VNEconomyNews.com - The export turnover of Vietnamese bag products would surge strongly by 40-50% next year thanks to the processing orders transferred from China, said Chairman Nguyen Duc Thuan of Vietnam Leather and Footwear Association (Lefaso).

Thuan recently indicated the big opportunity for local bag producers, saying the world’s famous bag brands used to focus their production in China, but they realized a must to reduce the dependence on China by 50%. These brands are shifting sub-contract production to Vietnam, India and Indonesia.

Thai Binh Group, or TBS Group, whose chairman is Thuan, used to manufacture shoes only, but in the middle of this year opened a bag production factory in Binh Duong. As soon as the factory was opened, the firm signed a contract worth US$10 million with the U.S. luxury bag maker Coach to produce products under this brand.

Earlier, another enterprise specializing in footwear processing for export to Europe said it was planning to join hands with a European partner to process bags. The reason given was that bag processing is easier than shoes processing.

Thuan underscored there are still plenty of opportunities for the local bag manufacturing industry, but the point is whether Vietnamese businesses are qualified and capable of seizing those opportunities. Producing bags for big brands required many factors, such as good governance, capital, machinery and factories.

According to Lefaso, the total export turnover of the leather and footwear industry this year would amount to US$7.5 billion. In particular, the footwear export turnover was expected to reach US$6.2 billion, or a rise of 25% against 2010, while the export turnover of bag products would be some US$1.3 billion.

Foreign invested enterprises accounted for over 50% of the total export turnover of the local leather and footwear industry, and over 70% of bag export. Currently, the majority of foreign companies operating in the Vietnam’s bag industry are South Korean ones.

Regarding the export markets of local bag products, Lefaso predicted the U.S. would record a faster growth than other markets as many U.S. customers were preparing for the era of the Trans-Pacific Partnership (TPP), when the import tax rates of Vietnamese bags to the U.S. would be lower than those made in China. TPP is still under negotiation now.

As for export orders in 2012, whilst some shoes exporters are still waiting for their partners’ confirmation, the order amount is stable with bag producers, especially exporters of fashion bags.


Source: vneconomynews.com