“Last year saw leather and footwear exports surge 16% over the prior year to 15 billion US dollars,” said Ho Thi Kim Thoa, Ministry of Industry and Trade, adding: “Of which, outbound sales of footwear accounted for 12 billion US dollars, up by 16% and handbags made up a total of 2.88 billion US dollars, up by 14%.”

The Deputy Minister has also added that total value of exports for 2016 could potentially see further growth of another 15 to 20% and has advised local companies to concentrate more on “developing the domestic support industry to reduce overall cost of raw materials and thereby increase the profit margins on their sales”.

Producing raw inputs locally will also allow local companies to take full advantage of tariff reductions, with all the advantages of sourcing locally the raw materials for the industry, an opinion voiced by Mr. Thoa, who said competing foreign invested companies operating in Vietnam are relocating their supply chains from countries such as China and Japan.

The ASEAN Economic Community (AEC) and other free trade agreements (FTAs) were pointed by the authorities are the source of added stimulates for the exports in 2015. The Generalized System of Preferences (GSP), which cut tariffs on footwear exports to the EU from 13-14% to 3-4% has also contributed to an increase number of orders from EU member nations in 2015. The expectation is for this increase to continue in 2016.