Poor Quality Chinese Products

The leather and footwear sector exceeded US$ 1 billion in bag exports last year, leading the Ministry of Industry and Trade (MoIT) to officially prompt the industry to keep developing the product.

Viet Nam earned more than $ 1.3 billion by exporting various kinds of bags in 2011, up 33 per cent against 2010, according to the Viet Nam Leather and Footwear Association (Lefaso).

Lefaso Chairman Nguyen Duc Thuan said the handbag sector had great prospects for development now that many large global companies had shifted their production from China to Viet Nam. Local demand had also increased as Vietnamese consumers moved away from cheap and poor quality Chinese products.

“The task assigned to the leather and footwear industry by MoIT would open a great opportunity for companies to take advantage of the situation, raise domestic market share and bolster exports,” Thuan said.

By predicting these trends, many companies have secured high-value orders, including the Thai Duong Garment and Bag Company in HCM City which has signed a large contract to export about 240,000 bags per month.

The company has invested more than $ 8 billion to expand its bag production lines.

Company representatives said they had received larger orders but they did not have the production capacity to fulfill them, leading clients to place orders elsewhere. However, orders were still expected to increase by 20 per cent over the previous year which should help the firm “stay healthy” despite the economic crisis.

Some footwear companies said that out-sourcing contracts for bag production were easier than footwear sub-contracts.

Thai Binh Footwear Joint Stock Co has decided to invest in bag production despite more than 20 years experience in the shoe sector. To ensure success, the firm has coordinated with Coach, a famous US leather company, to tap into the new field.

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