Custom’s policy begins to pay off

5 June 2008

According to figures presented by the China Leather Industry Association (CLIA), the Chinese leather industry is already reeling from the elimination of all tax rebates on the export of finished leather from July 1, 2007, and the rising cost of raw materials. The output of finished leather rose 9% to 680 million sq m in 2007. Exports of wet-blue fell 54% to $55 million, while finished leather exports dropped 32% to $1.1billion. In contrast, imports of wet-blue achieved a record US$1.3 billion, up 32% while finished leather was down 0.4% on 2006 to $3.1 billion.

The CLIA also said that in 2007, the shoemaking industry in the Jinjiang area had many difficulties caused by a lack of skilled workers and environmental restraints. This caused a number of companies to begin transferring their processing and manufacturing base to overseas locations. The article said that Gouhui Group and Fengan Group, some of the largest in the area, set up factories in Vietnam. Quanzhou Baofeng Shoes also plan to set up overseas plants in Indonesia.
The CLIA noted that Vietnam is a rapid growth country in the footwear industry and also draws attention to Jinjang entrepreneurs. A few years ago Guohui Company began to invest in Vietnam; now four shoemaking production lines are in operation for sports shoes. Cheap labour and local preferential policies are the main advantages for shoe-making enterprises settling in Vietnam.
 The CLIA noted that Vietnam has vast potential as a market of leather and shoe accessories but its industries are relatively backward. With the rapid growth of the Vietnam shoemaking industry, the demand for footwear accessories increased sharply and that provides an opportunity and prospective market for suppliers.
Additionally, Indonesia and other south east Asian countries are restoring their footwear industry. The CLIA estimates that Vietnam now has about 350 shoe factories and a production capacity of 1.1 billion pairs of shoes. The Indonesian Ministry of Industry said that in 2006, the country’s footwear export value was almost $1.8 billion, compared to $1.4 billion in 2005.

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