Workers at the Phu Tho-based shoe maker Vinh Phu finish products for export. Domestic footwear companies have been urged by experts to become more competitive in order to capitalise on rising demand. — VNA/VNS Photo Hong Hoa

HA NOI (Biz Hub)— Vietnamese leather and footwear exporters must become more competitive to capitalise on a shift in demand from China to Viet Nam, advised experts from the Ministry of Industry and Trade.

They were addressing recent increases in orders made with Vietnamese producers from countries such as Japan, amid negotiations for the Trans Pacific Partnership (TPP).

The ministry experts said foreign importers were shifting orders of leather and footwear products from China to Viet Nam, urging Vietnamese companies to improve their competitiveness on the global market.

Viet Nam is finalising its participation in the Trans-Pacific Partnership (TPP) and is negotiating free trade agreements with countries in the European Union to attract further investment to the leather and footwear industry.

Ho Thi Kim Thoa, Deputy Minister of Industry and Trade, said Viet Nam will aim to bring modern technology and prominent brands to the domestic industry.

The Viet Nam Leather and Footwear Association (LEFASO) said importers of prominent leather and footwear products on the world market were planning to shift their orders from China to Viet Nam to capitalise on cost and labour advantages.

The association added that Vietnamese leather and footwear exporters were aware of the opportunities as orders shifted to Viet Nam.

However, Dang Van Chien, Director of the Hung Yen Footwear Joint Stock Company, said the trend was merely a ‘signal' and that foreign importers had only visited Viet Nam to conduct market research.

Many enterprises have said challenges still remain in attracting foreign orders to the sector, adding that high taxes, production costs and limited capacity needed to be addressed first. Currently, 80 per cent of footwear exporters in Viet Nam are engaged in partial production of footwear products with limited capacity to deliver key aspects of end-to-end production, including design.

Domestic producers were also said to suffer from poor management and inadequate investment in new technologies.

Chien said that this made it difficult for enterprises to predict trends and demand in foreign markets.

He urged the Government to support training programmes that would improve the quality of the labour force and attract more foreign partners.

Diep Thanh Kiet, LEFASO's Deputy Chairman, said enterprises should review their market strategies, improve their competitive advantages and build regions specialising in the production of raw materials.

In the first seven months this year, Viet Nam's export value of footwear jumped 15.6 per cent from last year to US$4.79 billion. — VNS