VN's footwear sector expands footprint in Thai market

Economy March 08, 2014 00:00

By Viet Nam News
Asia News Netwo

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Local manufacturers reel from shortage of labour, unstable baht

The value of Vietnam’s footwear exports to Thailand has increased sharply in the past four years, jumping from US$6.6 million in 2010 to $25.87 million (Bt835 million) in 2013.
According to the general department of Vietnam customs, this January Vietnam shipped $2.01 million worth of footwear to Thailand, and since 2012, the country’s monthly footwear export value to Thailand has been above $1 million on average.
Thailand has become one of Vietnam’s four largest footwear importers in Asean, the department said.
Nguyen Van Khanh, chairman of the Leather and Footwear Association in District 4, Ho Chi Minh City, said Vietnam would have opportunities to ink more contracts with Thailand in the labour-intensive sector, as the partner country would stop producing its own footwear some time in the future, reports VnEconomy.
Apart from a shortage of labour, Thailand is facing challenges posed by the unstable baht, the high labour cost and fierce competition from other producers, Khanh said.
He added that many small and medium-sized footwear producers in Thailand had to suspend operations and export materials to foreign countries, including Vietnam. Currently, several Thai businesses are seeking to bring their production lines to other markets with cheaper labour costs, experts have said, noting that this could be an opportunity for the Vietnamese footwear industry.
Several months ago, a delegation of 30 Thai businesses operating in the sector visited Vietnam to seek long-term investment opportunities.
Kanchit Juntanapornchai, chairman of the Association of Thai Footwear Industrial Promotion, said a number of Thai businesses wished to import Vietnamese footwear to service their domestic and export demands.
He suggested that Vietnam should take advantage of the uncertainty in the sector in other countries by improving the quality of its own services and products.
Diep Thanh Kiet, vice chairman of the Vietnam Leather and Footwear Association, said Thailand boasted a strong footwear industry as the country not only sells products of well-known brands and importers worldwide, but also establishes distribution networks in foreign countries.