The Vietnam Footwear Industry (2004 – 2007) VIETNAM LEATHER AND FOOTWEAR ASSOCIAITON LEFASO Vietnam Leather and Footwear Association Head Office: 160 Hoang Hoa Tham. Tay Ho District, Ha Noi, Vietnam Tel +844 7281562 - Fax +844 7281561. E-mail: hhdg@hn.vnn.vn Southern Office: No.5A, Xuyen A Highway, An Binh Town, Di An District, Binh Duong Province, Vietnam. Tel +848 7241499 - Fax +848 7241500. E-Mail: hienptm@thaibinhshoes.com.vn Total enterprises: over 500 companies operating in the sector. Labour force: Over 600.000 people Footwear Industry in Vietnam • The footwear industry is the third The North 91 Factories •70 km from Hai Phong Port •140 km from Noi Bai Airport •70 km from Cat Bi Airport 10 Factories biggest contributor to Vietnam’s GDP and export turnover. • The industry locates in all North, Centre and South Vietnam, employs approximately half a million people and another one million people work in its supportive-industries. • The largest part of the industry is in the South of Vietnam (HCM. Binh Duong, and Dong Nai province). The South •10 km from Saigon port • In the North of Vietnam has cheaper labors and it may hold 25-30% of capacity of the whole industry in future. •12 km from Tan Son Nhat Airport •12 km from HCM City 400 Factories Enterprises by economic sector Footwear, Handbag companies Total Tanneries Total Rate (%) 459 43 502 100.0 State-owned companies 01 - 01 0.2 Private local companies 239 34 273 54.3 14 0 14 2.7 206 9 215 42.8 Joint Venture companies Foreign owned companies Production Capacity Product Unit 2005 2006 2007 Footwear 1000 prs 499,000 627,507 715,000 - Sport shoes 1000 prs 288,155 401,732 457,300 - Canvas shoes 1000 prs 44,370 50,714 58,830 - Lady fashion shoes 1000 prs 94,590 91,677 104,550 - Others 1000 prs 71,885 83,384 95,320 Handbags 1000 pcs 51,700 70,000 70,000 Finished Leathers 1000 sqf 47,000 80,000 87,000 Export Products Industry exports over 90% of its total annual production. Various kinds of products including: sport shoes, lady shoes, canvas shoes, sandals and slippers boots, hiking shoes…. Sport shoes contribute 50 - 55% of the total capacity and export turnover of the industry. Huge foreign - owned companies specialize in sport shoes and leather shoes for world - famous brands (Nike, Adidas, Reebok, Timberland, Clarks, Puma…). Medium and small size companies have large product range. Most of export shoes are OEM products. Difference kinds of Sport shoes as under: Export value (2004 – 2007) 2004 Leather & Footwear Industry 2005 2006 2007 2,640.26 3,039.58 3,591.56 3,994.00 Country 26,503.00 32,000.00 39,605.00 48,380.00 % Ratio 10.00% 9.50% 9.07% 8.3% Unit: Million US Dollars Export value by main markets (2004 - 2007) 2004 Main Market Value 2005 % 2006 2007 Value % Value % Value % 1,966. 5 54.7 2,176. 8 54.5 EU From this ITALY 1,794. 68.0 6 (7.4) 1,789.3 58.9 162.1 (9.0) America 134.3 423.1 16.0 611.1 20.1 193.0 802.8 22.4 216.9 885.1 22.2 Japan Other countries Total (9.8) (9.9) 73.0 2.8 93.7 3.1 113.1 3.2 114.7 2.9 348.5 13.2 545.5 17.9 709.1 19.7 817.5 20.4 2,639. 100. 2 0 3,039.6 100. 0 3,591. 100.0 6 3,994. 100.0 2 Export markets by value 2007 20.4% Europe 2.9% America Japan Others 22.2% 54.5% Dealing with the EU anti-dumping measures, the industry is trying to increase export to US market. Top 20 import countries 2007 No. Countries Ex Value (USD) 1 United States 885,116,016.3 2 United Kingdom 526,433,882.4 3 Germany 357,937,682.6 4 Netherlands 279,196,457.6 5 Belgium 278,944,193.4 6 Italy 216,898,018.1 7 France 200,948,001.8 8 Mexico 136,957,878.3 9 Spain 128,012.906.1 10 Japan 114,750,420.3 Top 20 import countries 2007 No. Countries Ex Value (USD) 11 Canada 78,680,931.2 12 China 66,021,899.7 13 Sweden 54,500,559.8 14 Panama 54,253,416.5 15 Hong Kong 50,529,242.3 16 Korea (Republic) 50,514,340.8 17 Austria 48,894,812.2 18 Australia 39,576,716.4 19 South Africa 37,847,689.4 20 Taiwan 36,719,869.4 Top 20 import countries 2007 Value: Million USD 900 800 700 600 500 400 300 200 100 0 ni a a n ric iw A f T a th a o u li S tr a us a A tr i us A ea ng o or K K g on a H am an n P de e w S na hi a C ad an C an p J a in pa o S x ic e M ce an Fr ly m I ta g i u n d e l la B her y om et n gd N m a in s er K e G te d ta t ni S U te d U Top 20 export footwear companies No. Name Tel Fax 1 Pou Yuen VN Holding Co. Ltd. +848 8760213 +848 8751611 2 Taekwang Vina Ind. Co. Ltd. +8461 836421 +8461 836435 3 Pou Chen VN Joint Stock Co. +8461 828010 +8461 821201 4 Freetrend Ind. Co. Ltd. +848 8975025 +848 8975024 5 Golden Star Co. Ltd. +8431 763880 +8431 763887 6 Chang Shin VN Co. Ltd. +8461 865204 +8461 865145 7 Sam Yang VN Co. Ltd. +848 7956852 +848 7956838 8 Hwa Seung Vina Co. Ltd. +8461 549743 +8461 549804 9 Dona Pacific VN Co. Ltd. 10 King Maker VN Co. Ltd. +8461 882797 +84650 782248 +84650 757235 Top 20 export footwear companies (cont) No Name Tel Fax 11 Chi Hung Joint Venture Co. +84650 625022 +84650 658241 12 Hai Phong footwear Co. +8431 940914 +8431 940716 13 Dong Nai Viet Vinh Shoes Co. +8461 882791 +8461 884745 14 Hoang Gia Cat Tuong Co., Ltd. +84650 824115 +84650 823966 15 Hue Phong Shoes Co., Ltd. +848 8959739 +848 8958533 16 Khai Hoan Shoe Making Co. Ltd. +848 8754428 +848 8753928 17 VietNam Right Rich Co., Ltd. 18 Lac Ty Joint Venture Co., Ltd. +848 8750410 +848 8754204 19 Phu Lam Footwear JV Co. +848 8750098 +848 8754299 20 Thai Binh Holding & Shoes Co. +848 7241241 +848 8960223 Import Machinery and Raw materials in 2007 Unit: Million USD No Contents 1. Machinery and spare parts 2. Finishing Leather Totals From ITALY 68.88 7.06 932.03 53.19 Labor force used by the industry (2004 – 2007) Unit: Person 2004 Total 500,000 2005 540,000 2006 560,000 2007 601,000 Note: The mention data not including labor force operating in the small workshops and family production Opportunities and challenges Challenges Opportunities ¾ ¾ ¾ ¾ ¾ ¾ Affirm quality and prestige in international footwear markets. Business with brand name clients. Increasing demand of North American markets. Sufficient, still have advantage in cheap & skilled labor. Good security, stable economy & politics in the country. Adequate supportive industries for development. ¾ ¾ ¾ ¾ ¾ ¾ Competition from other Asian countries. Training system weakness for footwear industry, especially in R & D sector. EU anti-dumping & GSP. Dependence on Partners and difference markets. Weakness in forecast & update information about the markets. Dependence on foreign countries for high quality materials. Main objectives to the year of 2015 Speed up resources for the design and marketing areas. To develop relating industries such as: footwear material production, to increase the ratio of domestic materials. Increase value added to products Calling and encourage investment in high quality leather products (Fashion leather shoes & goods), Trade promotion for new markets and maintaining the annual growth of 10 - 15%. Creating more jobs and improving the quality of life for the labors operating in the industry. Trade cooperation between Vietnam and Italy (Leather & Footwear Sector) ¾ ¾ ¾ ¾ Vietnam export to Italy footwear (mainly sport footwear), achieved 216,9 USD in 2007 Import Leather, Machinery and spare parts (In 2007 achieved 60.25 USD) To acquire know – how transfers (from Italy) for tanning and footwear productions Exchange information, training technicians and designing staffs and so on… Projects calling investment ¾ ¾ ¾ Setting up Technical, Training and Service Center for tanning, footwear and leather goods products Projects focus on fashion leather shoes and leather goods with high quality Projects focus on improve quality of finishing leather, applying clean technology and reduce polutions for tanning process Projects calling investment ¾ ¾ ¾ Projects relating supplying and production of footwear & leathergood component and accessories Project on recycle hard wastes and water treatment system for tannery enterprises…. Other projects for sustainable development of the industry Samples for sustainable development of the industry Footwear factories Material factories Footwear Product Development Center CAD/CAM & Rapid Prototype (RP) have made great changes Footwear Product Development Center Sample stitching line Sample materials Design section with 3D-CAD patterning unit Sample lasting line Laboratory for testing of materials and products Outsole production Rubber batching & mixing Outsole press Rubber sheeting Outsole trimming Out sole production Outsole buffing Stockfiting lines EVA-Phylon production EVA pressing MC EVA skiving MC EVA-Phylon production Phylon Injection Line (PVN) Material production Footwear production Warehouse Health & Safety Automat Fire Alarm Fire system Hydrant system CSR-Health & Safety Canteen CSR-Health & Safety MSDS - Machine safety First Aid First Aid site No PPE no working site Professional Training No PPE no working site Schools for local community Thank you! VIETNAM FOOTWEAR AND LEATHER ASSOCIATION
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