Foreign investment inflows in local footwear industry set for recovery (weekend)
VOV.VN - Through the participation in a number of free trade agreements (FTAs) alongside several major economies, the nation will continue to welcome the shift of export orders and production hubs by foreign corporations and enterprises.
This comes after the third phase of the Nike Shoe Factory project became one of the few foreign direct investment (FDI) projects in the footwear industry to get underway this year.
In line with the plan, following eight months of construction, the project is set to be completed by the contractor before being handed over to the investor who will officially put the site into operation.
The first and second phases of the Nike Shoe Factory were initially put into operation by Golden Victory Vietnam Co., Ltd., with the move significantly contributing to boosting the export turnover of the footwear industry.
Most notably, the local footwear and handbag sector is viewed as having the opportunity to increase exports and FDI inflows with new-generation FTAs taking effect, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU -Vietnam Free Trade Agreement (EVFTA).
Despite these positive factors, the prolonged impact of the novel coronavirus (COVID-19) epidemic has affected both production and export activities, thereby causing a range of issues for these sectors.
According to data released by the Ministry of Industry and Trade, the total footwear export turnover of all varieties during the opening 11-month period is estimated to have reached US$14.93 billion, representing an annual decline of 9.8%.
Export earnings of handbags also plummeted to US$2.780 billion during the reviewed period, a drop of US$608 million compared to last year’s corresponding period. In addition, several investment projects in the leather and footwear industries have yet to be put into operation as planned.
Capital inflows domestically to recover
At present, China, Taiwan (China), and the Republic of Korea (RoK) have all retained their leading positions in terms of pouring FDI capital into the Vietnamese leather and footwear industry.
Following the signing of several FTAs with major economies, including the EU, Japan, and the RoK, the nation is anticipated to welcome a greater shift of export orders and production bases from foreign corporations and enterprises moving forward.
The Global Connectivity Index 2020, which was recently released by the Stern Business School of New York University and DHL Company, outlines that the nation has achieved an impressive performance, ranking fifth in terms of international trade flow, while the majority of countries in the top 10 recorded a drop or simply maintained their position.
Most notably, the country has developed into a strong rival to China in terms of garment and textile production, in addition to surpassing other rivals in producing high-tech products.
According to Shoeib Reza Choudhury, general director of DHL Express Vietnam, the nation is definitely among the leadings destinations for businesses that are keen to diversify their production facilities, adding that foreign firms will continue to be attracted by the country’s young and highly skilled workforce, along with the signing of various FTAs with major economies.
Adidas Group have stated that the trend of shifting production from China to the nation will continue, with the country likely to develop into a production hub for more than half of the number of Adidas shoes globally.