No longer just processing, leather and footwear enterprises have invested in technology, proactively designed designs and materials, and advanced to higher levels in the production chain.
Make good use of FTAs
Sharing on the sidelines of the Conference summarizing the work of 2024 and deploying the tasks of 2025 of the Industry and Trade sector held on the afternoon of December 23, Ms. Phan Thi Thanh Xuan - Vice President and General Secretary of the Vietnam Leather, Footwear and Handbag Association - said that the leather and footwear industry is an industry that makes good use of free trade agreements (FTAs), reaching over 96%. Especially in the EU market, the regulations on origin are quite favorable, the industry is also proactive in input materials, thus meeting the demand well.
When FTAs are implemented for leather and footwear products, the tax rate is almost 0%, except for leather shoes entering the EU market, which has a roadmap but has now been reduced to about 3.5%. This is also a good opportunity for export growth.
“ Major agreements such as the Vietnam-EU Free Trade Agreement (EVFTA) or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)... have been well utilized by footwear products and achieved very high growth. It is worth mentioning that wherever the agreements are opened, footwear products immediately boost exports to that market, ” said Ms. Xuan.
Also by taking good advantage of FTAs, the leather and footwear industry will grow quite well in 2024, with an expected export value of about 27 billion USD, an increase of about 10% compared to 2023, achieving the set plan.
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| The leather and footwear industry invests in technology, improves production capacity, and reduces product costs. Photo: TT |
Talking about the market outlook for 2025, Ms. Xuan also said that, continuing the momentum of the second half of 2024, next year, orders are likely to stabilize, however, businesses need to restructure to avoid being passive in the face of new fluctuations, especially the change of government in the US, because this market accounts for nearly 40% of the industry's export proportion.
The rapid increase in logistics costs is also a major difficulty because the industry's export markets are mainly far away, such as the US and EU.
Along with that, new requirements, such as greening requirements and labor-related requirements, all require businesses to improve their compliance. Another challenge is that labor resources are increasingly scarce.
Meanwhile, export prices have barely increased, and have even been forced to decrease, and production prices from China are used as the basis for negotiations, which also creates difficulties for businesses.
Actively improve internal strength
In addition to the challenges, Ms. Xuan also pointed out the advantages of Vietnamese footwear enterprises. In particular, with high-skilled labor, Vietnam is still chosen as a prestigious production destination for brands. Many FDI enterprises investing in Vietnam also determined to continue to stick with the industry.
At the same time, domestic footwear enterprises have also proactively improved their internal strength. According to Ms. Xuan, in the past, enterprises were simply producers, materials, and technology were completely dependent on brands, but now under the pressure of rising costs, if they continue to depend, they will be eliminated from the supply chain. Therefore, to get orders, enterprises are forced to change technology and invest to create efficiency and get orders.
At the same time, the domestic material localization rate has been more positive, currently reaching about 50-55%. The industry strives to increase the localization rate to 65-70% by 2025 and to about 80-85% by 2030.
According to the leader of the Vietnam Leather, Footwear and Handbag Association, recently, the Party and Government have directed the drastic implementation of streamlining the apparatus, the most direct impact on businesses is the reduction of administrative procedures. " Reducing the number of management agencies will certainly significantly improve administrative procedures. That is a bright spot for businesses ," Ms. Xuan pointed out.
Streamlining the apparatus also requires the enterprise itself to restructure, especially in terms of personnel, to adapt and operate more effectively.
Leather and footwear are ranked in the country's tens of billions of USD export industry, along with other industries in the processing industry group, which have strongly recovered and are the main contributors to the country's overall export turnover.
At the conference to review the work of 2024 and deploy tasks for 2025 of the Industry and Trade sector, the leaders of the Ministry of Industry and Trade acknowledged that entering 2025, the market context is forecasted to have many fluctuations. To ensure stable export growth, including footwear exports, the Ministry of Industry and Trade has proposed many solutions, including continuing to monitor and promptly provide information to industry associations and businesses about developments in the export market to promptly adjust production plans accordingly, especially changes in trade policies of major markets such as the US and China.
Continue to maintain regular trade promotion conferences with the Vietnamese trade office system abroad. Direct the Vietnamese trade office system abroad to regularly update information on the foreign market situation; regulations, standards, and conditions of foreign markets that may affect Vietnam's import and export activities and make recommendations to localities, associations, and import and export enterprises.
Actively deploy diverse forms (direct and online) to introduce advantages and incentives from implemented FTAs to make good use of opportunities from the agreements.
Promote the development of logistics services, continue to carry out assigned tasks on implementing the Plan to enhance competitiveness and develop Vietnam's logistics services by 2025, gradually solving the problem of dependence on foreign shipping companies for export enterprises.
Source: https://congthuong.vn/nganh-da-giay-da-het-thoi-gia-cong-theo-kieu-cu-365955.html
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