Workers at a Ha Tay Chemical Weave Co.Ltd in Hanoi. (Photo: VNA) DangVan Ngoc, Director of Tan Phat Leather Shoes and Wallets Company Limited, said sincethe start of the COVID-19 pandemic, especially during the outbreak in Europe,customers in this market cancelled 80 percent of orders.
“Theremaining customers ask for late payments or discounts, causing challengesfor the company,” he said, adding that it maintained production in spiteof suffering losses for a long time.
“Butnow, we have reconnected with our customers and reached agreements to sharedifficulties and profits in the context of the pandemic. Thus, we havesufficient orders to keep us busy for the remainder of the year,” Ngoc wasquoted by Sai Gon Giai Phong (Liberated Sai Gon) newspaper as saying.
Accordingto Nguyen Duc Thuan, Chairman of the Vietnam Leather, Footwear and HandbagAssociation (Lefaso), the number of orders that domestic companies have received are on therise.
Thisis an opportunity for businesses to restore production and reconnect the supplychains, he said.
Thuanalso said that production and trading activities of all enterprises in the industryhave not fully recovered, but in general, many firms have overcomedifficulties and taken advantage of market opportunities.
Hecited Vinh Yen Shoes Joint Stock Company as an example.
Despitesuffering low consumption triggered by COVID-19 as people in European nations and the US ten♋d to reduce shopping while many supermarkets are closedto prevent the epidemic, the company has achieved positive achievements thanksto the adoption of flexible measures.
Itsturnover reached 320 billion VND (13.9 million USD) last year with two millionpair of shoes. The figure is expected to rise to 380 billion VND (16.5 millionUSD) this year.
Statistics from the General Department of Vietnam Customs showed the country's export turnoverof footwear in the first five months of this year grew 25.5 percentyear-on-year to nearly 8.4 billion USD, accounting for 6.4 percent of the country’stotal export earnings of goods.
TheUS remained the biggest importer with an export value of 3.35 billion USD, followed by the EU and Chinawith 1.92 billion USD and 830.9 million USD, respectively.
TheMinistry of Industry and Trade (MoIT) attributed the impressive growth of thefootwear industry to the fact that it has taken advantage of tax incentives offered by the European Union - Vietnam Free Trade Agreement (EVFTA).
Figuresfrom the ministry revealed that in the first quarter of this year, the ratio offootwear products receiving certificates of origin for export to the EUreached nearly 99 percent.
Itwas necessary for footwear companies to focus on exploiting domestic materials for sustainable development and make full use of tax incentives as well asopportunities brought about by the EVFTA, according to the MoIT.
Infact, 60 percent of raw materials for the industry comes from mainland China,followed by the Republic of Korea and Taiwan (China).
In recent years, some big enterprises have striven to secure their own material supplies butsmall-sized businesses failed to do so due to limited resources.
Thuan said footwear companies want to rece🅺ive financialsupport policies to develop supporting industries. Atax reduction for enterprises investing i🙈n supporting industries would help them manufacture products that are more competitive than those imported from Chinaand other countries, he said./.
