LEFASO blames global economic downturn for poor figures

21 Jul '09

2 min read

Vietnam's footwear export turnover in the first half of the year was down by nearly 9 per cent compared to the same period in 2008, reaching more than US$2 billion.

The downturn has been ongoing since the beginning of the year. In June, the export turnover was just $420 million and $374.5 million in May, down 17.86 per cent over the same period last year.

The global economic downturn was blamed by the Vietnam Leather and Footwear Association (Lefaso) for the poor figures.

Traditional export markets for Vietnamese footwear, such as the US, the EU and Southeast Asia have declined, the association said.

Making matters worse, the export price of footwear products fell by between 10 and 12 per cent.

"Traditional markets have been negotiating lower export prices," said Tran Dinh Quan, head of the Import-Export Department under the Ngoc Ha Footwear Join Stock Company.

Importers were also turning to new markets, said Quan, adding that footwear export turnover in India and Tunisia had actually increased.

Quan said that since the beginning of the year, the EU had reduced its imports from Vietnam.

"We have started to find new markets in Malaysia and the Middle East, but demand is not big," Quan said.

Industry experts are predicting that demand in the second half of this year will continue to fall.

"Companies that receive orders will be the largest," said Nguyen Thi Tong, secretary of Lefaso.

Quan also believes that things would get worse before they get better as his company has only received orders for this month - as was the case with Binh Duong Limited Company, which only exported to England.

"Importers just want to sign short-term contracts. Many of our workers have been laid off," said Dao Huy Tao, the company's deputy director.

Even if new markets were found, it would not make up for the downturn, Tong said.

Last year, export turnover in the footwear sector was $4.5 billion.

Vietnam Leather & Footwear Association

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