Vietnam Leather and Footwear Association (LEFASO) data shows that in the first six months of 2012, Vietnam exported in excess of US$3 billion worth of footwear, an 8% year-on-year increase. Export revenue of handbags and suits alone earned US$678 million, an improvement of 11% compared with that of 2011, of which 50% went to the EU, or US$1.6 billion, up 5% compared to 2011. Exports of this product to the US earned US$806 million, accounting for 26% of total production, up 6% compared to 2011. This performance brings the sector the 3rd position among ten sectors achieving the largest revenue for the first six months of 2012. The industry was expected to reach the yearly target of US$7.3 billion in export value for the whole of 2012, up 12% compared to the same period of 2011.

 

Vietnam's leather and footwear is exported to nearly 50 nations, and the country is the 4th largest exporter in the world; major products are sport, leather and canvas shoes and sandals of a full range. Despite global economic downturn impact, the footwear sector has grown strongly over the past five years with export volume of shoes rising 163% and bags 205%. Latest data of LEFASO shows that of the sector's total exports, 48% went the EU, 28% to the US, 3% to Japan and 21% to other markets.

  

EU has been the largest leather and footwear market for Vietnam for many years, accounting for revenue of US$3.1 billion and 48% of total leather and footwear export earnings of Vietnam in 2011. Vietnam Custom's trade data documents that during the first six months of 2012, EU continued to be the largest importer of Vietnam's leather and footwear, responsible for 40% of total export earnings -US$1.3 billion, up 6.5% against 2011. Vietnam's export of this category to Slovakia increased sharply with total revenue of US$30 million, up 229% compared with the same time period of 2011, followed by Poland (up 148%), Czech Republic (up 137%), Sweden (US$26 million, up 43%), Belgium (US$204 million, up 25%), and France (US$130 million, up 10%).

 

Footwear and leather products have been emerging during the past decade as one of Vietnam's most important export sectors. The sector is estimating its annual growth at 9.4% in the 2011-2015 period, 8.8% in 2016-2020, and 8.2% in the 2021-2025 period. The use of domestic materials in production will rise to 60-65%.In the foreseeable future, the sector is expected to focus on calling for investment and implementing major projects such as investing in an additional 3,000 production lines of shoes, sandals, suitcases, handbags and wallets; and developing research centers related to fashion, production technology, and environmental-oriented technology.   

 

(Source: Insight Alpha)