Vietnam footwear demand increases

Vietnam now boasts 233 footwear producing businesses, 76 of which are state-owned enterprises, 80 others are private businesses and the remaining 77 are foreign invested. These enterprises each year produce 420 million pairs of shoes. The output of foreign invested enterprises accounts for 47.5%, while that figure for state-owned businesses is put at 27.5% and private businesses 25%. Total output of footwear has increased in the past few years. Along with this increase, the demand for consumption and export has increased sharply. Before 1991, footwear production met the domestic demand. In 1992, footwear export earned US$5 million. Export turnover of footwear has increased sharply in the past few years. The year 2001 saw an increase of 312 fold against 1992, or an average increase of 89.3% a year. This is the highest growth rate, compared with Vietnam's other major exports in the same period. The footwear industry earned US$1.256 billion in the first eight months of this year, or an increase of 20.9% (or US$217 million) over the same period last year. This was also the highest growth among Vietnam's major exports. The footwear industry's export value came third, after that of crude oil and textiles and garments. After ten years, Vietnam became the world's fourth largest footwear exporter, after China, Hong Kong and Italy. The export market for Vietnam's footwear has expanded significantly with products being exported to 129 countries and territories in 2000. Major markets include the UK (US$220 million), Germany (US$210.6 million), Belgium (US$155.4 million) and France (US$139.6 million). Export value to the EU accounted for 82% of the total turnover of Vietnam's footwear in 2001. Early this year, this accounted for 79% due to a fall in price. The US is a market of great potential. Export value to the US increased by 1.5 fold in the first four months of the year after the Vietnam-US trade agreement took effect. Total value to this market is expected to reach US$300 million this year. Footwear occupies an important position in Vietnam's socio-economic development, helping reduce the unemployment rate.