Page 46 - Ebook HTKH 2024

apparel focused on exports. They will be significant competitors due to their “greening”
of products and lower labor costs compared to Vietnam.

According to the “Textile, Footwear Industry Development Strategy to 2030,
Vision to 2035,” export turnover is expected to grow by 5-6% annually until 2030 (with
2030 estimates at $68-70 billion); and by 2-3% annually from 2031 to 2045 (with 2045
estimates at $95-100 billion). The green transition is a goal that the textile industry has
set for the past five years. Currently, the green development program in the textile sector
accounts for over 50%; the 2023 target is to achieve over 70%.
The rapid growth phase of Vietnam’s textile industry has passed. From 2030 to
2045, the focus must shift to efficient, sustainable development following a circular

economy model. Enhancing the domestic value chain and participating in high-value
positions in the global supply chain, with regional and global brands, is crucial.
However, the heavy dependence on imported raw materials (cotton, fibers, fabric,
accessories) and the lack of spatial planning for dyeing and wastewater treatment are
significant challenges. High costs and lack of enthusiasm from local authorities for
licensing dyeing and weaving projects add to the challenges. Moreover, the primary

export markets demand accelerated “greening” of production and products.
Thirdly, the footwear industry: Vietnam currently ranks second in the world for
footwear exports, accounting for 10% of the total global export volume and is present
in over 150 countries and territories.
From 2020 to 2023, the average export turnover for footwear met more than 10%
of the global total import value, with footwear exports accounting for approximately 6%
of the country’s total export turnover. Despite being a major export item, the high export

value of the industry is primarily driven by FDI enterprises, with domestic enterprises
contributing only about 20-25%. The trade surplus in footwear is not large, as the
proportion of raw materials used in manufacturing footwear is high. According to the
Ministry of Industry and Trade, the proportion of raw materials accounts for 68-75%
of the total cost, while the localization rate in Vietnam is only around 40-45%. This
shows that footwear production in Vietnam still heavily relies on external sources, with

domestic enterprises lacking sufficient capability to produce raw materials, especially
high-quality materials, with only 20 domestic companies capable of supplying them.
This creates significant challenges in managing production to meet export requirements.
According to the Ministry of Industry and Trade, Vietnam imports an average of
$300 million in raw materials each year, focusing primarily on medium-to-high-end
products. This situation increases production costs and impacts both the efficiency and
progress of order fulfillment. Moreover, dependence on foreign raw materials results in
a local content rate of only about 40-45% for Vietnamese footwear products. This makes

it difficult to meet standards required to benefit from export advantages such as reduced
tariffs under trade agreements like EVFTA. In the future, the footwear industry will face
significant restructuring challenges due to global changes in production and
consumption trends. Therefore, Vietnamese footwear companies need

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