HCM City Footwear: A Firm Foothold

HCM City Footwear: A Firm Foothold

Footwear is a major and quota-free export good. In the first six months of 2004 the industry saw an export growth rate of 10 per cent. The industry enjoys favourable conditions and high development as one of the top exports of Vietnam.

Favourable growth

In Ho Chi Minh City, the footwear industry has experienced impressive development as it combines a traditional craft with modern techniques and technologies, producing high quality products, acknowledged in the world market. In the first six months of 2003, the export volume of footwear makers in Ho Chi Minh City (about 100 enterprises in the Ho Chi Minh City Footwear Association) gained a growth rate of between 10 and 20 per cent. The Gia Dinh Footwear Company in particular exported its first products to the US, which are now available in supermarkets in the US.

The high growth rate resulted from investment in technology, which increased the quality of products, as well as efforts to seek and develop markets. The Viet A Chau Company makes high quality soles, which have been accepted in regional countries and have been supplied to makers in Ho Chi Minh City. This is the first and most important step in developing the footwear industry. The trademarks of Giay Viet and T&T have become famous among fashionable footwear makers. Some of these labels have gained access to the fashion industry worldwide and have been accepted in Italy, the homeland of the shoe making industry. Biti's and Bita's are thriving in the production of sports shoes. Other companies, such as An Lac (ALSIMEX), SAGODA, SASHOCO, Lien Dat and Hiep Hung, employ hundreds of workers and have gained a high export growth rate.

Over the past years, many companies have gradually built up their trademarks and have been acknowledged as a high quality Vietnamese good. Despite being still fairly unknown in international markets, the shoe making companies in Ho Chi Minh City will have great opportunities to expand their trademarks in foreign markets following their solid efforts to promote themselves in the domestic market.

Vu Cham, chairman of the Ho Chi Minh City Footwear Association, said that Vietnam ranked fourth among the top footwear exporting countries mainly thanks to foreign-invested companies. The association is establishing a promotion centre, which will serve as a bridge linking enterprises within the association with foreign investors and customers, thus helping boost investment and trade ties facilitating local footwear makers to increase their competitiveness and turnover. The centre is expected to open this July.

Pulling together

Ho Chi Minh City has more than 1,000 age-old shoe making establishments with skilful artisans. However, this potential has yet to be fully tapped. Few artisans have adequate capital for investing in large-scale production. They all face difficulties in finding suitable places for their productions and consequently the majority of establishments are located in residential areas, leading to unavoidable environmental pollution. Therefore, those who have devoted their hearts and souls to their trade have initiated a project to build a craft village.

Vu Cham said that the initiative would take advantage of traditional crafts and meet the demand for upgrading the material base of shoe making establishments. The village will become home to hundreds of households involved in shoes making. The city's authorities have agreed to provide support for shoe making establishments in the village with preferential land rent, so that each of them will have at least 100 square metres for their daily life and production activities. The village will also have a vocational training school with the participation of artisans, who will transfer their experience and techniques to the trainees. This business model will create a new driving force behind the industry as well as creating a tourist attraction.

The project to build a craft village has been approved by the People's Committee of Ho Chi Minh City. The local footwear association is now working with the People's Committee of Binh Chanh district to identify a suitable location and area for the village in the Lang Le agricultural area. In the short term, a vocational training school will be built to supply more skilled workers for the shoe making establishments. Nguyen Van Khanh, office manager of the Ho Chi Minh City Footwear Association, said that the association had developed plans to cooperate with the Phu Van rehabilitation centre to create jobs for about 20,000 people. The city will provide subsidies for about 630 hectares of production land and workshops, while enterprises will invest in machinery and equipment as well as worker training.

• Yen Nhung