Shoes are made by workers at Thai Binh leather and footwear company in the southern province of Kien Giang. — VNA/VNS Photo Le Sen
Global footwear brands like Adidas, Nike and Puma are increasingly turning to Viet Nam for their manufacturing needs due to its affordable labour costs and free trade agreements.
Kasper Rorsted, general director of Adidas, said that Viet Nam produced 44 per cent of its output in 2017, while China, which used to be its biggest manufacturer, only made 19 per cent.
The German company expects that production will continue to shift from China to Viet Nam, and that Viet Nam will produce more than half of Adidas footwear by the end of 2019.
According to a source from Nike, the company began investing more in Viet Nam around five to seven years ago due to the reasonable labour cost and now accounts for almost half of Viet Nam’s total footwear exports.
For Puma, the company also has 30 per cent of its products made in Viet Nam, and plans to do more business here if the US hikes taxes on Chinese footwear and clothing.
Nguyen Duc Thuan, chairman of the Viet Nam Leather, Footwear and Handbag Association (LEFASO), said many multi-national footwear and clothing companies are making their products in this country because of the affordable labour costs and Viet Nam’s free trade agreements with many countries.
Though labour costs have been rising over the years, it is still cheaper than some other big shoes markers like China, India and Thailand. The experienced workforce which has been working with multinational brands also makes Viet Nam an attractive location for big footwear brands.
According to LEFASO, Viet Nam exported around US$14.67 billion worth of footwear last year, ranking second in the world.
It exported to over 100 countries.
In the first four months of this year, the industry’s exports were worth $4.5 billion, and the full-year target is $20 billion.
More than 80 per cent of exports are by foreign-invested companies.
More are expected to come, further boosting exports. — VNS