Vietnam's leather and footwear industry is booming as more and more international fashion brands see Vietnam as an important part of the global supply chain, according to the Vietnam Leather, Shoes and Bags Association (LEFASO). Many Vietnamese tanneries and footwear businesses have enough orders to support production until the end of the year. This is in no small part due to the country's successful efforts to prevent and combat the COVID-19 pandemic. In addition, Vietnam has become a popular destination for foreign investment following the signing of a number of historic trade agreements such as the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) and the Trade Agreement. Free trade between the EU and Vietnam (EVFTA).

A recent LEFASO survey found that over 40% of international shoppers said they are placing more orders or plan to do so in the near future. Domestic firms are looking for buyers in the face of disruptions due to the pandemic and a sharp drop in demand in traditional export markets such as the EU (-27%) and the US (-21%) compared to the previous year. and to promote restructuring measures to reduce costs. As a result, the localization rate of Vietnamese leather and footwear factories improved to an average of 30-40% with key export goods including sportswear and footwear. more than 50%. Statistics from the General Directorate of Customs and the Ministry of Industry and Trade also support this view: exports rebounded sharply in September, rising 4.5% over August and only slightly declining 0.4% year on year. period. last year, despite the ongoing pandemic.

Shoe makers are also hiring more workers as production resumes at a high rate. However, not everyone has seen this rosy picture in the shoe industry. 2021 is still an unpredictable year, even for those feeling good now. Free trade agreements and preferential policies, while providing some advantages for Vietnamese goods, cannot determine the outcome of competition. Vietnam's leather and footwear industry is still grappling with many challenges, including reliance on imported raw materials and tightening labor laws. Companies need to start investing in new technology to improve their workforce and develop contingencies to be quick, responsive and adaptable to the changing business environment. Vietnam has over 1,700 leather and footwear manufacturers with a total production capacity of 1.1 billion pairs of shoes and 400 million handbags and bags per year.

Footwear exports alone were estimated at $ 12.8 billion in the first 9 months, down 8.8% from the same period last year and only half of the industry's $ 24 billion target for 2020. Wang Hung, Chairman of the Hansae Vina Co., Ltd. (a clothing manufacturer, the Korean capital) excitedly said that the fashion warehouse produced during the Covid 19 outbreak is still being emptied. ... The supplies were sold to the European and American markets to keep up with the fall-winter fashion. This is a very good signal for employees and companies to overcome the critical crisis caused by the epidemic over time. Mr. Hung not only cleaned up the production of goods, but added that most of the raw materials were imported from China, so when the epidemic hit, the production of materials was suspended. Since then, the company has turned to sources of raw materials imported from Korea and the country to replace it, so it is actively engaged in manufacturing.

According to Mr. Hung, there are many factors affecting the order and maintenance of the current good manufacturing scheme, including orders from the group's Myanmar and Indonesian factories in Vietnam. Currently, all of Hansae Vina Group's factories operate in Vietnam, employing about 20,000 people. While the epidemic has severely impacted manufacturing and business operations, the company continues to perform well. The leather and footwear industry also recorded that it flourished again from the beginning of September, workers had ample working hours, and raw materials for production were no longer a boom. In particular, raw materials are no longer damaged as during the COVID-19 incident. The company even recruited additional staff to restore production. At the same time, the source of raw materials is also expanding to a number of countries where the company can actively produce.