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Looking forward to 2022, Vietnam's leather and footwear industry is expected to get out of the woods

February 10, 2022
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According to the annual report of the Vietnam Leather, Footwear and Bags Association (Lefaso), the industrial production index of Vietnam’s leather and footwear industry in 2021 will increase by 5.2% compared with 2020, but it is still lower than the growth rate of 9.9% in 2019. In 2021, the total export value of leather and footwear will be 20.78 billion US dollars, a year-on-year increase of 4.6%. Among them, the export of footwear was 17.77 billion US dollars, a year-on-year increase of 6.1%; the export of luggage was 3.01 billion US dollars, a year-on-year decrease of 3.2%.


According to Lefaso's analysis, with the recovery of the global economy, the traditional export market has grown slightly. Specifically, North America has the most pronounced recovery (19.6%), followed by Europe (10.8%) and Oceania (8.9%). The United States is the largest export market of Vietnam's footwear industry, with an export value of US$8.765 billion, a year-on-year increase of 15.8%; China is the second largest exporter of Vietnam's footwear industry, with an export value of US$1.718 billion in 2021, a year-on-year decrease of 22.3%; followed by For Japan, the export value was 1.067 billion US dollars, a year-on-year decrease of 10.1%; the export value of South America decreased by 31% year-on-year, the most serious.


Vietnamese enterprises have overcome the difficulties caused by the epidemic and gradually got out of the trough. Large enterprises in Vietnam's leather and footwear industry are mainly concentrated in Ho Chi Minh City, Dong Nai, Binh Duong, Long An, Tien Giang and other provinces and cities, accounting for nearly 70% of the industry's output and exports. Since the fourth round of the new crown epidemic broke out in the southern provinces of Vietnam in May 2021, the Vietnamese government has required the continued implementation of various prevention and control policies, and 80% of shoe-making enterprises have been in trouble. Under the double impact of the epidemic and labor shortages, leather and shoe-making enterprises in central and northern Vietnam are barely maintaining 50-80% of their production capacity. Although a few companies are still operating, factors such as epidemic prevention and control, lack of raw materials, rising costs, nucleic acid testing, and vaccination have all had a certain impact on production. On the one hand, leather and shoe-making enterprises are faced with production stoppage, production reduction and loss of export orders. In addition, since 2020, there has been a shortage of containers, the price of international freight has increased by 5-10 times, and the prices of fuel and raw materials have remained high. Various factors have created many difficulties for export enterprises.


In October 2021, the epidemic situation in the southern provinces of Vietnam has eased, workers have returned to work one after another, and companies have expanded their recruitment. Relying on various favorable policies and trade agreements, enterprises have accelerated the resumption of work and production. Since then, the situation in the leather and footwear industry has gradually become clear.
Focusing on the global economic development trend, epidemic prevention and control situation, and the current order status of enterprises, the Vietnam Leather Shoes and Bags Association predicts that in 2022, Vietnam's leather shoes and bags industry will grow by 10-15% year-on-year, achieving a growth rate of 23-25 ??billion US dollars. export volume.


——Translated from Vietnam Economic News

 

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