According to Vietnam’s “People’s Daily” report on June 23, after getting rid of the shortage of raw materials and lack of orders caused by the first wave of the new coronavirus epidemic, when world demand increased, manufacturing Shoe companies are confident in carrying out production while ensuring epidemic prevention safety.
Many corporate orders have been scheduled to the third quarter
Once in In the early days of the COVID-19 outbreak, partners faced many difficulties due to shortages of raw materials and continuous cancellation of orders. Chen Wenze, manager of Junyue Shoe Manufacturing Co., Ltd., said that in 2020, sometimes the company’s customers canceled all export orders.
However, in the face of the difficulties of the first wave of the new coronavirus epidemic, Junyue Shoe Manufacturing Co., Ltd. has taken the initiative to diversify its customer base to respond promptly when orders are cancelled. make up. At the same time, we also negotiate prices with partners to help sell products and tide over difficulties together. Domestically, Junyue Company not only arranges production flexibly to ensure safe distances amid the re-emergence of the COVID-19 epidemic, but also does management work well to optimize costs. The above measures have helped Junyue Company steadily survive the three waves of the new crown epidemic. “In 2021, partner demand will increase significantly, especially in markets that have signed a free trade agreement with Vietnam, which will help Junyue Company to have sufficient orders,” Mr. Chen Wenze shared.
Junyue Shoe Manufacturing Co., Ltd. is one of the companies that has seized the opportunity to promote the export of footwear in recent times. Representatives of the Ministry of Industry and Trade said that overcoming the difficulties caused by the new crown epidemic, footwear exports in the first five months of 2021 increased by 26.4% compared with the first five months of 2020. The footwear export market released positive signals year-on-year. Several major export markets in Vietnam are gradually recovering, and companies are seizing the opportunities brought by the various free trade agreements signed and effective to inject impetus into the export of leather footwear.
In particular, the United States, the European Union, Japan, South Korea and other markets have released positive signals, and many companies have placed export orders into the third quarter. As the gradual lifting of blockade orders prompts economic recovery, consumer demand for clothing and footwear in the United States and Europe has surged, helping the production index of footwear and related products to grow by 12% in the first five months of 2021.
It is worth noting that from the entry into force of the Vietnam-EU Free Trade Agreement (August 1, 2020) to June 4, 2021, it is entrusted to issue Agencies and organizations with Certificate of Origin (C/O) in the form of European No. 1 Mobile Certificate (EUR.1) have issued 180,551 sets of Certificates of Origin in the form of European No. 1 Mobile Certificate, exporting US$6.6 billion to 27 EU countries. Among them, according to the “Vietnam-EU Free Trade Agreement”, the export rate of footwear to the EU market using the European No. 1 mobility certificate form reached 98%.
Chen Qinghai, deputy director of the Import and Export Bureau of the Ministry of Industry and Trade, commented that if the new crown epidemic breaks out in the early stage, the textile, clothing and footwear industries will face a shortage of raw materials and lack of orders. Despite all the difficulties, most companies have so far been able to adapt and sign many orders. Although we cannot return to the golden period, this is enough to show that companies have adapted to market changes, adopted measures to respond to the epidemic, and effectively maintained production and operations.
Solving raw material issues
Vietnamese leather, footwear and handbags Association (Lefaso) Vice Chairman Phua Thi Thanh said that the growth rate of the leather footwear industry is impressive due to taking advantage of the tax incentives in the Vietnam-EU Free Trade Agreement and meeting the rules of origin in the agreement. At present, the rules of origin for footwear products in the Vietnam-EU Free Trade Agreement are relatively flexible and allow the import of raw materials from outside for production.
However, due to the recent impact of the new crown epidemic, the disruption of the global supply chain has been a wake-up call for the domestic leather footwear production industry, because the industry mainly relies on imported raw materials. Therefore, in order to achieve sustainable development and maximize the use of tariff preferences and the opportunities brought by the Vietnam-EU Free Trade Agreement, leather footwear companies must focus on the balanced development of domestic raw materials to serve future production and exports.
According to the Policy and Strategy Research Institute of the Ministry of Industry and Trade, only 17 of the current 3,000 leather footwear companies carry out design activities, and 400 produce or process accessories and ingredients. enterprise. At present, the shoemaking industry only focuses on mid-range and mid-range high-end raw and auxiliary materials, and the rest still have to be imported, making the added value of the product low. Therefore, if we want to develop rapidly, we must focus on developing the domestic raw materials and auxiliary materials industry.
In fact, Vietnam currently mainly imports leather footwear raw and auxiliary materials from China (60%); followed by imports from South Korea and Taiwan, China. In recent years, as companies gradually shift their raw and auxiliary material production and supply chains to Vietnam, raw materials have shifted towards independent production. However, it is mainly large enterprises that achieve independence in raw materials, while small and medium-sized enterprises cannot achieve independence in raw materials and auxiliary materials due to limited resources.
The various free trade agreements signed by Vietnam that enjoy preferential tariffs are attracting many foreign investors planning to open raw material and auxiliary material factories in Vietnam, most of which are from China. investors. But this is not a sufficient condition and is only a necessary condition to attract foreign investors to invest in the upstream link. The sufficient condition is that the country must be fully prepared, formulate a development plan for raw materials and auxiliary materials, and formulate preferential policies on tariffs and land. In particular, various places must be prepared andOpening a more open door for investors,” said Ms. Pan Shichun.
Currently, the production of raw materials in the leather footwear industry still faces difficulties in environmental protection processing, especially for solids. waste and industrial waste. In addition, the industry also attracts a large number of workers and causes many social problems. Therefore, management work is the most important, and consensus must be reached from the central to local governments to promote the construction and development of the upstream leather footwear industry.
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