Leather and footwear enterprises recently negotiated a large number of production and export contracts, reflecting a certain recovery from the Covid-19 slump.
Positive market signals
Many leather and footwear companies are reporting optimistic signals in domestic and foreign markets over the past month, the result of Vietnam’s effective pandemic control and an uptick in trade with some EU countries and Japan.
The Vietnam Leather, Footwear and Handbag Association (LEFASO) said the EU-Vietnam Free Trade Agreement (EVFTA) that took effect in early August would not only zero duties, it has other provisions relatively favorable for Vietnamese enterprises. These include the Regional Value Content (RVC) regulations, which allow use of raw materials from EU countries and countries with which the EU has signed a free trade agreement (FTA), including the Republic of Korea (RoK) and Japan.
Nguyen Chi Trung, Chairman of the Gia Dinh Group Joint Stock Company, said his company has negotiated orders, many of which are expected to be signed by the end of the third quarter or early in the fourth quarter of 2020, and the company has prepared for resuming production. Tran Ngoc Anh, Director of the An Thinh Footwear Co., Ltd., said the company began receiving some orders from the EU market, a positive result of the EVFTA, he said.
In the context of the pandemic’s second wave in Da Nang and other provinces, businesses have been promoting online trade with foreign partners, looking for more orders in the affordable market segment, and developing additional products for the domestic market.
Enterprises want the government to reduce land lease rates and the corporate income tax, and help them access bailout packages so they make their payrolls.
Source Vietnam Economic News