Shoes produced at a company in Ha Noi. Footwear exports reached $7.9 billion in the middle of December, up nearly 15 per cent year-on-year.— VNA/VNS Photo Tran Viet

HCM CITY (Biz Hub)— The footwear industry is expected to reach a record export value of more than US$8 billion this year, according to the Ministry of Industry and Trade.

Footwear exports reached $7.9 billion as of the middle of December, a rise of nearly 15 per cent against the corresponding period last year, according to the General Department of Customs.

Of the total amount, 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, Viet Nam's footwear exports reached $7.2 billion. The footwear industry, however, still depends on material imports as it does not have enough local supplies.

A representative from the Viet Nam Leather and Footwear Association said local tanneries had met only 20-30 per cent 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, Viet Nam imports 6 million square metres of tanned leather every year. Last year, imports amounted to more than $3 billion.

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

Experts said the footwear industry would benefit when Viet Nam 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 per cent 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. — VNS