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Chances for Vietnam’s leather industry abundant in 2018

According to the Vietnam Leather, Footwear and Handbag Association (Lefaso), the country’s leather industry is enjoying good chances to benefit from the shift of orders from China as a result of the tendency of moving to the production of high-tech goods.

Industry sources also said the signing of a number of trade agreements like the Vietnam – EU Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is ushering in chances of development for Vietnam, especially in attracting investment and boosting export to the markets in the EU and CPTPP members.

Lefaso president Nguyen Duc Thuan affirmed that export activities of Vietnam’s leather industry are seeing a stable growth with positive signs for the second half of this year and the years to come. The forecast for the world economy in 2018 is rosy, that is why the demand in Vietnam’s major export markets like the US, the EU, China, Japan and the Republic of Korea will be better than that in 2017.

China is believed to continue the policy of reducing investment incentives in the industries of garment and leather to focus on high-tech ones, and orders for footwear and handbags is expected to keep moving from China to Vietnam in anticipation of chances created by those FTAs. However, Vietnam’s leather industry is now facing numerous difficulties like rising labor costs and low productivity compared to other countries in the region. Especially, the Fourth Industrial Revolution will also cause impact on the enterprises in the industry as they will head to investing in modern machinery and reducing work hands.

The leather industry’s production is planned to turn out about 279 million pairs of footwear in this year, with 72 million pairs in the third quarter and 80 million pairs in the last.

The first half of this year continued to witness a growth in the production by the industry, with 127.4 million pairs produced, an increase of 5.1% year-on-year. They brought back 9.45 billion USD to the country, rising by 8.4% compared to the same period last year. The export revenue of this kind of product is forecast to reach 19.5 billion USD, or 10% higher than the figure recorded in 2017.