are the beginning of the year and the end of the year. In early 2024, the province's footwear production and exports gradually recovered and showed signs of rebounding. Local footwear producers are expecting the year-end production season to have some breakthrough growth.
Meanwhile, many multinational retail corporations have come to Việt Nam to find more sources of goods for supermarkets, shopping centres and stores, experts said.
The world economy is forecast to continue recovery in the last months of the year, so consumer demand for goods such as footwear will likely increase. That will be an opportunity for businesses to expand exports, they said.
Vưu Lệ Minh, deputy general director of Bình Tiến Biên Hòa Company which produces shoes under the Bitis' brand for both domestic and export markets, said she hopes that in the latter months of the year, domestic and foreign consumers will shop more, helping the domestic footwear industry recover. — VNS