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Ever self-employed leather shoes material?
19
Aug
Aug
There is no shortage of markets, no shortage of orders, but more and more leather and footwear enterprises are forced to cut capacity or even close.
The Vinh Leather Joint Stock Company – Nghe An has stopped producing leather shoes since the beginning of last year due to the inability to finance the construction of the wastewater treatment system. Mr. Dao Thanh Son – Director of Da Vinh Joint Stock Company, said: “Now, all machinery has been sold, the factory has been renovated for commercial purposes”. That is just one example, and then there will be another enterprise following in the footsteps if nothing changes.
Struggling to find investment points
The Vietnamese leather and footwear industry lacks major projects for leather production and dyeing. But since 2008 until now, there has been no new investment, most localities “refuse” projects in the field of tanning, because of concerns about environmental pollution. Currently, only Tien Giang province calls for investment in the tanning industry, but only priority is given to tanning crocodile.
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After two years of surveying and finding the location of the factoryt leather in many provinces and cities nationwide, Mr. Bui Van Duc, Chairman of the Board of Directors, Sagoda Footwear Joint Stock Company, said: “Long An agreed but the price is very high, 70-85 USD / m2 for 47 years. “. To meet the raw material needs of enterprises, Sagoda needs over 4ha of land plus an investment in wastewater treatment technology of about 5 million USD. Mr. Duc said: “Can not do immediately because the investment rate is too large for the capacity”.
The total output of raw leather to meet the needs of production and export, the Vietnam Leather and Footwear Association is estimated at 220-250 thousand tons / year. However, domestic leather production can only meet 30%, the rest must be imported from Korea, Italy, Thailand … Raw material leather imported from China is not much, only about 7% for domestic production. . But with the increase in turnover of the footwear and leather goods manufacturing industry at an average rate of 10 – 15% per year, Ms. Phan Thi Thanh Xuan, General Secretary of the Vietnam Leather and Footwear Association, worried: “The capacity to meet The export demand will continue to decrease, if there is no new investment or production expansion in the leather sector ”.
Household export
Vietnam imports more and more leather and footwear materials, this trend is more pronounced since our integration has been deeper and exported more. In 2013, the export turnover of footwear of all kinds reached 8.3 billion USD, of which, imported 827 million USD, up 49% compared to 2012.
Economist Pham Chi Lan, said that this import comes with the added value of domestic production, so it cannot confirm Vietnam’s capacity, that is, how far you can do it, and sell to the market there. Thus, Vietnam will be “deeply dependent” by its weak position in the world market, while the trade and production structure is slowly changing, lagging behind other countries. Part of the error here is that the enterprise refuses to change, is still satisfied with the processing status.
Vietnam will join free trade areas, the average tax reduction from 15-17% to 0% is really an opportunity for the leather and footwear industry to promote exports, with better competitiveness. Of course, along with the incentives, the FTA trade agreements encourage the development of intra-regional production and supply chains, avoiding benefits to non-member countries.
Therefore, raw materials must be produced in a member country or imported from countries in the free trade area. Catching this trend, a number of footwear companies from Italy, Spain, Taiwan, China … have come to Vietnam to seek investment opportunities. In addition, the policies of major brands such as Nike, adidas … recently changed the policy of localization, instead of importing raw materials for production as before.
Thus, Vietnam has no other way but to develop domestic raw materials and accessories, actively change the current supply chain for export production. However, looking at the current reality, the leather and footwear industry is standing at a crossroads. The problems of the leather and footwear industry are set out from the 2000-2010 master plan, with a vision to 2015, but so far have not been resolved. For example, Vietnam has not yet had a master plan for the development of the leather industry associated with large husbandry, with a policy of establishing two common industrial zones in the South and the North, specializing in manufacturing leather and footwear materials, with factories. wastewater treatment… has not been implemented either.
Currently, there are 35 tanning companies nationwide. The top state-owned tanning establishments closed or equitized due to poor management, marketing and investment, with only two remaining firms operating. Private enterprises account for 62% of tannery factories, but due to their small scale they account for only a small portion of the total tannery production in Vietnam.
Advantage in favor of FDI enterprises of Korea, Taiwan and China. These enterprises imported processed leather instead of raw leather for production, thus causing less pollution. In addition, these FDI enterprises build tanning factories in Binh Duong, Ba Ria – Vung Tau, and Dong Nai, where large footwear factories are located in Vietnam.
