Government plan could be good news for suppliers to Vietnamese shoe sector
13/07/2010
Under the plan, industrial products that make materials for five key industries, including footwear, will be able to enjoy preferential policies on investment for market development, science and technology, infrastructure and labour force training.
As for the materials that can be made domestically, including leather, the plan would see the government apply “the maximum possible tariffs” on exports in accordance with Vietnam’s commitments under bilateral and multilateral agreements so as to favour local production.
Regarding capital, enterprises that implement projects in keeping with the plan would be able to borrow up to 85% of the total fixed capital from state funds.
The secretary general of the leather and footwear association in Ho Chi Minh City, Nguyen Van Khanh, has said that locally made content of shoes constructed in Vietnam remains modest at 25%, with 75% of the materials are imported.
There is a target in place of increasing the proportion of materials from local suppliers to 40% by the end of this year and to 80% by 2020, but achieving it remains unlikely according to many industry observers, who point out that imported leather from China is often cheaper than leather from some local tanneries.
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