The leather and footwear sector has not developed its support industry despite huge export value.
According to the Vietnam Leather, Footwear and Handbag Association (Lefaso), leather and footwear exports account for nearly 10% of the country’s total export value. The sector meets 50% of domestic demand and generates more than 1 million jobs. However, most of its companies provide outsourcing services and the whole sector imports nearly 60% of raw materials.
Some businesses have invested in the support industry to produce leather, technical fabrics, plastics, adhesives and chemicals, but, they only meet around 40% of demand. Therefore, producers have to spend much money on importing materials for production.
Footwear experts suggest the building of industrial zones producing materials with standard waste water treatment systems. They also say that domestic businesses should be encouraged to connect with foreign direct investment (FDI) companies in joining chains of material supply.
The leather and footwear sector sets a target for US$20 billion export value this year, up 10% against last year.