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FOREIGN TRADE UNIVERSITY HO CHI MINH CITY CAMPUS GRADUATION THESIS Major: International Business Economics TECHNICAL BARRIERS TO VIETNAM LEATHER FOOTWEAR EXPORTED TO THE EUROPEAN UNION MARKET Author: Nguyen Ngoc Mai Student ID: 1001017145 Class: K49CLC3 Supervisor: Tran Quoc Trung Ho Chi Minh City, May 2014

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Page 1: Technical barriers to Vietnam leather footwear exported to the European union market

FOREIGN TRADE UNIVERSITY

HO CHI MINH CITY CAMPUS

GRADUATION THESIS

Major: International Business Economics

TECHNICAL BARRIERS TO VIETNAM

LEATHER FOOTWEAR EXPORTED

TO THE EUROPEAN UNION MARKET

Author: Nguyen Ngoc Mai

Student ID: 1001017145

Class: K49CLC3

Supervisor: Tran Quoc Trung

Ho Chi Minh City, May 2014

Page 2: Technical barriers to Vietnam leather footwear exported to the European union market

TABLE OF CONTENTS

LIST OF ABBREVIATIONS

LIST OF TABLES AND CHARTS

PREFACE ................................................................................................................. 1

Chapter 1: OVERVIEW OF TECHNICAL BARRIERS TO VIETNAM

LEATHER FOOTWEAR EXPORTED TO THE EU MARKET AND THE

NECESSITY OF STUDYING TECHNICAL BARRIERS TO VIETNAM

LEATHER FOOTWEAR EXPORTED TO THE EU MARKET ...................... 4

1.1. Overview of technical barriers ..................................................................... 4

1.1.1. Definition of technical barriers ................................................................... 4

1.1.2. Roles and purposes of technical barriers .................................................... 4

1.1.3. Types of technical barriers .......................................................................... 5

1.2. Technical barriers to Vietnam leather footwear exported to the EU

market ............................................................................................................ 6

1.2.1. Regulation of Registration, Evaluation, Authorization and Restriction of

Chemicals (REACH) .................................................................................. 6

1.2.2. Labeling requirements ................................................................................ 8

1.2.3. Quality management system: ISO 9001 ................................................... 10

1.2.4. Environmental management system: ISO 14001 ..................................... 12

1.2.5. Social Accountability 8000 (SA 8000) ..................................................... 14

1.3. The necessity of studying technical barriers to Vietnam leather footwear

exported to the EU market ......................................................................... 16

1.3.1. For Vietnam economy .............................................................................. 16

1.3.2. For Vietnam enterprises ............................................................................ 18

1.4. Experience of China in overcoming technical barriers to leather

footwear and lessons for Vietnam .............................................................. 20

1.4.1. Reasons for choosing China ..................................................................... 21

1.4.2. Experience of China to overcome technical barriers to leather footwear

exported to the EU .................................................................................... 21

1.4.3. Lessons for Vietnam ................................................................................. 23

Page 3: Technical barriers to Vietnam leather footwear exported to the European union market

Chapter 2: CURRENT SITUATION OF VIETNAM LEATHER FOOTWEAR

EXPORTS TO THE EU MARKET AND OVERCOMING TECHNICAL

BARRIERS TO VIETNAM LEATHER FOOTWARE EXPORTED TO THE

EU MARKET FROM 2008 TO 2013 ................................................................... 24

2.1. Vietnam leather footwear exports to the EU market from 2008 to 2013 ... 24

2.1.1. Export turnover .......................................................................................... 24

2.1.2. Market structure ......................................................................................... 27

2.1.3. Export structure.......................................................................................... 29

2.2. Overcoming technical barriers to Vietnam leather footwear exported to

the EU market from 2008 to 2013 ......................................................................... 30

2.2.1. Meeting REACH........................................................................................ 30

2.2.2. Meeting labeling requirements .................................................................. 34

2.2.3. Meeting ISO 9001 ...................................................................................... 35

2.2.4. Meeting ISO 14001 .................................................................................... 37

2.2.5. Meeting SA 8000 ....................................................................................... 38

2.3. Comments ........................................................................................................ 39

2.3.1. Strengths .................................................................................................... 39

2.3.2. Weaknesses ................................................................................................ 42

Chapter 3: ORIENTED DEVELOPMENT AND RECOMMENDATIONS TO

OVERCOMING TECHNICAL BARRIERS TO VIETNAM LEATHER

FOOTWEAR EXPORTED TO THE EU MARKET FROM 2014 TO 2020

.................................................................................................................................. 54

3.1. Trends of leather footwear consumption in the EU market ........................ 54

3.2. Trends of application of technical barriers to leather footwear in the EU

market ..................................................................................................................... 56

3.3. Basic orientations and goals to overcome technical barriers to Vietnam

leather footwear exported to the EU market from 2014 to 2020 ....................... 57

3.3.1. Basic orientations ....................................................................................... 57

3.3.2. Detailed goals ............................................................................................ 58

3.4. Recommendations for improving the overcoming of technical barriers to

Vietnam leather footwear exported to the EU market from 2014 to 2020 ....... 59

Page 4: Technical barriers to Vietnam leather footwear exported to the European union market

3.4.1. Recommendations for the government ...................................................... 59

3.4.2. Recommendations for Vietnam Leather, Footwear and Handbag

Association ........................................................................................................... 68

3.4.3. Recommendations for Vietnam leather footwear exporting enterprises ... 75

CONCLUSION ....................................................................................................... 80

REFERENCES ....................................................................................................... 81

ANNEXES ............................................................................................................... 88

Page 5: Technical barriers to Vietnam leather footwear exported to the European union market

LIST OF ABBREVIATIONS

ABBREVIATION FULL MEANING

1 CMS Chemical management system

2 EMS Environment management system

3 EC European Commission

4 ECHA European Chemicals Agency

5 EU European Union

6 FDI Foreign Direct Investment

7 ISO International Organization for Standardization

8 LEFASO Vietnam Leather, Footwear and Handbag

Association

9 GSP Generalized System of Preferences

10 MARD Ministry of Agriculture and Rural Development

11 MOET Ministry of Education and Training

12 MNRE Ministry of Natural Resources and Environment

13 MOIT Ministry of Industry and Trade

14 MOLISA Ministry of Labor, Invalids and Social Affairs

15 MOST Ministry of Science and Technology

16 MPI Ministry of Planning and Investment

17 ODA Official Development Assistance

18 REACH Regulation on Registration, Evaluation,

Authorization and Restriction of Chemicals

19 R&D Research and Development

20 SVHC Substance of Very High Concern

21 TBT Technical Barriers to Trade

22 QMS Quality management system

23 USD US Dollar

24 VSQI Vietnam Standard and Quality Institute

25 SAI Social Accountability International

Page 6: Technical barriers to Vietnam leather footwear exported to the European union market

LIST OF TABLES AND CHARTS

No. Name of Table Page

1 Table 1.1: Total export turnover and export turnover of leather

footwear of Vietnam from 2008 to 2013 16

2 Table 2.1: Total export turnover and export turnover to the EU of

Vietnam leather footwear from 2008 to 2013 25

3 Table 2.2: Vietnam leather footwear export turnover from the 5

main markets in the EU from 2008 to 2013 28

4 Table 2.3: Number of ISO 9001 certificates given to Vietnam from

2008 to 2012 35

5 Table 2.4: Number of ISO 14001 certificates given to Vietnam

from 2008 to 2012 37

6 Table 2.5: Legal documents relating to supporting Leather and

Footwear industry to overcome technical barriers 41

7 Table 3.1: Production, consumption and external trade of footwear

of the EU market from 2008 to 2012 54

No. Name of Chart Page

1 Chart 2.1: Total export turnover of Vietnam leather footwear

exported to the EU and other countries from 2008 to 2013 24

2 Chart 2.2: Turnover ratio of three main export markets for leather

footwear of Vietnam from 2008 to 2013 27

3 Chart 2.3: Export turnover of Vietnam leather footwear to 5 major

export markets in the EU from 2008 to 2013 28

4 Chart 2.4: Export turnover of Vietnam leather footwear exported to

the EU in 3 categories from 2008 to 2013 29

5 Chart 2.5: Evaluation of Vietnam leather footwear companies of

their chemicals management system 31

6 Chart 2.6: Percentage of companies that have decreased revenue

from the EU market due to REACH from 2008 to 2013 33

Page 7: Technical barriers to Vietnam leather footwear exported to the European union market

7 Chart 2.7: Evaluation of Vietnam leather footwear companies of

their compliance to labeling requirements from 2008 to 2013 34

8 Chart 2.8: The implementation of ISO 9001 of Vietnam leather

footwear exporters to the EU market 36

9 Chart 2.9: The implementation of ISO 14001 of Vietnam leather

footwear exporters to the EU market 37

10

Chart 2.10: Evaluation of Vietnam leather footwear companies

about the importance of input material quality to overcoming

technical barriers

42

11 Chart 2.11: Proportion of three types of exports in total footwear

export turnover of Vietnam in 2013 43

12 Chart 2.12: Evaluation of Vietnam leather footwear companies

about capital support policy of the Government 45

13 Chart 2.13: Evaluation of leather footwear companies of their

attention to and investment in upgrading technology 48

14

Chart 2.14: Evaluation of Vietnam leather footwear companies

about the support of information from the Government and

LEFASO

49

15 Chart 2.15: Evaluation of Vietnam leather footwear companies

about connection between enterprises in the industry 53

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1

PREFACE

1. The reasons for choosing the research topic

Exports of goods and services today represent around 81% of Vietnam's

GDP (Cong Tri, 2014). For many years, export always plays a key role in the

development of Vietnam economy. It helps increase foreign currencies and create

the base to import modern machines and facilities to serve the modernization and

industrialization of Vietnam. Export also contributed to solve unemployment and

expand international trade relationships. Among the key export industries of

Vietnam, leather footwear plays the role of a spearhead with the third rank in terms

of export turnover. In 2012, Vietnam ranks fifth in top leather footwear exporters of

the world with 3.3% of total market share (World Footwear Yearbook, 2012).

According Vietnam's Socio-Economic Development Strategy for 2011 –

2020, Oriented to 2030, among the main import markets of Vietnam, the EU is

considered as one of the most important market because of its size, potential and

stable growth. From 2008 to 2013, EU is the largest export market of Vietnam

leather footwear with the export turnover each year exceeds 2 million USD.

Besides being a large and potential markets with great demands, the EU

applies a system of technical barriers for imported goods that are considered

worldwide strictest and most complicated. They are projected to become more

complex in the near future, posing a threat to the exports of Vietnam.

Acknowledging the importance of the EU technical barriers to the growth of

Vietnam leather footwear exports, a research on “Technical barriers to Vietnam

leather footwear exported to the European Union market” is chosen to meet the

urgent need of finding solutions to overcome those technical barriers effectively for

sustainable development in this market.

2. Prior studies relating to the topic

Prior studies relating to leather footwear exports mainly focused on

analyzing current situation of exporting leather footwear to the EU and other

markets in order to provide recommendations to increase exports. Nguyen Huynh

Thanh Thao (2011) analyzed factors of Vietnam and the EU market that affect

exports of leather footwear, which include the factor of technical barriers but did

Page 10: Technical barriers to Vietnam leather footwear exported to the European union market

2

not provide detailed research on the system of technical barriers as well as the

ability to overcome those technical barriers of Vietnam leather footwear. Regarding

research of technical barriers, Nguyen Thi Hong Anh (2010) mentioned technical

barriers as one of the mechanisms to restrict imports of the EU market but did not

go into details about technical barriers applied to specific commodities of Vietnam.

There are studies researching on technical barriers to other commodities of Vietnam

exported to foreign markets. Truong Thi Hoai Ngoc (2010) analyzes in details the

current situation of overcoming technical barriers to Vietnam agricultural products

and provides recommendations to enhance the ability of agriculture sector to

overcome those technical barriers. There have not been any studies that directly

address technical barriers to Vietnam leather footwear exported to the EU market.

3. The research purpose

The main purposes of this research include:

- Analyzing the current situation of overcoming technical barriers and ability

to overcome technical barriers of Vietnam leather footwear exports to the EU.

- Providing recommendations for Vietnam leather footwear to overcoming

technical barriers of the EU market.

3. The research object and scope

3.1. The research object

The research object is technical barriers to Vietnam leather footwear

exported to the EU market.

3.2 The research scope

Time: The current situation of overcoming technical barriers for Vietnam

leather footwear exported to the EU market is studied during the period from 2008

to 2013 and the recommendations are for the period from 2014 to 2020.

Space: The topic is researched within Vietnam country.

4. The research methods

Data collection methods: is applied to search and select relevant secondary

information (annual reports, specialized magazines, newspapers, legal documents

and so on) from available sources, such as the Internet and libraries.

Statistical methods: is applied to describe survey data from 51 leather

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3

footwear companies in Vietnam that export to the EU market and evaluate current

situation of overcoming EU technical barriers of Vietnam leather footwear.

Analysis method: is applied to analyze the reasons of strengths and

weaknesses in overcoming technical barriers of Vietnam leather footwear

companies, from which providing recommendations for improvement.

5. The structure of the research

Apart from table of contents, list of abbreviations, list of tables and charts,

preface, conclusion, reference and appendix, the thesis include three main sections:

Chapter 1: Overview of technical barriers to Vietnam leather footwear

exported to the EU market and the necessity of studying technical barriers to

Vietnam leather footwear exported to the EU market

Chapter 2: Current situation of Vietnam leather footwear exports to the EU

market and overcoming technical barriers to leather footwear exported to the EU

market from 2008 to 2013

Chapter 3: Orientations and recommendations to overcoming technical

barriers to Vietnam leather footwear exported to the EU market from 2014 to 2020

To complete this thesis successfully, I have received a lot of assistance from

Vietnam leather footwear exporters and Foreign Trade University. I would like to

thank all the leather footwear companies that completed the questionnaire to assist

me in collecting primary data for my research. From Foreign Trade University, I

would like to thank all lecturers of Professional Operation Faculty for their

enthusiastic help and support in the process of completing this thesis. Most

importantly, I would like to express my deep gratitude to MBA. Tran Quoc Trung

for providing me with detailed research method and academic guidance on the topic

as well as his dedication in explaining all of my concerns clearly.

Due to limited research time, limitations and shortcomings in this thesis are

inevitable. Therefore, the author hopes to receive valuable opinions from lecturers

and readers in order to improve the practical value of the thesis in the future.

Ho Chi Minh City, May 2014

Student

Nguyen Ngoc Mai

Page 12: Technical barriers to Vietnam leather footwear exported to the European union market

4

Chapter 1: OVERVIEW OF TECHNICAL BARRIERS TO VIETNAM

LEATHER FOOTWEAR EXPORTED TO THE EU MARKET AND THE

NECESSITY OF STUDYING TECHNICAL BARRIERS TO VIETNAM

LEATHER FOOTWEAR EXPORTED TO THE EU MARKET

1.1. Overview of technical barriers

1.1.1. Definition of technical barriers

Technical barriers to trade refer to technical regulations, minimum standards

and certification systems for health, safety and environmental protection and to

enhance the availability of information about products, which may result in the

erection of technical barriers to trade (The Organization for Economic Co-operation

and Development Glossary of Statistical Terms, 2003)

1.1.2. Roles and purposes of technical barriers

Technical barriers refer to mandatory technical regulations, voluntary

standards and the specific procedures followed to check whether a product is in

compliance with the requirements, which is called conformity assessment

procedures. The conformity assessment procedures can include, for example,

product testing, inspection, certification and accreditation activities.

Technical barriers can arise whenever a producer may have to alter his or her

product in order to conform to requirements of foreign partner countries such as for

health, safety, environmental and consumer protection issues. These requirements

can be imposed by both governments (technical regulations) and non-governmental

organizations (non-regulatory barriers, standards). The legal character of technical

regulations distinguishes them from non-regulatory barriers or standards. Non-

regulatory barriers or standards are voluntary, not legally binding and arise from the

self-interest of producers or consumers involved, for example, to improve the

information in commercial transactions and ensure compatibility between products.

Technical regulations mainly relate to either technical specifications or testing and

certification requirements in conformity assessment procedures (Paul Brenton,

2000). They have different implications for international trade. If imported products

do not fulfill the requirements of a technical regulation, they will not be allowed to

be put on the market. In case of standards, non-complying imported products will be

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5

allowed on the market, but then their market share may be affected if consumers

prefer products that meet local standards (WTO Technical information on TBT).

Technical barriers are usually introduced by government authorities with a

legitimate public policy objective in mind – for example, maintaining national

security, ensuring product quality, protecting human health and safety, animal and

plant life and health or the environment, or safeguarding consumers from deceptive

practices. Nevertheless, technical barriers often have an impact on trade and the

competitiveness of exporters. Adjusting products and production processes to

conform to different requirements in export markets, as well as demonstrating

compliance with these requirements, increase production costs and time-to-market.

Additional costs here involve loss of economies of scale when companies must

adjust their production facilities to diverse technical requirements of different

markets as well as conformity assessment cost and information cost. They can

considerably hurt the competitiveness of exporters. Therefore, technical barriers can

become effective protectionism tools. This is the reason for many exporters to put

technical barriers at or near the top of their prioritized concerns on trade barriers.

1.1.3. Types of technical barriers

Technical barriers may be divided into a number of different types. First, and

most important, are technical barriers used for the protection of human health and

safety. The largest number of technical standards and regulations are adopted for

this purpose. A wide variety of examples can be given, from standards on electrical

equipment, regulations on the use of fire-retardant materials in production of

household furniture, regulations on harmful materials in food and drink to labeling

of tobacco to indicate that they are damaging to human health.

The second type is technical barriers for the protection of animal and plant

health and life. They are adopted to protect endangered species and rare plants from

distinction. For example, some countries require that endangered species of fish

reach a certain length before they can be caught or ban the trade of specific animal

products like ivory and medical ingredients from endangered animals.

The third type is technical barriers put in place to protect the environment.

They may include requirements on levels of automobile emission or restriction

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against products that generate environmentally harmful substances such as CFCs.

Increasing concerns of consumers about the environment and raising level of

pollution have led to greater popularity of this type of technical barrier.

The final type is technical barriers for prevention of deceptive practices,

which aim to protect consumers through information by labeling, packaging and

classification requirement and controls on weights and measurements.

1.2. Technical barriers to Vietnam leather footwear exported to the EU market

1.2.1. Regulation of Registration, Evaluation, Authorization and Restriction of

Chemicals (REACH)

1.2.1.1. Overview of REACH

REACH, Regulation (EC) No 1907/2006 of the European Parliament and of

the council of 19 December 2006, governs the Registration, Evaluation,

Authorization and Restriction of Chemicals, which simplifies and consolidates more

than 40 former regulations. REACH came into force on June 1, 2007 to coalesce

and improve the former legislative framework on chemicals of EU. REACH is the

worldwide strictest regulation on chemicals. The European Chemicals Agency

(ECHA) has been established to manage registration and authorization, carry out

dossier evaluation, co-ordinate substance evaluation and restrictions on chemicals.

The main aims of REACH are to ensure a high level of protection of human

health and the environment from the risks that can be posed by chemicals, the

promotion of alternative test methods, and the free circulation of substances on the

internal market and enhancing competitiveness and innovation. REACH establishes

a registration system for chemical substances that requires the traceability of

chemicals and identification of substances within products.

Key elements and procedure of REACH include:

- Registration of chemicals in quantities of one tonne per year and above by

manufacturers and importers of chemicals, chemical preparations and articles.

Companies have the responsibility of collecting information on the properties and

the uses of substances that they manufacture or import at or above one tonne per

year. They also have to make an assessment of the hazards and potential risks

presented by the substance.

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- Evaluation of registered chemicals to establish if information submitted is

compliant, whether further information is needed (dossier evaluation) and additional

measures are required (substance evaluation) to ensure their safe use.

- Authorization of chemicals identified as substances of very high concern

(SVHC) - chemicals that may cause severe health or environmental problems —

before they can be made, imported or used in the EU market.

- Restrictions imposed on the manufacture, import and use of high risk

chemicals - chemicals which cause unacceptable risks to the health and environment

and which need EU-wide action. Restrictions may limit or ban the manufacture,

placing on the market or use of a substance.

REACH affects those companies based in the EU manufacturing, importing

or using quantities of one metric tonne or more per year of the following:

- Chemical substances, either single elements or their compounds

- Preparations, which mean mixtures or a solutions composed of two or more

substances (including plastics and alloys)

- Articles, which mean objects which during production are given a special

shape, surface or design that determines their function to a greater degree than does

their chemical composition. Examples of articles are garment, furniture and leather

goods. Leather footwear is classified as article.

1.2.1.2. Obligations of leather footwear exporters under REACH

Registration is the submission to ECHA of a technical dossier with

information on the properties of a substance and, if required, a chemical safety

report documenting the chemical safety assessment for this substance. Registration

of a substance in articles is mandatory for an article producer or importer only if the

following two conditions are met:

- The substance is intended to be released from the imported articles during

normal or reasonable foreseeable conditions of use.

- The total amount of the substance present in all articles imported, from

which the substance is intended to be released, exceeds 1 tonne per year.

The key part of REACH that affects the leather footwear sector relates to

substances in articles, whether those substances are intended to be released and

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whether they are SVHCs. Companies that place products onto the EU market

including manufacturers, importers and retailers of footwear, need to ensure that

their products do not contain substances above the set limits that have been

classified as SVHCs or as restricted substances.

The identification of a substance as a SVHC and its inclusion in the

Candidate List creates certain legal obligations for the importers, producers and

suppliers of an article that contains such a substance. SVHCs include those

classified as Carcinogenic, Mutagenic or toxic to Reproduction (CMRs), Persistent,

Bio accumulative & Toxic (PBTs) and very persistent very bioaccumulative

(vPvBs). SVHC Candidate List has undergone several updates and now there are a

total of 151 SVHCs in the list (updated April 2013). Producers and importers have

to notify to ECHA the SVHCs listed on the Candidate list that are present in their

articles no later than six months after the inclusion of the substance in the Candidate

List, if both the following conditions are met:

- The substance is present in their relevant articles above a concentration of

0.1% weight by weight.

- The substance is present in these relevant articles in quantities totalling

over one tonne per year.

Although REACH is a European regulation, irrespective of the location of

the factory, it does apply if the manufactured chemicals, leather or finished products

are finally sold on the European market. REACH will most likely affect parts of the

supply chain that are not directly involved in Europe because of the global nature of

leather footwear manufacture and tannery suppliers. Concerning the effect of

REACH to Vietnam leather footwear exporters, the EU importers shall ask Vietnam

producers to furnish requirement for submission to ECHA. It is important to note

that the submission of information to ECHA must be done by EU manufacturers or

importers. The obligation of foreign exporters is to provide information about

chemical substances in the products as required by EU importers to serve the

implementation of their legal duty with ECHA.

1.2.2. Labeling requirements

There is currently no EU-level framework that covers the labeling of leather

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and leather products. The EU has only set up legislation regarding the labeling of

footwear, and there is only limited legislation on leather product labeling in certain

European countries. Footwear labeling is covered by Directive 94/11/EC of the

European Parliament and Council of 23 March 1994, on the approximation of the

laws, regulations and administrative provisions of the Member States relating to

labeling of the materials used in the main components of footwear for sale to the

consumer. The amending act (Directive 2006/96/EC) came into force in 2007.

It was introduced because:

- There were different provisions in the EU Member States on footwear

labeling and these created obstacles to the functioning of the internal market

- Consumer interests needed to be protected by correct information risk of

fraud for both consumers and industry need to be reduced.

The Directive covers:

- For each pair, at least one of the footwear items (defined and illustrated in

the Directive) must bear information relating to the upper, the lining and insole

sock, and the outer-sole of the footwear article. The information may be conveyed

by means of approved pictograms or textual information, as defined and illustrated

in the Annex to the Directive, and must relate to the material which constitutes at

least 80% of the surface area of the upper, the lining and insole sock of the footwear

article, and at least 80 % of the volume of the outer-sole. However, if no single

material accounts for at least 80 %, information must be given concerning the two

main materials in the composition of the article.

- Given that the aim of the above measures is to provide information, the

label must be legible, durable and accessible, and the manufacturer or his authorized

agent established in the Community is responsible for supplying the label and for

the accuracy of the information contained on it. Only the information provided for

in the Directive has to be supplied, but there is nothing to prevent additional

information being given on the label.

The rules are:

- The labeling shall convey information relating to the three parts of the

footwear: the upper, the lining and the sock, and the outer sole (Article 1).

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- Either pictograms or written indications may be chosen (Article 3).

- The label must be visible on at least one shoe of the pair by printing,

sticking, embossing or using attached labels (Article 3).

- The manufacturer is responsible for supplying the label and for its

accuracy. If he is not established in the Community, the person who first places the

footwear on the market is responsible (Article 4).

1.2.3. Quality management system: ISO 9001

1.2.3.1. Overview of ISO 9001

ISO (the International Organization for Standardization) is a worldwide

federation of national standards bodies (ISO member bodies). The ISO 9000 family

addresses various aspects of quality management. The standards provide guidance

and tools for companies and organizations who want to ensure that their products

and services consistently meet customer’s requirements, and that quality is

consistently improved. ISO 9000 is divided into three parts respectively referred to

as: ISO 9001, ISO 9002 and ISO 9003. ISO 9001 is the standard that gives the

requirements for a quality management system. ISO 9001:2008 is the latest,

improved version. It is the only standard in the ISO 9000 family that can be used for

certification. ISO 9001 specifies the quality system requirements in the situation

where a supplier’s capability to design and supply conforming products is at issue.

The language of the ISO 9001 is that of what the supplier’s system ―shall‖ do. The

standard is aimed at achieving customer satisfaction through the elimination of

nonconformity at all stages of manufacturing and servicing.

ISO 9001 certification is not technically mandatory to export to the EU

market. However, exporters with certification will have more opportunities to gain

and maintain contracts with EU partners. Adherence to the ISO standards can also

be publicized to gain market access abroad, because many foreign buyers place a

premium on these standards (ITC, 2012). In addition, even if the law does not

require ISO 9001 certification, EU importers may require ISO 9001 compliance

from their suppliers since buying materials and products from ISO 9001 certified

businesses limits the importers’ exposure to product liability.

1.2.3.2. Procedure to implement ISO 9001

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Step 1: Team nomination

A small team consisting of a senior person from each of functions of the

company should be appointed by board of management for system development.

One member of the team should be designated as the coordinator; the management

representative could be given this role. The team should undergo awareness and

documentation training on the ISO 9001 with a professional training organization.

Step 2: Gap analysis

For the gap analysis, a flow chart should be drawn, showing how information

currently circulates, from order placement by the customer to delivery of the

product. Next, with the built diagrams, a list of existing procedures and work

instructions for the most relevant activities can be formulated. Throughout that

process, the company may identify some infrastructural gaps such as:

- The need for additional building space, equipment and machines, utilities,

facilities, support; the need for proper handling and storage of raw materials to

avoid their mix up and spoilage.

- The need for additional test facilities for routine testing of the product

during production and before dispatch to customers.

- The need for periodic check-ups of measuring instruments and subsequent

repair, maintenance or calibration.

Step 3: Documentation

QMS-related documents such as quality policy, quality objectives, process

performance parameters, skills requirements, quality manual, quality plans,

procedures and work instructions should be prepared. The documentation on

procedures and work instructions should reflect current practice.

Step 4: Training and implementation

Train all employees in how to use the new QMS. As the system gets

developed (refer to step 3 above), the implementation phase should get going at the

same time, i.e. supporting evidence like records, minutes of meetings and customer

feedback data should be maintained.

Step 5: Internal audit and improvement

Some of managers and staff of the companies should be trained by a

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professional trainer to carry out internal auditing of the QMS. The management

representative may also carry out audit management activities. After the system has

been implemented for about three months, trained auditors should conduct an

internal audit. Any gaps found during the audit should be corrected; any

modification required in the system documents should be carried out; any need for

additional awareness and skills training or improving the infrastructure should be

taken care of. Once the system stabilizes, internal audits should be conducted at

planned intervals, once every six months for example, or as needed.

Step 6: Management review

The management board should review internal audit results, customer

feedback data, status of quality objectives, analysis of process performance, product

conformity trends, status of corrective and preventive actions. As a result of this

review, management may decide to set new targets for quality objectives and to

make the improvements needed in the QMS. Management reviews should be held at

regular intervals, for example at least once every six months.

Step 7: Certification

Once the system has been in operation for a few months and at least one

internal audit and one management review has been conducted, the company may

consider applying for certification from an accredited certification bodies.

1.2.4. Environment management system: ISO 14001

1.2.4.1. Overview of ISO 14001

The ISO 14001 standard is an environmental management system standard,

not an environmental performance standard. The standard is designed to establish a

management system that evaluates and addresses how the organization interacts

with the environment. ISO 14001 is the world’s most recognized framework for

environmental management systems (EMS). The overall aim of an EMS based upon

ISO 14001 is to support environmental protection and the prevention of pollution in

a balance with socio-economic needs.

Although the EU claims that ISO 9000 certification is not required to do

business in the EU, that was the message received by many non-European

companies and lead to the success of that standard. If ISO 14001 is similarly

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successful, the companies who are already ISO 14001 certified will have an

advantage in the EU market. In addition, producers may find that many consumers

not only try to purchase from environment-friendly companies, but will spend a

little more if they feel they are helping the environment.

1.2.4.2. Procedure to implement ISO 14001

It will be possible for companies to integrate their EMS ISO 14001 with their

QMS ISO 9001, as they are compatible with each other (ITC, 2012). Within the

standard, there are 17 elements of ISO 14001 that are required to be met by

companies seeking formal recognition for their ISO 14001 EMS, as follows:

- An environmental policy supported by senior management;

- Identification of environmental aspects and impacts, and the identification

of significant environmental impacts that the organization may cause;

- Identification of environmental compliance requirements;

- Development of objectives and targets, and environmental management

programs of the company;

- Defined resources, roles, responsibilities and authorities for environmental

management of the company;

- Development of competence, training and awareness procedures;

- A communication process of the EMS to all stakeholders;

- Development of EMS documentation as required by the standard;

- Development of document control procedures;

- Development of operational control procedures;

- Development of emergency preparedness and response procedures;

- Development of procedures to monitor and measure operations that can

have significant impact to the environment;

- An evaluation of compliance procedure;

- Procedures developed for the management of non-conformance, corrective

and preventative actions;

- Development of a records management procedure;

- A program for completing internal EMS audits and corrective actions;

- Development of management review procedures by management board.

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1.2.5. Social Accountability 8000 (SA 8000)

SA8000 is an international standard developed by Social Accountability

International (SAI), a Non-Government Organization for improving working

conditions around the world. It is one of the world’s first auditable social

certification standards for decent workplaces, across all industrial sectors. It is based

on conventions of the ILO, UN and national law, and spans industry and corporate

codes to create a common language to measure social compliance. It takes a

management systems approach by setting out the structures and procedures that

companies must adopt in order to ensure that compliance with the standard is

continuously reviewed. Those seeking to comply with SA8000 have adopted

policies and procedures that protect the basic human rights of workers. As of June

2013, there are 3231 SA 8000 certified facilities.

SA 8000 is a voluntary requirement for companies that export to the EU. In

certain cases, importers of some product ranges may require SA 8000 when their

target customers highly value social responsibility, and a certification like SA 8000

significantly affect buying decisions.

Below are the nine elements in the SA8000 Standard:

- Child Labor: No use or support of child labor; policies and written

procedures for remediation of children found to be working in situation; provide

adequate financial and other support to enable such children to attend school; and

employment of young workers conditional.

- Forced and Compulsory Labor: No use or support for forced or compulsory

labor; no required 'deposits' - financial or otherwise; no withholding salary, benefits,

property or documents to force personnel to continue work; personnel right to leave

premises after workday; personnel free to terminate their employment; and no use

nor support for human trafficking.

- Health and Safety: Provide a safe and healthy workplace; prevent potential

occupational accidents; appoint senior manager to ensure occupational safety and

health (OSH); instruction on OSH for all personnel; system to detect, avoid,

respond to risks; record all accidents; provide personal protection equipment and

medical attention in event of work-related injury; remove, reduce risks to new and

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expectant mothers; decent dormitories- clean, safe, meet basic needs; and worker

right to remove from imminent danger.

- Freedom of Association and Right to Collective Bargaining: Respect the

right to form and join trade unions and bargain collectively. All personnel are free

to: organize trade unions of their choice; and bargain collectively with their

employer. A company shall respect right to organize unions and bargain

collectively; not interfere in worker organizations or collective bargaining; allow

workers freely elect representatives; ensure no discrimination against

personnel engaged in worker organizations.

- Discrimination: No discrimination based on race, national or social origin,

caste, birth, religion, disability, gender, sexual orientation, union membership,

political opinions and age. No discrimination in hiring, remuneration, access to

training, promotion, termination, and retirement. No interference with exercise of

personnel tenets or practices; prohibition of threatening, abusive, exploitative

behavior at workplace or company facilities.

- Disciplinary Practices: Treat all personnel with dignity and respect; zero

tolerance of corporal punishment, mental or physical abuse of personnel; no harsh

or inhumane treatment.

- Working Hours: Compliance with laws & industry standards; normal

workweek, not including overtime, shall not exceed 48 hours; 1 day off following

every 6 consecutive work days, with some exceptions; overtime is voluntary, not

regular and not more than 12 hours per week; required overtime only if negotiated.

- Remuneration: Respect right of personnel to living wage; all workers paid

at least legal minimum wage; wages sufficient to meet basic needs & provide

discretionary income; wages and benefits clearly communicated to workers; paid in

convenient manner – cash or check form; overtime paid at premium rate; prohibited

use of labor-only contracting, short-term contracts, false apprenticeship schemes to

avoid legal obligations to personnel.

- Management Systems: Facilities seeking to gain and maintain certification

must go beyond simple compliance to integrate the standard into their management

systems and practices.

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1.3. The necessity of studying technical barriers to Vietnam leather footwear

exported to the EU

1.3.1. For Vietnam economy

1.3.1.1. Contributing to increase export turnover

Vietnam’s leather footwear sector has been growing stably since the mid-

nineties and become one of biggest foreign currency earners for the country.

Leather footwear is one of the key export industries that take an important position

in the export structure. The average annual growth of export value of Vietnamese

footwear reached 17.35% in 2013 with total turnover of about 8.52 billion USD.

From 2008 to 2013, exports of leather footwear have retained the third rank in

contribution to total export turnover of Vietnam, behind crude oil and textile and

garments products (Vietnam Statistical Handbook, 2013). As shown in table 1.1, the

contribution of leather footwear exports to total export turnover of Vietnam from

2008 to 2013 is considerable with the stable level of 6 – 7%. From 2008, Vietnam

has been successful in retaining the position in top five largest footwear producers

of the world. In 2012, Vietnam ranked fifth in top leather footwear exporters with

total export turnover of 7.262 million USD (World Footwear Yearbook, 2012).

Table 1.1: Total export turnover and export turnover of leather footwear of

Vietnam from 2008 to 2013

Measurement: billion USD

2008 2009 2010 2011 2012 2013

Total export

turnover 62.685 57.096 72.236 96.905 114.529 132.134

Export turnover of

leather footwear 4.776 4.006 5.212 6.594 7.262 8.525

Ratio (%) 7.62 7.01 7.22 6.80 6.34 6.45

Source: Author’s collection from Statistical Handbook of Vietnam 2013

In EU market only, Vietnam ranks second behind China in terms of market

share. From 2008 to 2013, the EU maintained largest export market for Vietnam

leather footwear. Therefore, the performance of Vietnam leather footwear in the EU

has a significant impact on total export turnover of the sector, and thereby

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contributing to total export turnover of Vietnam. Besides economic crisis, one of the

most important reasons that can potentially hurt export turnover and development

prospects in the EU market is the increasing complication and rigorousness of

technical barriers. If products cannot overcome technical barriers, they will not be

allowed to be imported into the EU market. The failure in meeting standards and

regulations of the EU will certainly lead to decrease in export turnover and future

exports development. Therefore, the success in overcoming technical barriers will

contribute to maintaining and raising export turnover in the EU.

Compliance with standards and regulations of technical barrier system of the

EU would not only help Vietnam exporters increase export turnover in this market

but also create favorable conditions to expand exports in other developed countries

since Vietnam products have passed the strict test of quality of the EU. It will

contribute to enhance the international prestige of Vietnam leather footwear

products to facilitate development in many foreign markets and thereby, increase

total export turnover from leather footwear sustainably.

1.3.1.2. Contributing to promote industry development

In the effort to overcome stringent technical barriers of the EU market,

Vietnam leather footwear sector needs to implement projects to renew production

system and develop supporting industries. In details, Vietnam needs to increase

localization rate and reduce dependence on imported materials in order to better

control the quality of finished products. In addition, the need to overcome technical

barriers will encourage the development of infrastructure for leather footwear sector

as well as supporting industries. It will also provide an incentive for technology

modernization in each enterprise and the whole sector. New standards in production

will be likely to be applied in accordance with international standards. High

technical standards and strict regulations will also bring the need of establishing

industrial zones for large-scale expansion and benefits from economies of scale in

building facilities. Those factors will contribute to sustainable development of

industries, which will benefit Vietnam economy in the long run.

1.3.1.3. Contributing to create jobs and enhance quality of human resources

Leather footwear industry implies a great potential for employment,

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especially for free and unskilled labors from rural areas of Vietnam. According to

LEFASO, leather footwear sector is employing 670.000 workers (plus 500.000

workers in supporting industries) (Van Nam, 2014). The success in overcoming

technical barriers of a major market like the EU will help the sector to further

develop business, maintain stable market share and receive new orders, which will

contributing to increasing the need of labors. Therefore, it will facilitate job creation

and partly raise income of the labor force.

In addition, meeting high technical standards of the EU requires well-trained

and skilled labors to operate modern machinery and control the quality of products.

There is also a need to increase the expertise of managers and engineers to

implement and control system renewal. It will encourage investment in training

labor force, and thereby enhance the quality of human resources sustainably.

1.3.1.4. Enhancing trade between Vietnam and the EU

During the last two decades, trade relations between Vietnam and the EU

reached a high level of development. The EU is second largest trading partner and

biggest export market of Vietnam while Vietnam is fifth most important trading

partner of the EU in ASEAN. In 2012, bilateral turnover reached 29.1 billion USD,

in which exports to the EU reached 20.3 billion USD and imports from the EU

reached 8.8 billion USD (Department of multilateral trade policy, 2013).

The EU is the largest export market of Vietnam leather footwear, accounting

for 34.76% of total leather footwear export turnover in 2013. Overcoming technical

barriers will promote the exports of leather footwear into the EU market, which will

contribute to the total growth of Vietnam exports to the EU. If exports grow in a

large market like the EU, the foreign exchange earnings can be invested in

purchasing machinery and modern technology of the EU. It will contribute to

improving trade balance as well as further strengthen bilateral trade relations

between Vietnam and the EU.

1.3.2. For Vietnam enterprises

1.3.2.1. Contributing to enhance the prestige of Vietnam leather footwear in

international markets

The EU is considered the market with the most complicated and strictest

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regulations as well as high standards of quality in its technical barrier system. The

success in overcoming technical barriers of the EU can strongly prove that Vietnam

leather footwear products can meet high international quality standards from any

other markets. Therefore, by overcoming EU technical barriers, Vietnam leather

footwear can gradually establish and maintain the prestige of being safe and

friendly with the environment as well as having quality that is up to international

standards. The procedure of complying with technical regulations and meeting

standards of the EU is also the process of building trust with not only EU customers

but also international partners and customers of other export markets. It will prove

that Vietnam companies do pay attention to sustainable development,

environmental protection and social responsibility.

Thanks to that recognition, Vietnam companies can promote production and

exports to the EU as well as other countries in order to expand market share and

gain more profit. In addition, that prestige will be valuable asset in the marketing

strategy and the process of building brand name for Vietnam leather footwear,

which will support the long-term increase in added value of the industry.

1.3.2.2. Stimulating Vietnam leather footwear industry to improve capacity

Complicated and rigorous technical regulations of the EU have been forces

and stimulations for Vietnamese leather footwear businesses to consistently strive

for system adjustment and capacity enhancement to satisfy this difficult market. EU

end users are considered difficult consumers in making purchasing decisions. Not

only do they require high standard of quality and design, but they also demand to be

ensured that products must guarantee complete safety to their health and the

environment. In addition, they also have requirements about sustainability and

working conditions of labor force. Therefore, without technical barriers, it would be

easier for Vietnam leather footwear products to penetrate the EU market but still

difficult to satisfy and win the trust of EU customers. Technical barriers have been

giving Vietnam leather footwear industry the foundation to build the brand ―Made

in Vietnam‖ in the EU market. For instance, if Vietnam leather footwear complies

with strict regulation of chemical usage under REACH which already ensures safety

of products, obtain other certificates such as SA8000, ISO 9001 and ISO 14000, and

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meet all requirements of EU importers, Vietnam products have already passed the

test of EU consumers about quality, sustainability, safety to human health and

environment as well as working condition of laborers. That is the foundation for

Vietnam businesses to build the brand for Vietnam leather footwear, and continue to

increase export turnover and develop stably.

One of the purposes of technical barriers is actually to protect domestic

production from exports, but the standard of quality required is necessary and

reasonable. By putting effort in capacity enhancement to satisfy those high

standards, Vietnam leather footwear sector has strong motivation to improve

weaknesses in production system, human resources, infrastructure, technology and

supporting industries to further strengthen the ability of overcoming technical

barriers. All of those elements will increase the overall capacity of the industry in

all aspects for long-term sustainable development.

1.4. Experience of China in overcoming technical barriers of the EU to leather

footwear and lessons for Vietnam

1.4.1. Reasons for choosing China

China is the largest leather footwear producers and exporters of the world. In

2012, China ranks first in top footwear exporters of the world with 40.4% of total

market share (World Footwear Yearbook, 2012). In the EU market, China confirms

the continuity of leadership in market share, while Vietnam remains the second

rank. In recent years, despite negative effect of economic downturn, China still

maintains its number one position in leather footwear production and exports of the

world. Even though leather footwear products of China have been encountering

several difficulties due to stringent technical barriers from the EU, China has been

implementing several effective solutions to deal with them and keep their exports

stably in quality and turnover.

Leather footwear industry of China and Vietnam once share many common

features in production conditions as well as difficulties such as cheap labor, labor

intense, low technological level, etc. With the right orientations and prompt actions

to cope with difficulties and improve competency, China remains the stable position

of the largest exporter of leather footwear to the EU. Current improvement and

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growth of China as well as effective measures to cope with technical barriers of the

EU in similar situation with Vietnam needs to receive thorough consideration in

order for Vietnam leather footwear industry to obtain valuable lessons.

1.4.2. Experience of China to overcome technical barriers to leather footwear

exported to the EU

Controlling the quality of input materials is one of the priorities of China

manufacturers to ensure that their products comply with raising standards from the

EU. Therefore, China pays special attention to developing supporting industries, in

which tanning is the most important. Special emphasis has been paid on well-

planned development that aims at optimum utilization of domestic raw materials

and skilled labor for maximizing the returns and innovation of the industry in order

to meet demands of high-quality leather to produce footwear for exports. China has

detailed plan to control the quality of leather by developing castle breeding

specifically for tannery industry. The industry reports reveal that the annual

production of leather in China is around 7.7 billion square feet accounting for over

20% of total global. From January 1, 2006, the Government prohibited importing

raw hides for processing into leather for exports, in the effort to reduce low value

added processing in China. In September 2006, the Government continued to ban

importing skins and hides for processing trade, but allowed processing of imported

hides for exporting finished products like leather footwear. In addition, there is

quota restriction on the import of raw hides and skins for processing trade. The

processing trade is only allowed in Export Processing Zones under strict supervision

of Customs Administration in China (General Consulate of Pakistan in China, 2011)

Specialized industrial cluster has enabled Chinese companies to produce and

large volumes of footwear per order in the most cost efficient way. The close

location of similar producers in the cluster enhances efficient handling of

production and delivery, sharing of investment cost of building facilities and other

infrastructure like wastewater treatment plans.

Despite still being labor-intensive, leather footwear industry is not only

expanding but also modernizing while tacking with environmental problems to meet

standards of developed markets. In order to further enforce compliance with

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environmental regulations, 12th National Five Year Plan of China has compelled

leather footwear enterprises to carry out an energy saving method of production and

to reduce the level of contamination. In 2011, 183 enterprises were shut down in

2011 because their products generated high contaminations (General Consulate of

Pakistan in China, 2011). This rigorous enforcement motivates existing producers to

maintain sound production standards and upgrade their production lines with

environmental friendly materials and technologies. During five-year period, all

industrial sectors will focus on upgrading their technologies and products.

Upgrading technological level not only helps enhance the quality of China footwear

to meet high standards of the EU but also reduce costs in the long run, especially in

the current increase of labor cost, which will further strengthens price competitive

advantage of China leather footwear.

New standards according to international standards are started to apply in

order to make China footwear products approach required quality of developed

markets, including the EU, which will be a considerable advantage to overcome

technical barriers. In order to construct an updated system of standard for all

industrial sectors in China, in 2011, Ministry of Industry and Information

Technology of China introduced a system of newly approved standards for 359

industrial sectors, including 4 groups of standards for leather footwear industry in

China (General Consulate of Pakistan in China, 2011)

The China Association of Leather Footwear Industry has also set up an

industry early-warning system for making proactive responses to the technical trade

barriers and support enterprises in the industry with information for better

preparation to meet standards and regulations of foreign markets.

After 7 years of preparation, the executive plan of genuine leather mark and

eco – leather was put into operation on July 1, 2002. Genuine leather mark and eco-

leather refer to the different kinds of finished leather qualified for the certification

trademark "genuine leather mark". Such finished leather has to meet the

requirements and relevant provisions of specification for genuine leather mark and

eco-leather products in addition to satisfying corresponding present state and

industry standards (General Consulate of Pakistan in China, 2011). The trademark

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can be used as a signal of quality, creating an advantage for China footwear

products in international markets.

1.4.3. Lessons for Vietnam

From measures that China has been taking to cope with technical barriers of

the EU and more importantly, develop their leather footwear industry sustainably,

Vietnam can have valuable lessons and experience for future orientation. In details,

Vietnam should concentrate on the following issues:

Firstly, Vietnam needs to lay special emphasis on developing supporting

industries to increase localization rate and reduce heavy dependence on imported

input materials for better controlling the quality of finished products.

Secondly, in the long run, to meet increasing standards and regulations

required by the EU market, technology modernization is crucial. Vietnam leather

footwear companies should consider upgrading their production lines according to

EU standards and Vietnam Government should adopt policies to encourage and

support technology innovation of enterprises.

Thirdly, there should be specialized industrial cluster for the industry to take

advantage of economies of scales for cost reduction in building required facilities

for better compliance with technical and environmental regulations.

Fourthly, Vietnam should build new standards according to international

standards to give domestic companies the motivation to manufacturing in

conformity to standards of key export markets.

Finally, Vietnam should invest in enhancing the effectiveness of early-

warning system so that exporters can obtain full and updated information in order to

better prepare and find solutions to deal with technical barriers.

SUMMARY OF CHAPTER 1

Chapter 1 provides general knowledge of technical barriers and indicates

main regulations and requirements of the EU market to imported leather footwear

products from Vietnam. In addition, it points out the importance of researching

these technical barriers for Vietnam economy and businesses. Finally, it introduces

valuable experience of China in overcoming these barriers to draw practical lessons

for Vietnam leather footwear industry.

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Chapter 2: CURRENT SITUATION OF VIETNAM LEATHER FOOTWEAR

EXPORTS TO THE EU MARKET AND OVERCOMING TECHNICAL

BARRIERS TO LEATHER FOOTWEAR EXPORTED TO THE EU

MARKET FROM 2008 TO 2013

2.1. Exporting Vietnam leather footwear to the EU market from 2008 to 2013

2.1.1. Export turnover

Overall, total export turnover from leather footwear of Vietnam went up by

178.49% from 4,776.22 million USD in 2008 to 8,525.41 million USD in 2013. In

2009, export turnover bottomed out in the period with a decrease of 16.11%

compared to 2008 due to the negative effects of economic downturn. It is followed

by a dramatic recovery in 2010 with an increase of 30.09%, from 4,006.76 million

USD in 2009 to 5,212.25 million USD in 2010, which is the biggest growth rate

from 2008 to 2013. The figure of export turnover has been increasing continuously

from 2010 to 2013 and reached the peak at the end of the period.

Chart 2.1: Total export turnover of Vietnam leather footwear exported to the

EU and other countries from 2008 to 2013

Measurement units: million USD

Source: Author’s collection from statistics of LEFASO

The figure of export turnover from the EU of Vietnam leather footwear

follows a similar trend with the movements of total export turnover, which are a

decline in 2009 compared to 2008 and continuous growth from 2009 to 2013.

0

2,000

4,000

6,000

8,000

10,000

12,000

2008 2009 2010 2011 2012 2013

Total leather footwear exports to the EU Total leather footwear exports

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Table 2.1: Total export turnover and export turnover to the EU of Vietnam

leather footwear from 2008 to 2013

Year

Total Vietnam leather

footwear exports

Vietnam leather footwear exported

to the EU

Turnover

(million USD)

Growth

rate (%)

Turnover

(million USD)

Growth

rate (%)

% of total

exports

2008 4,776.22 11.96 2,484.72 14.14 52.02

2009 4,006.76 -16.11 2,007.27 -19.22 50.10

2010 5,212.25 30.09 2,403.57 19.74 46.11

2011 6,549.05 25.65 2,609.23 8.42 39.84

2012 7,262.32 10.89 2,650.19 1.57 36.49

2013 8,525.41 17.35 2,963.58 11.83 34.76

Source: LEFASO

In 2008, although global economic crisis started to show negative effects,

Vietnam leather footwear industry managed to keep business with the EU market

stable, which results in an increase of 14.14% in export turnover compared to 2007.

From January 1, 2009, EU removed Vietnam from the list of countries that can

enjoy generalized Scheme of Tariff Preferences (GSP - preferential tariff for poor

countries), which put a great pressure on domestic producers and exporters. The

loss of GSP status averagely increased import duties in the EU market by 3.5% to

5.5%, making duties on Vietnam leather footwear products surged to 8%. In

addition, the global economic crisis caused strong impacts on Vietnamese economy

in general and the leather footwear sector in particular. EU also suffered the effects

of the crisis, which reduced the consumption of footwear by 11.10%, according to

statistics of Eurostat. Export markets were more narrowed and the competition got

tenser. As a result, Vietnam’s leather shoes industry had to face many difficulties,

leading to a decrease of 16.11% compared to 2008.

In 2010, export revenue from the EU market of Vietnam leather footwear

amounted to 2,403.57 million USD, showing a relevant increase of 19.74 %

compared to 2009. The main reason for that stunning growth was the removal of EU

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anti-dumping duties imposed on the Vietnamese leather-capped shoes by the EC

from April 1. The lifting of the anti-dumping tariff on leather-capped shoes

produced in Vietnam was an advantage to expand exports in the EU market for

Vietnamese exporters, as they were no longer burdened with a 10% tax. Vietnam

leather footwear producers could then compete with competitors from India,

Indonesia, Bangladesh, Sri Lanka, Pakistan and Cambodia. The removal of the anti-

dumping duties opened opportunities to boost exports in the 27-nation market for

Vietnam exporters while exposed it to strong competition at the same time.

The growth rate in 2011 slowed down with an increase of 8.42% compared

to 2010. Vietnam producers were confronting fierce competition from Chinese

leather footwear exporters who no longer suffered the tariff of 16.5%. With most

EU nations facing financial crisis in addition to rising competition in prices from

Chinese products, Vietnam’s leather footwear sector grew sluggishly during the

2012 as compared to 2011, and achieved a growth of only 1.57%.

Vietnam's footwear export turnover in the EU market hit a record high of

2.963,68 million USD in 2013, up 11.83% year-on-year. The export turnover of

leather footwear reached a relatively high growth rate due to the gradual recovery of

the EU market. Vietnam also benefits a lot from the information of GSP of EU.

From 2014, under the new regulations of GSP provided to developing countries

including Vietnam, the leather and footwear industry is taken out of the maturity list

of the EU and GSP within three years, from January 1, 2014 to December 31, 2016.

The tax rate applied on Vietnamese leather footwear exports to the EU will be

reduced from 13 - 14% to 3 - 4%. EU importers start to take advantage of the

upcoming preferential level of tariff by increasingly moving orders and production

from China to Vietnam. Domestic leather footwear companies are preparing to

catch new opportunities from GSP to increase exports to the EU. Therefore, in

2014, export turnover from the EU market of Vietnam leather footwear products is

expected to be further promoted.

The EU has retained the position as the biggest market for Vietnam leather

footwear from 2008 to 2013. However, the dependence of Vietnam leather footwear

on this export market has gradually decreased.

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Chart 2.2: Turnover ratio of three main export markets for leather footwear of

Vietnam from 2008 to 2013

Source: Author’s collection from data of LEFASO

As can be seen from Chart 2.2, there is a continuous decrease in the

proportion of export turnover from the EU compared with that from two other main

markets of Vietnam leather footwear, which are the US and Japan. The proportion

of exports to the EU out of total exports turnover of leather footwear has been

declining continuously from 52.02% in 2008 to 34.76% in 2013. The proportion of

export turnover from the EU out of total exports turnover from the EU, the US and

Japan of leather footwear also decreases from 63.5% in 2008 to 56.8% in 2013. This

is the result of the efforts to increase diversification of markets of leather footwear

sector. It confirmed Vietnam’s success in diversifying its exports to the EU and

reducing over-dependency on single commodities. One of the motivations for that is

the increasing complication and strictness of technical standards and regulations of

the EU, which poses considerable challenges to expand business in this market as

well as incurs additional costs for Vietnam leather footwear companies to adjust

production system for overcoming those stringent barriers. It leads to a change in

strategy of exporters to reduce focus on the EU market and develop exports in other

countries with lower technical barriers than the EU.

2.1.2. Market structure

Among EU Member States, Germany, The UK, Belgium, France and Italy

are main importers of Vietnam leather footwear with the largest export turnovers.

Overall, Vietnam leather footwear exported to the mentioned markets accounted for

0% 20% 40% 60% 80% 100%

2008

2009

2010

2011

2012

2013

The EU The US Japan

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54% to 65% of total export turnover from the EU market between 2008 and 2013.

Table 2.2: Vietnam leather footwear export turnover from the 5 main markets

in the EU from 2008 to 2013

Measurement units: million USD

Source: ITC Trademap

Export turnover from all five major markets decreased in 2009 due to the

negative impact of economic crisis in the EU. From 2009 to 2013, export turnover

from Germany, France and Belgium went up stably, while the UK and Italy market

shows slight decrease year-on-year.

Chart 2.3: Export turnover of Vietnam leather footwear to 5 major export

markets in the EU from 2008 to 2013

Measurement units: percentage

Source: Author’s collection from statistis of ITC Trademap

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2008 2009 2010 2011 2012 2013

Germany UK Belgium France Italy Other EU countries

2008 2009 2010 2011 2012 2013

Germany 515,037 372,414 408,115 500,447 500,705 553,578

The UK 448,636 377,389 375,949 349,254 305,822 307,216

Belgium 230,027 186,997 202,389 224,212 250,021 270,343

France 263,783 242,719 250,811 288,171 286,760 302,818

Italy 150,140 125,674 138,660 126,724 126,216 144,325

% of turnover from EU 64.75 63.50 57.24 57.06 55.45 53.25

Page 37: Technical barriers to Vietnam leather footwear exported to the European union market

29

The five largest import destinations in the EU for leather footwear products

from all countries are The UK, Germany, Italy, France and Spain (CBI, 2012). The

UK, Germany, Italy and France are also four largest markets in the EU for Vietnam

leather footwear exports and has stably maintained this position from 2008 to 2013.

Although Belgium is not in the list of five largest EU imports for the leather

footwear, it remains the third main market for Vietnam products, partly due to long-

term trade relationship between Belgium and Vietnam.

The EU market for footwear is large and diversified. EU countries that are

particularly interesting for producers from developing countries are Germany, UK

and Denmark, as well as some of Eastern EU countries. Germany and UK are also

two largest export markets of Vietnam. However, in Western Europe countries,

there is growing preference of a part of consumers for products with origin marking

on a label such as ―Made in Italy‖ or ―Made in France‖, which have a higher

perceived value than products made elsewhere (CBI, 2012). It can be the reason for

decreasing proportion in total Vietnam leather footwear export turnover from the

EU of 5 main markets from 64.75% in 2008 to 53.25% in 2013, while turnover

from other countries, including Eastern EU markets have been keeping increasing.

2.1.3. Export structure

Chart 2.4: Export turnover of Vietnam leather footwear exported to the EU in

3 categories from 2008 to 2013

Source: Author’s collection from statistics of LEFASO

As shown in Chart 2.4, structure of Vietnam leather footwear exports to the

EU remains relatively stable. From 2008 to 2013, women shoes accounts for the

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013

Others

Sandals

Men shoes

Women shoes

Page 38: Technical barriers to Vietnam leather footwear exported to the European union market

30

largest proportion in export turnover from the EU, followed by men shoes and

sandals. In the EU, women shoes are the largest segment for leather footwear.

The proportion of export turnover from women shoes increased from 45.2%

in 2008 to 58.9% in 2013. It can be explained by the increasing ratio of working

women, which is the most important segment for leather footwear in the EU, from

53.5% to 59.1% between 2008 and 2013, according to Eurostat. The proportion of

turnover from men shoes exports decreases continuously from 38.4% in 2008 to

31.7% in 2013, relatively to the raising turnover from women shoes and also due to

stronger tendency of men to cut down on leather shoes, which can be considered

non-essential commodity to them, in financial difficulties.

2.2. Overcoming technical barriers to Vietnam leather footwear exported to

the EU market from 2008 to 2013

For the purpose of collecting primary data and information about the actual

situation of overcoming technical barriers to Vietnam leather footwear exported to

the EU market of Vietnam companies to analyze the strengths and weaknesses,

author conducted a survey. The author contacted by phone and sent email to 230

leather footwear companies in Vietnam in order to request them to complete

questionnaire from 10 March 2013 to 15 April 2013. A total of 72 responses were

received, in which 67 responses are valid, constituting a representative sample of

the population. In 67 companies with valid responses, 51 companies export leather

footwear to the EU. The result of the survey is processed by Microsoft Excel.

2.2.1. Meeting REACH

Vietnam leather footwear exporters play a critical role in the supply chain in

regards to the process of REACH compliance. In order to carry out registration and

notification with ECHA, EU leather footwear importers need to identify substances

in their products by obtaining information from their non-EU suppliers. If a

Vietnam leather footwear company is unable to provide information and

certifications required by EU importers leading to their failure in registration and

notification, their products will not be placed in the EU market and their EU

partners will be forced to look for new exporters.

In order to provide required information for EU importers, Vietnam leather

Page 39: Technical barriers to Vietnam leather footwear exported to the European union market

31

footwear exporters need to identify the answers for the following questions:

- What chemical substances are included in their products?

- What chemical substances are intended to be released from products? If

there are, does the total amount exceed one tonne per year?

- What Substances of Very High Concerns (SVHCs) and Restricted

Substances (Azo dyes are often used in the coloring process of several leather

products. Their use is restricted in products marketed in the EU under REACH) are

contained in the products?

To obtain the above information, Vietnam companies need to set up a

chemicals management system (CMS) to collect, manage and report the presence of

substances in products from the first step of purchasing raw materials to the final

step after finishing leather footwear products. CMS reflects the ability of companies

to fulfill its obligation under REACH (Nguyen Xuan Vinh, 2011).

Chart 2.5: Evaluation of Vietnam leather footwear companies of their

chemicals management system

Measurement: Percentage of companies

Source: Survey result

According to survey results, 27.44% of producers are confident that they

have good and very good CMS. It demonstrates results of investment and taken

measures of these companies in building and enhancing their CMS for REACH

compliance. An effective CMS will optimize process and save time while all

chemical substances are well controlled and reported. Therefore, nearly a third of

companies can better ensure the fulfillment of their obligations under REACH.

However, it is notable that 21.58% of companies admit that their CMS is not good

and CMS of more than half of companies remains at average level. It shows that

3.92

23.52

50.98

21.58

0 0

10

20

30

40

50

60

Very good Good Average Not good Not at all good

Page 40: Technical barriers to Vietnam leather footwear exported to the European union market

32

there are still difficulties in chemicals management process of a majority of

Vietnam leather footwear companies, which poses risks to meeting their obligations

required by EU importers for REACH compliance.

The effectiveness of CMS, and thereby the obligation’s fulfillment under

REACH, is decided by three stages, which are purchasing and controlling input

materials, production and inspection of finished products.

Production for direct export contracts will be affected more by REACH than

manufacturing as processors. In 2012, according to General Department of Vietnam

Customs, 52.7% of export turnover of leather footwear is from processing for

foreign importers. Survey result shows that 45.10% of companies have direct export

contracts with EU importers, while 54.90% manufacture completely as processors.

Under processing contracts, EU buyers provide materials or demand Vietnam

producers to use material of prestigious suppliers appointed by them. EU buyers

then obtain information about chemical substances intended to be released and

SVHCs from these suppliers. Vietnam producers undertake less responsibility by

managing chemicals used in production and inspecting finished products. In direct

export contracts, Vietnam companies have to source and purchase all materials.

Domestic producers still heavily rely on material imports, as quality supplies in the

nation are not adequate to meet standards of the EU. Localization rate in 2013 is

45% and domestic tanneries can only supply for about 20% to 30% of total leather

demand for footwear production (Duy Phuong, 2014). Importing raw materials from

diverse and unsystematic sources reduces the level of engagement of Vietnam

companies with their suppliers in relation to REACH compliance. Therefore, it is

more difficult, time-consuming and complicated for Vietnam leather footwear

producers to obtain information about chemical substances in raw materials.

In production stage, a significant part of companies has implemented quality

management system according to ISO 9001, which further ensure the capability of

their system in manufacturing products that conform to required standards of EU

importers. Therefore, it is an advantage to enhance the effectiveness of CMS.

However, existing weaknesses in production system like outdated technology and

low skills of labor are still hindrances to the process of managing chemicals.

Page 41: Technical barriers to Vietnam leather footwear exported to the European union market

33

In inspection of products, a substantial majority of companies (70.59%,

according to survey result) does not have laboratories to check chemical content of

raw materials and finished products. It is common practice to perform chemical

analyses of materials used for production or of final products, which can serve to

obtain information needed for compliance with REACH. The lack of internal

laboratories will result in insufficient control of chemicals in testing and inspection

not only of finished products, but also of raw materials and during production.

Chart 2.6: Percentage of companies that have decreased revenue from the EU

market due to REACH from 2008 to 2013

Measurement: Percentage of companies

Source: Survey result

As shown in chart 2.6, from 2008 to 2013, a majority of companies consider

REACH as one of the causes for the decrease in their revenues from the EU market.

In compliance with REACH, Vietnam companies have to modernize technology, set

up new systems or modify and enhance internal business processes. In addition,

they have to increase investment in human resources training to operate new

machinery and systems as well as in-house quality control and quality assurance to

intensify checks of chemical content. Price of raw materials also goes up since

suppliers have to incur additional costs due to REACH compliance, including the

cost to experiment and use new chemicals to substitute chemicals in Restricted

Substances List of REACH. All of them lead to substantial increase in cost.

Cost of initial investment and lack of awareness and preparation in the

beginning makes REACH become one of the reasons for the decrease in revenue of

100% companies in 2008 and 86.29% of companies in 2009. The percentage of

0

20

40

60

80

100

2008 2009 2010 2011 2012 2013

100 86.49

75 70 61.54

55.56

Page 42: Technical barriers to Vietnam leather footwear exported to the European union market

34

companies with reduced revenue due to REACH continually decreased from 100%

in 2008 to 55.56% in 2013, which demonstrates the raising effectiveness of

measures leather footwear companies have taken to fulfill their obligations.

REACH compliance compels manufacturers to budget for chemical testing.

Leather is a chemical-intensive material that contains about 17 in 73 SVHCs in the

Candidate List of ECHA (Nguyen Xuan Sinh, 2011). Vietnam leather footwear

exporters may need to send products to test centers or laboratories for toxicological

or eco-toxicological tests and analyses in order to obtain the information needed for

chemicals to be registered and notified. New tests and analyses must be executed

according the prescribed guidelines and must comply with Good Laboratory

Practice (GLP) or other international standards recognized by the EC or ECHA. The

inspection and certification are typically conducted in Hong Kong or Singapore as

qualified certification bodies are not available locally, making costs surge.

Due to the complication of REACH that requires considerable system

renewal and additional cost, REACH can increase the number of Vietnam leather

footwear companies that reduce exports to the EU and focus on other markets with

less strict regulation, especially SMEs. It will also hinder the development of direct

exporting to the EU. Leather footwear exporters will be likely to continue

subcontracting to avoid having to control chemicals in raw materials.

2.2.2. Meeting labeling requirements

Chart 2.7: Evaluation of Vietnam leather footwear companies of their

compliance to labeling requirements from 2008 to 2013

Measurement: Percentage of companies

Source: Survey result

17.64

56.86

25.49

0

0

0 10 20 30 40 50 60

Very good

Good

Average

Not good

Totally not good

Page 43: Technical barriers to Vietnam leather footwear exported to the European union market

35

It can be seen from Chart 2.7 that overall, Vietnam leather footwear

companies have complied relatively well with footwear labeling requirements of the

EU market. A majority of companies (74.5%) have good and very good results in

adhering to the requirements while the level of compliance of the rest is average.

There are no companies evaluating that their results in conforming to footwear

labeling requirements are not good or totally not good.

Since a large number of Vietnam leather footwear companies produce and

export to the EU as processors, EU importers commonly provide full package of

information required on label, designs of label and instruction for Vietnam

exporters to follow. In cases of direct exports, companies already gain adequate

experience in meeting labeling requirements from processing for EU importers. In

addition, directive of EC covering footwear labeling came into force in 1994 with

only some minor adjustments in 2006 so Vietnam companies are well familiar with

the requirements. All of them are reasons for positive results of leather footwear

companies in complying with labeling requirements of the EU from 2008 to 2013.

2.2.3. Meeting ISO 9001

Table 2.3: Number of ISO 9001 certificates given to Vietnam

from 2008 to 2012

Year 2008 2009 2010 2011 2012

Number of certificates 3971 7333 2036 4779 6144

Growth rate (%) 84.67 -72.23 134.72 28.56

Source: ISO survey

ISO 9001 can be considered the most used and well-known standard for

QMS in Vietnam. Despite fluctuations from year to year, the number of certificates

given to Vietnam from 2008 to 2012 remains at relatively high level. There is a

dramatic increase in 2009 partly due to the tendency of companies to request

external audit from an accredited certification body after the publication of version

2008 in order to obtain an updated certification. It, along with the effect of

economic crisis, leads to a relevant decrease of 72.23% in 2010. From 2010, that

figure increases stably year-on-year and reached a peak of 6144 certificates in 2012.

According to survey result, only 11.76% of asked leather footwear

Page 44: Technical barriers to Vietnam leather footwear exported to the European union market

36

companies are not preparing QMS with the seek for ISO 9001 certification. A

significant majority are choosing to adopt the ISO 9001, in which 37.26% of them

obtained certification and 50.98% are preparing and implementing required QMS of

ISO 9001. The figures demonstrate the widespread implementation of ISO 9001 in

the industry. The main motivation for adopting ISO 9001 is the requirement of

many EU importers. The most common benefits experienced by adopter of ISO

9001 management systems include higher conformity and reliability of products,

reduction of error rate and nonconformities (ITC, 2011). Therefore, EU importers

require ISO 9001 to ensure that leather footwear products manufactured by Vietnam

companies effectively comply with standards in quality.

Chart 2.8: The implementation of ISO 9001 of Vietnam leather footwear

exporters to the EU market

Measurement: Percentage

Source: Survey result

Besides improving conformity and reliability, QMS required by ISO 9001

has been acknowledged as enabling companies to standardize procedures and

technologies to control quality and process efficiency (ITC, 2011). Therefore, it

enhances the competency of Vietnam leather footwear producers in meeting other

technical standards and regulations of the EU. In addition, ISO 9001 certifications

help to overcome reputation problems of developing countries like Vietnam. ISO

9001 support entry in the EU market by signaling compliance with international

management rules for assurance of product quality, especially in industries with low

labor productivity like leather footwear. Pham Thu Huong - Director of Thuy Khue

Shoes Co. Ltd shared that thanks to the application of QMS ISO 9001, management

37.26

50.98

11.76 Obtained certification

Implementing required

QMS for certification

Not preparing to obtain

certification

Page 45: Technical barriers to Vietnam leather footwear exported to the European union market

37

and production capacity of the company had shown remarkable improvement, the

ability to overcome strict technical barriers of export markets had been enhanced

and their leather footwear products received increasing recognition of importers.

The company progressed from completely processing for foreign partners to direct

exports to more than 20 countries, including the EU market.

2.2.4. Meeting ISO 14001

Table 2.4: Number of ISO 14001 certificates given to Vietnam

from 2008 to 2012

Year 2008 2009 2010 2011 2012

Number of certificates 325 541 306 500 775

Growth rate (%) 66.46 -43.43 63.40 55.00

Source: ISO Survey

Despite moderate level of ISO 14001 certificates given to Vietnam each year

from 2008 to 2012, the economic importance of ISO 14001 is gradually increasing.

The number of ISO 14001 certificates obtained in 2012 is more than double than

that in 2008. In 2010, due to difficult financial situation of Vietnam companies,

there was a sharp decline of 43.43% in the number of certificates. However, the

figure recovered impressively in 2011 reached a peak of 775 certificates in 2012.

Chart 2.9: The implementation of ISO 14001 of Vietnam leather footwear

exporters to the EU market

Measurement: Percentage

Source: Survey result

As can be seen from Chart 2.6, a majority (60.78%) of responding leather

footwear companies are not preparing their environmental management system

9.8

29.42

60.78

Obtained certification

Implementing required

EMS for certification

Not preparing to obtain

certification

Page 46: Technical barriers to Vietnam leather footwear exported to the European union market

38

(EMS) according to ISO 14001 standard. Only 9.8% obtained certification, which

represents limited popularity of ISO 14001, and 29.42% are implementing required

EMS, which shows moderate enthusiasm to ISO 14001 among Vietnam leather

footwear companies. In general, Vietnam leather footwear companies mainly pay

attention to one immediate benefit, which is the possibility of signing contracts with

EU importers that require an ISO 14001 certification from importers. For big EU

importers, ISO 14001 certification appears to imply that an exporter is managing its

business well and showing environmental responsibility (ITC, 2011). The fact that a

Vietnam leather exporter was given the ISO 14001 by an independent entity

enhances perceived reliability. Therefore, EU importers feel more confident

engaging a new exporter, saving time and effort associated with clarification and

research prior to signing contracts with Vietnam leather footwear exporters. In

addition, EU consumers are increasingly interested in the environmental conditions

under which products are manufactured. The more that an importer believes that EU

consumers are environmentally conscious, the greater the likelihood that they will

choose ISO 14001 certified companies as exporters.

The number of ISO 14001 certification is projected to continue increasing

but not likely to show remarkable growth despite the increasing preference and

requirement of ISO 14001 from EU importers. Vietnam Government, Ministry of

Natural Resources and Environment and competent agencies have not adopted

practical policies to support Vietnam companies, including leather footwear

producers, in implementing EMS ISO 14001. In addition, low effectiveness in the

enforcement of national environmental regulations is a daunting deterrent to

companies that invest in environment management. Despite the above-mentioned

benefits, the costs of ISO 14001 certification to be sure are not trivial, and the

process is not easy. The cost - benefit analysis here shows that the returns of

investment are not attractive enough (ISO Vietnam, 2010). Since ISO 14001 is

generally a voluntary standard, except for mandatory requirements of importers,

Vietnam leather footwear companies are not willing to invest in ISO 1400.

2.2.5. Meeting SA 8000

According to statistics of SAI, as of June 2013, 79 Vietnamese companies

Page 47: Technical barriers to Vietnam leather footwear exported to the European union market

39

are certified to SA 8000. Currently, there are more than 650 leather footwear

companies in Vietnam but only four of them have SA 8000 certifications, including

Dong Hung Industrial Joint Stock company, Hung Huy Co. Ltd, Vinh Thong

Manufacture – Trading – Service Co. Ltd and Dae Woo Vietnam Co., Ltd. The

number of SA 8000 certified leather footwear companies of Vietnam is too small in

comparison to the total number of leather footwear companies, especially with the

current favorable conditions to implement SA 8000 in Vietnam.

There are several similarities between SA 8000 standards and policies

relating to protecting labor right of Vietnam. For example, Ministry of Labor,

Invalids and Social Affairs (MOLISA) of Vietnam prohibits discriminating, abusing

and forcing labors; and controls the number of overtime working hours to the limit

of not more than 4 hours per day and 200 hours per year. SA 8000 regulates

standard number of working hours to be 8 hours per day or 48 hours per week.

Policies about labor disciplines and wages of MOLISA are also similar to SA 8000

standards. Therefore, if Vietnam companies comply well with regulations of

MOLISA and Vietnam State, they already meet a majority of SA 8000 standards.

Despite the above-mentioned favorable conditions to get SA 8000, Vietnam

leather footwear companies currently do not decide to apply SA 8000 certification

since it is only a voluntary certification, not strictly required by EU importers and

potential benefits do not outweigh the high cost to obtain certificate. In details, cost

of making an application to be SA 8000 certified is approximately 15.000 USD and

the enterprises have to re-apply every three year (SAI, 2012). However, the

increasing concerns of EU consumers about working conditions and labor policies

of factories in developing countries will be likely to stimulate more EU importers to

require SA 8000 in order to create a competitive advantage in this difficult market.

2.3. Comments

2.3.1. Strengths

2.3.1.1. Increasing export turnover

Export turnover of Vietnam leather from the EU market has increased by

19.27% from 2,484.72 million USD from 2008 to 2,963.58 million USD in 2013.

Despite a decline in 2009 due to the strong negative influence of economic crisis,

Page 48: Technical barriers to Vietnam leather footwear exported to the European union market

40

positive growth rate was maintained in the period. From 2008 to 2013, the EU

retained the position as the largest market of Vietnam leather footwear products,

being ahead of the US and Japan. A factor contributing to the steady development

of Vietnam leather footwear in the EU market is the efforts of Vietnam companies

to overcome increasing technical barriers of the EU. If Vietnam producers and

exporters fail to comply with required regulations or meet set standards, their

products will not be accepted by the EU market, which will certainly hurt the

revenue of each company and thereby, the export turnover of Vietnam leather

footwear. To a certain extent, sustaining growth rate demonstrates the effectiveness

of the measures the Government, LEFASO and enterprises have been implementing

to overcome technical barriers to Vietnam leather footwear exported to the EU.

2.3.1.2. Growing number of companies meeting EU standards and regulations

It can be seen from the survey result that there is an encouraging

improvement of Vietnam leather footwear companies in satisfying standards and

complying with regulations required by the EU market. In details, the negative

impact of REACH on export revenue of companies gradually decreased from 2008

to 2013, 74.5% of companies comply well with labeling requirements, a majority of

companies is implementing QMS ISO 9001 while 37.26% obtained certificate,

29.42% of companies are implementing EMS ISO 14001 and 9.8% are certified.

These positive results can be explained by measures taken by Vietnam

companies to enhance their ability of overcoming technical barriers. For example, in

order to comply with REACH, Vietnam producers need to set up an effective

chemical management system. To obtain ISO 9001 and ISO 14001 certification,

companies have to invest in upgrading infrastructure, modernizing machinery,

strengthening the efficiency of human resources, optimizing work procedures, etc.

In addition, Vietnam exporters through many lessons learned in the difficult process

of meeting strict standards and regulations of the EU market are becoming more

mature and experienced with broadened knowledge of international trade.

2.3.1.3. Supporting policies from the Government

The Government has introduced policies to promote the expansion of leather

footwear sector as well as support the sector in overcoming technical barriers of

Page 49: Technical barriers to Vietnam leather footwear exported to the European union market

41

export markets. In details, policies are formulated to develop supporting industries

in order to raise localization rate and increase independence of raw materials.

Leather footwear sector has six prioritized products of supporting industries for

development including leather, artificial leather, tanning chemicals, salted leather

and sewing threads. As a large number of domestic leather footwear companies are

SMEs, support for SMEs by Decree 56/2009/NĐ-CP from the government is

essential. In addition, the Government established a specialized channel providing

information about technical barriers for Vietnam exporters. Overall, for systematic

and sustainable development of leather footwear industry, MOIT devises master

plan for each 10-year-period to determine orientation and goals for the sector.

Table 2.5: Legal documents relating to supporting Leather and Footwear

industry to overcome technical barriers

Number Published date Description

36/2007/QĐ-

BCN

August 6, 2007 Decision on the approval of Master Plan to

develop Leather and Footwear Sector to 2010

6209/QĐ-

BCT

November

25, 2010

Decision on the approval of the Master Plan to

develop Leather and Footwear Sector to 2020,

vision 2025

114/2005/QĐ

-TTg

May 26, 2005 Decision on the establishment of Vietnam’s

network of Notification Authorities and

Enquiry Points on Technical Barriers to Trade

and promulgate the Regulation on organization

and operation of the network

34/2007/QĐ-

BCN

July 31, 2007 The approval of the Plan to develop supporting

industries to 2010, vision 2020

1483/QĐ-

TTg

August 26,

2011

Decision on promulgating the list of products of

support industries prioritized for development

56/2009/NĐ-

CP

June 30, 2009 Decree on support for development of small

and medium sized enterprises

Source: Author’s collection from vanban.chinhphu.vn

Additionally, leather footwear sector of Vietnam is one of the beneficiaries

Page 50: Technical barriers to Vietnam leather footwear exported to the European union market

42

of supporting projects from the EU such as MUTRAP Trade Assistance Program III

with a fund of 1.7 billion EUR, Unido and Switch - Asia (Thuy Ngoc, 2013).

2.3.2. Weaknesses

2.3.2.1. Underdevelopment of supporting industries and heavy dependence on

imported materials

Inferior capability of supporting industries leads to continuing dependence of

Vietnam manufacturers on imported materials, which is a major cause for

difficulties of leather footwear products in meeting strict standard and stringent

regulations of the EU. According to economic experts, the impact of the Plan to

develop supporting industries to 2010, vision 2020 is still limited (Tri An, 2013).

Especially, incentives for enterprises in supporting industries in Decision

34/2007/QĐ-BCN are not detailed and very similar to incentives for SMEs

stipulated in Decree 56/2009/NĐ-CP. Primary supporting industries for the sector

include tanning, leather chemicals and production of artificial leather and auxiliary

materials, all of which are experiencing slow development. Imports from a broad

variety of sources create obstacles in controlling quality of finished products and in

conformity assessment procedure to overcome technical barriers.

Chart 2.10: Evaluation of Vietnam leather footwear companies about the

importance of input material quality to overcoming technical barriers

Measurement: Percentage of companies

Source: Survey result

According to survey result, 54.9% of companies consider that quality of

input materials is an important factor contributing to the process of overcoming

technical barriers while 41.18% consider it as a very important factor. Regarding

41.18

54.9

3.92

0

0

0 10 20 30 40 50 60

Very important

Important

Neutral

Not important

Totally not important

Page 51: Technical barriers to Vietnam leather footwear exported to the European union market

43

their attention to and investment in this factor, 40% of companies pay special

attention and make considerable investment while 52% pay adequate attention and

make investment though not considerable. The figures show that a significant part

of companies is well aware of the importance of raw material quality and willing to

make investment, but domestic sources cannot meet their demands.

There is strong evidence that domestic production of finished leather is

inadequate to supply for Vietnam leather footwear industry, especially for export

orientation. The total production capacity of domestic finished leather in 2013 is

350 mill sq feet per year, 3 times higher than that in 2006. Approximately 60% of

them are supplied to produce footwear for exports but can only meet 30% of total

demand. Each year, the sector has to spend 80 to 100 million USD to import leather

and 180 to 200 million USD to import artificial leather. In the period 2009 - 2013,

leather imports increased by 114% (Duy Phuong, 2014). In 2013, 97.3% of export

turnover of footwear are from footwear produced by imported raw materials, in

which 44.6% are from processing for foreign partners.

Chart 2.11: Proportion of three types of exports in total footwear export

turnover of Vietnam in 2013

Measurement: Percentage

Source: General department of Vietnam customs

Due to the lack of modern machinery and quality management system,

domestic tanneries encounter several difficulties in production to conform to export

quality standards required by leather footwear producers. Currently, there are only

35 tannery companies; most of them are operating in medium and small scale (Thu

Phuong, 2014). Outdated technique and limited scale result in inconsistent quality

52.7 44.6

3.7

Processing for foreign

partners

Produce by imported

materials and export

Produce by domestic

materials and export

Page 52: Technical barriers to Vietnam leather footwear exported to the European union market

44

of leather, which is likely to hamper the ability of finished footwear product to

satisfy specifications of EU importers. Therefore, despite certain disadvantages,

importing leather appears the optimal choice for Vietnam leather footwear

manufacturers for the sake of quality, time and convenience.

Unplanned livestock development is one of the factors inhibiting the

movement towards dependence of materials of Vietnam leather footwear. There is a

substantial disparity between the livestock population and output of hides and skins

due to the lack of well-planned castle breeding for the specific purpose of supplying

materials for tannery. Hides and skins are mostly by-products, taken from cows and

buffalos whose functions are plowing and providing meat and dairy.

The quality of finished leather is determined from two phases in production,

which are livestock-to-slaughter phase and leather processing phase. In Vietnam

where a majority of producers practices extensive livestock rearing, livestock

producers commonly let the animals roam freely to search for food, causing skin

scratches or wounds due to insect bites or objects like tree branches or bushes. In

the slaughter house where the hides are removed from the carcasses, bad execution

processes of the livestock create muscle and arterial stress. Depression of the

animals before slaughtering causes marks and scars on the hides or skins. If the

slaughterhouses use a manual cutting process instead of pulling machines, it can

cause holes on skins or hides and jagged flesh cuts. In the second phase that is

leather processing, the use of improper leather chemicals, such as expired chemicals

or chemicals mixed with other substance to expand the volume, also affects quality.

Finished leather is used in the third phase to produce footwear. The improper use

and lack of control of chemicals content in tanning leads to considerable difficulties

for footwear producers in obtaining information about chemical substances and

their quantity in finished products in order to provide reports for EU importers.

2.2.2.3. Limitation in infrastructure for the sector

Currently, there is no centralized industrial zone for leather footwear sector.

Vietnam leather footwear companies are in the lack of infrastructure foundation to

implement systematic measures to meet standards in quality and environment of

export markets, including the EU. For example, while there is growing pressure to

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45

apply clean technologies emanating from environmental regulations of Vietnam and

export markets, medium and small scales of separate factories result in

infrastructural constraints, leading to the burden of enormous investment in building

and adopting modern waste and effluent treatment on Vietnam manufacturers. In

addition, no production concentration puts companies in a disadvantage of high

cost-benefit ratios in the construction of modern facilities, which can be

significantly reduced by economies of scale thanks to specialized industrial clusters.

2.3.2.2. Lack of capital investment

Insufficient capital for investment in the development of infrastructure,

supporting industries and system adjustment impedes strategic development of the

sector, including large-scale expansion and shift of value along the value chain.

Therefore, it adversely affects the implementation of long-term measures to

improve production system for meeting standards and regulations of the EU market.

Chart 2.12: Evaluation of Vietnam leather footwear companies about capital

support policy of the Government

Measurement: Percentage of companies

Source: Survey result

In order to strengthen the ability to overcome technical barriers, companies

need capital to invest in upgrading technology, building infrastructure and training

human resources. However, a majority of companies have difficulty approaching

capital since 54.9% evaluate the capital support policy of the Government as

average while 43.14% think it is not good or totally not good.

Due to inadequate investment capital, leather footwear sector could not

achieve several principal targets determined in its development schemes. In the

0

1.96

54.9

37.25

5.89

0 10 20 30 40 50 60

Very good

Good

Average

Not good

Totally not good

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46

Master plan for Leather and Footwear sector development to 2010, the sector aimed

at attracting investment for building new modern tanning factories, auxiliary

material production centers and specialized industrial zones for leather footwear

production, which are facilities that can increase the capability to overcome

technical barriers of the industry. Total planned capital investment was 9,153.50

billion VND (1,844.20 billion VND for intensive investment and 604 billion VND

for tanning industry), in which contribution of domestic capital was 39% and of

foreign capital was 61%. However, in the context of economic crisis, high inflation

rate, adoption of policies to reduce investment of several economic sectors and

continuing decline of FDI, attracting capital was a huge challenge. Consequently,

the sector could not attain the set investment level to take off those projects.

Lack of capital for investment is the primary cause of heavy dependence on

imported materials as well as weak quality and environment management systems,

which considerably undermines the ability to overcome technical barriers.

Investment in production of raw materials is still limited since both domestic and

foreign investors are not willing to put such a large amount of capital in supporting

industries. Prospective investors would also be discouraged by the fact that they

would get into considerable difficulties to sell products in a market dominated by

cheap products from China. Not only do domestic enterprises refuse to invest in

supporting industries but FDI enterprises also put greater focus on investment in

footwear production due to the advantage of low required capital and shorter time

for capital recovery. For example, an investment of only from 1 to 1.5 million USD

in a production line can gain a capacity of 500,000 to 600,000 pairs per year (The

Hai, 2012). They pay less attention to investment in supporting industries that

require high investment capital and poor prospect of a quick return on investment.

Additionally, since the demand for using local raw materials is large, a number of

domestic leather footwear companies want to expand investment to producing

materials. However, the policies of the Government only encourage new investment

so leather footwear companies who invest in production of raw materials are not

eligible to benefit from preferential incentives. Concerning the establishment of

specialized industrial clusters, investors show hesitation due to enormous required

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47

funds while the plan is not detailed and convincing with various potential risks.

2.3.2.2. Low technological level

Despite remarkable development of Vietnam leather footwear in terms of

export turnover in the past 10 years, outdated machinery and low manufacturing

technology has weakened the competency of this sector to constantly meet criteria

and standards in quality and environment management system required by the EU.

Manufacturing technology of Vietnam leather footwear largely stays at low

and average level. New production process is being mechanized but not automated

and labor content remains high. Technology plays a decisive role in the capability

of producers in making products conforming to high standard of the EU and it is

also a key criterion in the QMS required by ISO. Therefore, outdated technology

places a negative impact on the ability to overcome technical barriers of leather

footwear companies. Peter T. Mangione, former President of Footwear Distributors

and Retailers of America (2012) commented after his visits to several leather

footwear manufacturing facilities in Ho Chi Minh City that a substantial part of

Vietnam leather footwear companies were still adopting obsolete manufacturing

technology that are highly fuel-consuming and labor-intensive. These production

lines had been adopted in Taiwan 20 years ago and were no longer employed in

many countries. Furthermore, despite abundant labor force, production capacity of

the sector remains low. A typical production line with 450 line workers reaches an

output of 500.000 to 600.000 pairs / year, which is only 1/35 of Japanese, 1/30 of

Thailand, 1/20 of Malaysia and 1/10 of Indonesia labor productivity (Anh Tuan,

2012). As standards in quality of leather footwear required by the EU market keeps

increasing with rising requirements in walking comfort, new designs and durability

of EU consumers, capacity of outdated machinery cannot ensure conformity of

products with updated specifications of EU importers.

Survey result shows that all companies evaluate technology as an important

or very important factor contributing to overcoming technical barriers but only

9.8% make considerable investment while the rest make no investment (43.14%) or

inconsiderable investment (47.06%). The reasons can be attributed to the lack of

investment capital and weak R&D capacity.

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Chart 2.13: Evaluation of leather footwear companies of their attention to and

investment in upgrading technology

Measurement: Percentage of companies

Source: Survey result

There is a notable lack of investment in science and technology of the sector

in recent years. A majority of companies do not have R&D division. R&D is

commonly implemented by foreign experts due to limited competency of Vietnam

staff. Concerning supporting industries, there is limited technology upgradation

fund scheme. In addition, there is insufficient conduct of national research with high

application to practical production of companies.

2.3.2.4. Exporting enterprises’ lack of information and awareness of technical

barriers from the EU

Information about technical barriers sets the foundation for Vietnam

businesses to embark on their journey into the EU market in order to act – rather

than react – to the challenges and risks encountered. The complex maze of technical

barrier system of the EU with high-level complication requires rigorous preparation

from industries of developing countries like Vietnam. This system is also subject to

frequent update and revision. It is critical for Vietnam exporters to equip themselves

with a complete, detailed and updated system of information to have a clear

direction for short-term and long-term planning in overcoming technical barriers.

However, there are several shortcomings in the understanding about

technical barriers of the EU of Vietnam enterprises. A significant part of export

enterprises is passive when complying with these regulations; they do not actively

43.14 47.06

9.8 0

10

20

30

40

50

No attention Limited

attention

Adequate

attention but no

investment

Adequate

attention but

inconsiderable

investment

Special attention

and considerable

investment

Page 57: Technical barriers to Vietnam leather footwear exported to the European union market

49

take measures to obtain information for better preparation. They tend to wait for

instruction of technical specifications and regulations provided by EU importers.

That inactive attitude hinders the success in implementing direct export contracts,

in which Vietnam companies take full responsibility of the whole process, making

it difficult to reduce the proportion of subcontracts in their total exports.

Vietnam enterprises have two main channels to access information about

technical barriers of the EU market that are domestic ones and international ones.

Regarding domestic ones, the overall effectiveness of information channel provided

by the Government and LEFASO is average according to the evaluation of 66.67%

of leather footwear companies. Only 9.8% recognize that the support is good, and

evaluation of the rest is not good.

Chart 2.14: Evaluation of Vietnam leather footwear companies about the

support of information from the Government and LEFASO

Measurement: Percentage of companies

Source: Survey result

An important domestic channel is Vietnam’s network of Notification

Authorities and Enquiry Points on TBT. The network is composed of Vietnam’s

TBT Office and Enquiry Point, Ministerial-level TBT Notification Authorities and

Enquiry Point and Provincial/municipal TBT Notification Authorities and Enquiry

Points. The function of the network is to provide information, notification and

support for enquiries of Vietnam businesses about TBT. Online TBT network

(www.tbtvn.org) and question-and-answer activities of enquiry points can be

considered the easiest available channels to approach TBT information for Vietnam

enterprises. However, online TBT network shows certain shortcomings.

23.53

66.67

9.8

Not good

Average

Good

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Firstly, the category of information on TBT online network of Vietnam is not

logical, systematic and easy to look up. Information and notification of TBT of the

EU market to Vietnam leather footwear is not gathered and classified into a specific

folder but mixed with technical regulations of other markets applied to a variety of

products. Leather footwear companies in need of searching knowledge about TBT

of the EU have to collect and re-systematize from different categories. Therefore, it

is time-consuming and inconvenient to have an overall view of TBT in order to

compare the requirement and importance of regulations and standards.

Secondly, the network does not offer sufficient instruction to comply with

technical regulations. It collects website links of agencies responsible for technical

standards and regulations of the EU but does not provide translated documents and

documents that guide the procedure for compliance, how to avoid and deal with

possible obstacles, as well as practical experience for Vietnam companies to apply.

Thirdly, there are no customized tracking and in-time reports on updated

information about TBT for key export commodities, including leather footwear. It

is inevitable that Vietnam companies have to turn to updated notification from other

sources or by directly contacting EU partners.

The above-mentioned weaknesses considerably reduce the effectiveness of

Vietnam TBT network in performing its function of information supporting about

TBT. Currently, international information channels, especially instruction provided

by EU importers, play the most essential role to Vietnam businesses. This source of

information is not only highly specialized with direct focus on requirements to

leather footwear products but also complete and updated. Nevertheless, since the

number of EU partners of each company is limited and each company has trade

relationships with different importers; this source of information is not unified and

general. In addition, Vietnam leather footwear businesses have the option to learn

about specific technical barrier of the EU in the website of EC and other related

responsible agencies such as SAI, ECHA, etc. or the website of WTO. This channel

meets all criteria of being detailed, complete and updated but language barriers

make it difficult for some Vietnam companies to fully approach. Additionally, each

website commonly provides certain technical standards or regulations, for example,

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echa.europa.eu only offers information about REACH.

2.3.2.3. Lack of human resources capacity and competency

The sector has been facing the lack of unskilled labor. In 2014, it is predicted

that the orders from EU importers will dramatically increase thanks to reduced tariff

under reformed GSP. Shortage of unskilled labors will put a pressure on production

system, hindering the ability of companies to overcome EU technical barriers. In

2008, there were approximately 750.000 employees working in about 516

enterprises of leather footwear industry. However, in 2013, despite the increase in

number of companies to more than 650, there is a decline in the number of

employees, to 670.000 workers. The main reason for workers giving up working in

the industry is low income; estimated average wage of leather footwear sector is

below 4 million VND (Van Nam, 2013). The sector remains among the most labor-

intensive industries, despite advances in technology and workplace practices

(International Labor Organization). As the nature of the sector is the predominant

composition of unskilled workers, the movement of labor to other sectors poses

significant threat to production capacity.

Skills and knowledge of human resources is a critical factor to successful

implementation of technology and system upgradation for the purpose of meeting

standards and complying with technical regulations. However, currently, there is no

specialized training center for the sector. There are only 8 universities and colleges

offering education and training in leather and footwear technology but investment in

infrastructure for training is limited. Therefore, there is a lack of skilled managers,

officers and technicians, who will manage and control production system to ensure

adherence to technical standards and regulations. Officers and technicians

commonly only graduate from relating majors and have to take additional courses

as well as spend a long period of on-the-job training before taking responsibilities.

In addition, a majority of leather footwear companies do not invest in marketing

division that can conduct market research and provide early-warning information

about technical barriers of the EU as well as other export markets.

According to survey result, despite the widespread awareness of the role of

labor force quality to overcoming technical barriers with 45.10% of leather

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52

footwear companies consider it as an important factor and 25.49% think it is a very

important factor, only 22% make considerable investment while the rest make

investment but not considerable.

2.3.2.5. Limitations in testing and inspection activities

One of the major advantages in the procedure of overcoming technical

barriers of the EU for Vietnam leather footwear is in the final stage, which is

conformity assessment procedures designed to test compliance of products to

mandatory regulations or voluntary standards. There is a serious lack of certified

laboratories for quality inspection of leather footwear products in Vietnam.

Laboratories of Vietnam accredited by Bureau of Accreditation can provide

conformity assessment services for a certain range of standards, but these labs

commonly do not operate in large scale with high capacity, so cannot fully meet

demands of Vietnam exporters. One lab usually provides services for a wide range

of products, prolonging waiting time to obtain certificates. Concerning standards of

chemicals, leather footwear products must be tested by laboratories of foreign-

owned companies or sent to certified labs abroad that comply with Good Laboratory

Practice. Only five laboratories are certified to perform conformity assessment test

for REACH, including labs of SGS Vietnam, Bureau Veritas Vietnam, TUV

Rheinland Vietnam, Intertek Vietnam and SUD PSB Vietnam. Several importers

compel Vietnam exporters to have their products tested and inspected by foreign

certification bodies in Hong Kong or Singapore, which incur considerable cost.

Although 58.8% of companies consider laboratories are important in meeting

EU standards and regulations, a substantial majority of leather footwear companies

(70.59%) do not have their own laboratories to control quality of raw materials and

ensure quality of finished products. In addition, Vietnam system of standards is too

outdated compared to current standards of EU, which means the compliance to

national standards of Vietnam companies is not recognized by EU importers. There

are 178 standards of Vietnam (TCVN) for leather footwear products but most of

them are about test methods. (Nguyen Xuan Vinh, 2011).

2.3.2.7. Lack of connections between leather footwear exporters

Doan Duy Khuong, Vice President of VCCI, President of ASEAN Business

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53

Advisory Council (2011) stated that the awareness of a majority of Vietnam

companies about the importance of business connections is still limited, especially

SMEs. Leather footwear companies are no exception. Overall degree of connections

between enterprises in the industry is relatively low with 60.78% of companies

evaluate that it is average while 31.38% think it is not good.

Chart 2.15: Evaluation of Vietnam leather footwear companies about

connection between enterprises in the industry

Measurement: Percentage of companies

Source: Survey result

In coping with technical barriers from the EU market, leather footwear

companies tend to implement solutions to overcome on their own, resulting in the

lack of experience and information that can be gained through cooperation and

mutual learning between enterprises in the industry. It is considerable disadvantage,

diminishing their ability to meet technical standards and regulations as well as

further enhance competitiveness in foreign markets. Apparently, if linkages between

leather footwear enterprises is strengthened, they can together find and carry out

effective solutions to overcome technical barriers of the EU market.

SUMMARY OF CHAPTER 2

From basic knowledge of chapter 1, this chapter analyzes current situation of

exporting Vietnam leather footwear to the EU and overcoming technical barriers of

this market. The analysis is conducted based on primary data from survey on 51

companies exporting leather footwear to the EU and secondary data from

prestigious agencies. Strengths and weaknesses are analyzed, which is the

foundation for author to provide recommendations in the final chapter.

31.38

60.78

7.84

Not good

Average

Good

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Chapter 3: ORIENTED DEVELOPMENT AND RECOMMENDATIONS TO

OVERCOMING TECHNICAL BARRIERS TO VIETNAM LEATHER

FOOTWEAR EXPORTED TO THE EU MARKET FROM 2014 TO 2020

3.1. Trends of leather footwear consumption in the EU market

The EU is the largest market for footwear in general and for Vietnam leather

footwear in particular. In 2012, according to Eurostat, footwear consumption of the

EU was 72 billion USD (2.87 billion pairs) with an average per capita expenditure

of 143.9 USD or 5.5 pairs. The market was dominated by five countries, which

accounted for 71% of total footwear consumption of the EU. These markets were

Germany, France, the UK, Italy and Spain.

Table 3.1: Production, consumption and external trade of footwear

of the EU market from 2008 to 2012

Measurement units: 1000 pairs

2008 2009 2010 2011 2012 % growth

2008 -

2012

Production 560,231 470,551 491,006 505,304 511,365 -8.72

Exports 172,369 153,292 168,402 191,500 201,267 16.77

Imports 2,428,402 2,247,836 2,521,994 2,550,505 2,568,255 10

Consumption 2,816,264 2,565,095 2,844,597 2,864,309 2,873,323 5.76

Imports/

Consumption

Ratio (%)

86.23 8.63 88.66 89.04 89.38

Source: Eurostat

Since 2004, sales of footwear in most EU countries increased quite rapidly.

In 2008 and 2009, footwear sales dropped in most EU countries due to the tendency

to cut expenditure on footwear of EU consumers. They were increasingly looking

for footwear at the low price range. The decrease in footwear consumption of the

EU market can be attributed to a sluggish economic performance leading to higher

unemployment rate and lower income, which reduced the demand for footwear,

particularly after 2007. As a result of the recession, market volume of imported

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footwear at cheap price has grown. Cheap imports were mainly mass produced

footwear from developing countries like China, Vietnam, and India.

After a period of decline and uneven recovery, this market grows again from

2010 and keeps growing until now. The consumption of footwear in the EU market

is predicted to continue developing but at a lower rate due to unstable economic

condition. The major stimulants are the changes in fashion trend, new footwear

styles as well as technological innovations in comfortable footwear. The market was

driven by footwear with good design, fashion and enhanced walking comfort. In

Eastern EU countries, formal leather footwear performed well along with the

growing middle class and a rapid expansion of shopping centers. On the long term,

besides developed big markets in Western EU Member States, there will be

continued opportunities offered by emerging middle classes, higher aspirations, and

disposable incomes in many Eastern EU countries (CBI, 2012).

The EU is the largest footwear importer of the world and the need for

imports has been increasing. As can be seen from table 3.1, in the period 2008 –

2012, more than 85% of footwear consumed in the EU comes from imports. The

percentage of imported footwear out of total consumption continuously increase

from 2008 to 2012 and is predicted to keep rising. Main exporters for EU footwear

consumption are from developing countries like China, Vietnam, Indonesia and

India. As the EU footwear industry strives to find strategy to cut cost and innovate,

there will continue to be opportunities for producers of developing countries to form

partnerships with EU companies who plan to keep control of their businesses but

would be prepared to save cost by outsourcing production to a lower cost country.

Even if the EU is not expected to experience considerable growth in the

coming years, it is predicted to be contrary movement of a part of consumers

towards cheap imported footwear from Asia. This implies a grading up to higher

value footwear in terms of design, comfort, technology, safety and friendliness to

the environment. Eco-fashion has become a segment in its own right within the

fashion industry. An increasing number of EU consumers, particularly in Western

and Northern Member States of the EU, have become more interested in the

material of footwear and conditions under which footwear are produced. Footwear

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designers and manufacturers are now being increasingly required to build some

form of sustainability or recycling into the material used. Even though EU

consumers are becoming more conscious of their expenditure, in particular their

non-essential expenditure, which is favorable for consumption of cheaper products;

exporters from developing countries like Vietnam should conduct frequent market

research in order to fully understand the latest trends in customer behavior for

planning of solutions to meet the requirements of EU buyers.

3.2. Trends of application of technical barriers to leather footwear in the EU

market

In a developed market where consumers have high living standard like the

EU, the primary concern is the health and safety of citizens and environmental

protection. The focus on sustainability and security leads to higher standards in

quality, safety and environmental friendliness of imported goods. Therefore, the

complication and rigorousness of regulations in technical barriers are likely to

increase, as well as the standards required will be higher and stricter.

There is a growing concern for environmental issues and the associated

barriers to international trade in products coming from industrial sectors located in

developing countries that could be affecting the environment, including leather

footwear industry. The leather footwear sector can potentially have a heavy impact

on the environment due to a number of chemical substances used in the treatment of

hides and skins into processed leather. In addition, footwear consumers worldwide

are becoming more aware of environmental and health effects of chemical

substances used in leather processing. This has led to a more effective monitoring of

environmental effects of developed countries to imported leather footwear products,

and the EU is no exception. Except for mandatory REACH, other environment

management certification like ISO 14001 and EMAS are currently not widely

required by EU importers. However, with the rising concerns of leather footwear

consumers about environmental issues, the number of EU importers requiring these

certificates from suppliers in developing countries will be likely to go up.

The use of chemicals in Europe has become considerably safer since the

REACH regulation entered into force (EC, 2013). More readily available

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information about chemical substances on the market and better targeted risk

management measures mean that risks from substances registered under REACH

have significantly decreased. The trend is expected to continue, as industries are

continuously working towards finding substitutes for the most hazardous chemicals.

List of SVHCs and restricted substances will continue to be added by ECHA along

with stricter control in the procedure of registering and evaluating chemicals.

3.3. Basic orientations and goals to overcoming technical barriers to Vietnam

leather footwear exported to the EU from 2014 to 2020

3.3.1. Basic orientations

In the Master Plan for Leather and Footwear sector development towards

2020, vision 2025 approved by Ministry of Trade and Commerce in 2020, the

following basic orientations are determined.

- Developing Leather and Footwear sector in accordance with national socio-

economic development plan and industry development plan, local socio-economic

development plans and roadmap for international integration of Vietnam.

- Mobilizing all economic sectors, domestic resources and attract foreign

capital to invest in building and developing the Leather and Footwear sector

towards production for exportation and domestic consumption, increase foreign

currency revenue for Vietnam, create more jobs, increase income and improving

living standards of labor force.

- Focusing on developing production of input materials and supporting

industries for Leather and Footwear sector in order to decrease deficit, further

participate in added value chain of international leather and footwear market;

Encouraging the concentration of resources to actively orient for exports and

enhance future added value chain of Leather and Footwear products. In details,

priority is put on expanding three fields: product designing, material production and

product testing and authentication in order to increase value and enhance

competitive advantage of Vietnam leather and footwear products, actively balance

domestic and imported input materials, save costs, control origins of products

through high localization rate.

- Developing Leather and Footwear sector quickly, stably and sustainably

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with a focus on specialization and modernization; applying new technology with

modern and environmental-friendly equipment to create high production capacity

and economic efficiency; active in regional and international integration, gradually

change production methods from processing to taking in charge of whole process.

- Implementing the rapid development of production scale along with

focusing on expanding export markets and domestic market; conduct science and

technology research and develop well-trained human resources, especially poor

laborer and labor forces that are carrying out transition in economic sectors from

agriculture to industry. Developing production on the foundation of corporate

responsibilities and environment protection.

- Enhancing the competency in designing and developing new products,

prioritizing the application of automatic technology in production and management.

3.3.2. Goals

3.3.2.1. General goals

The determined general goals of Leather and Footwear sector to 2020 are to

become a key and spearhead export industry of the national economy; continue to

uphold the position in the leading groups of leather and footwear producing and

exporting countries of the world; create more jobs for the society and increase

income of labor force; improve the implementation of corporate responsibilities and

increase the number of well-trained laborers.

3.3.2.2. Detailed goals

- Targeted growth rate of industrial production value of leather footwear

sector is 9,4% / year for the period 2011 – 2015, 8.8 % / year for the period 2016 –

2020, 8.2% / year for the period 2020 – 2025.

- Targeted export turnover is 9.1 billion USD in 2015; 14.5 billion USD in

2020 and 21 billion USD in 2025. Average growth rate of export turnover is

targeted to be 10.9% / year for the period 2011 – 2015, 9.7% / year for the period

2016 – 2020 and 7.6% / year for the period 2021 – 2025.

- Gradually increasing localization rate. Targeted localization rate is 60 –

65% in 2015, 75 – 80% in 2020 and 80 – 85% in 2025.

- Coordinating with Garment and Textile sector as well as other related

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sectors to be pillars of Vietnam Fashion industry.

- Building and establishing specialized industrial zones for Leather and

Footwear sector, producing input materials and implement management treatment

on the foundation of favorable conditions brought by infrastructure and labor in

order to actively provide materials for production and enhance competitive

advantage for the sectors.

- Establish and develop new training centers, science and technology

research institutes, inspection and certification centers, supporting services and

Trade Promotion centers, Fashion centers at home and abroad.

3.4. Recommendations for overcoming technical barriers to Vietnam leather

footwear exported to the EU market from 2014 to 2020

3.4.1. Recommendations for the Government

3.4.1.1. Facilitating the development of supporting industries

Importance of recommendation: The underdevelopment of supporting

industries leads to dependence on imported materials for production, high cost and

less control of quality of finished products, which are disadvantages in meeting EU

technical standards. Therefore, policies to develop supporting industries are critical.

Execution

Firstly, Ministry of Agriculture and Rural Development (MARD) should

develop planned castle breeding for leather in concentrated livestock farms with

suitable caring techniques in order to ensure the quality of hides and skins are not

affected by scratches and wounds due to free roaming of animals.

Secondly, to increase the current level of quality of hides, skins and finished

leather, MARD and Vietnam Leather and Shoes Research Institute should:

- Provide proper education to farmers about methods to treat the livestock to

obtain better quality of skins and hides.

- Provide proper training to the slaughterhouse by introducing and

implementing more advanced technology and awareness that the hides and skins are

not secondary products but products with high value.

- Support the establishment a pre-tanning association that organize all

business units from slaughterhouses to raw hide collectors as well as train and

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60

develop better methods of slaughtering, hanging, fleshing, curing, collecting and

transporting to tanning factories.

- Facilitate technical seminar to educate tanners on the importance of product

research, development, testing and certification.

Thirdly, the Government should support the sector to establish:

- Two leather and auxiliary material supply centers (one in the North and one

in the South) to promote the use of domestic materials.

- Two industrial clusters for tannery to produce finished leather (one in the

North and one in the South) with centralized waste and effluent treatment system to

meet the demands for high-quality leather of domestic consumption and exports,

and increase localization rate.

Fourthly, the Government should adopt policies to support enterprises in

supporting industries of leather footwear sector with tax preference, land, and

especially capital since financial capability of a majority of domestic companies in

limited while this field requires large investment. The Government can establish a

financial fund from ODA to develop supporting industries of sectors listed in

Decision 34/2007/QĐ-BCN, including leather and footwear sector, and specify

clearly scope of priority to ensure transparency in budgeting. This transparency can

help enterprises attract more investment. VDB should provide preferential loans for

SMEs in supporting industries.

Expected benefits: Development of supporting industries will increase

localization rate and reduce the dependence of leather footwear sector on imported

materials, which will gradually enable producers to gain greater control in

production, increase direct export and added value. Domestic sources of materials

with high quality can help companies save the cost of sourcing and transportation,

obtain information about specifications and safety of materials more easily to ensure

compliance with EU standards and regulations.

3.4.1.2. Developing specialized industrial zones for leather footwear production

and materials production

Importance of recommendation: No centralized industrial cluster results in

infrastructure constraints, lack of linkages between producers in the industry as well

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61

as high cost and difficulties in installing effluent treatment system and other modern

facilities due to no economies of scale, which hinders the ability of the industry to

meet EU standards and regulations. Therefore, it is essential to develop specialized

industrial zones for footwear production and tannery.

Execution

Firstly, Ministry of Planning and Investment (MPI) should make plans for

the projects of building:

- Two industrial clusters designated for leather footwear production that may

host production units of all segments namely footwear, footwear components,

leather goods, leather garments, one in the North and one in the South.

- Two industrial clusters for tannery industry to produce finished leather, one

in the North and one in the South, one in the North and one in the South.

There should be plan to ensure that all supporting industries are co-located in

nearby areas of industrial clusters for leather and footwear production, ensuring

rapid product development and lower freight costs. The industrial zone should

comprise of core infrastructure, social infrastructure, human resources development

infrastructure and R&D Infrastructure for facilitating sustainable development in all

aspects of leather footwear sector.

Secondly, considering the low risk-taking capacity of the existing investors

due to economic downturn while the investment required for building industrial

clusters is huge, the Government should adopt policies to attract investment from

both domestic and foreign investors. Some recommendations include:

- MPI can add the projects to encouraged category and provide investors

with incentives of preferential tax, land use fees and import tariff. For example,

corporate tax incentives with preferential tax rates like before Decree 124/008/ND-

CP of the Government should be applied such as a concessional 10% tax rate for the

duration of the project and a reduced level of withholding tax on the remittance of

profit overseas. Assets that form part of the capitalization of the investment are

exempted from import duties according to Decree 149/2005/NĐ-CP on detailed

provisions for the implementation of Law on Import and Export Duty. Land use

fees are reduced and stabilized for a long period of time, for example, 10 years.

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62

- The government should use ODA capital to sponsor for a part of capital

required to build certain facilities such as waste and effluent treatment plants.

- Another option is allow the projects to be eligible for public-private

partnership (PPP), which establishes a long-term contractual relationship between

the Government and a private sector party for the design and construction of the

leather footwear industrial clusters by the private sector, with payments made over

the life of the contract through services fees paid by the leather footwear companies

operating in the built industrial clusters to the private sector party for the use of the

infrastructure delivered.

Expected benefits: Exclusive industrial clusters for leather footwear

production and tannery help Vietnam producers achieve significant benefits through

economies of scale and specialization in production. Industrial zones also foster the

development of supporting industries, a high degree of inter-firm interconnections

that encourage knowledge and technology spillovers, thus stimulating productivity

and innovation. Therefore, they will facilitate the development of production

capacity, QMS and EMS, which enhance the ability to overcome technical barriers.

3.4.1.3. Implementing financial support policies

Importance of recommendation: Financial support policies from the

Government are essential to help leather footwear enterprises, especially SMEs,

solve the problem of lacking capital to invest in system adjustment for compliance

with technical standards and regulations of the EU market.

Execution

Firstly, Vietnam Development Bank (VDB) should adopt policies to support

SMEs in leather footwear sector, which is a key export industry of Vietnam. VDB

should provide credits and loans with preferential interest rates, raise credit limit,

extend loan term for feasible projects to build infrastructure, expand production,

upgrade machinery for exports, on condition that SMEs submit detailed financial,

and loan repayment plans.

Secondly, the Government should provide large-scale projects with

preferential access to ODA capital, for example, projects to build centralized

industrial cluster for the sector.

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Thirdly, Provincial Government of provinces where leather footwear is a

spearhead industry should encourage local banks to provide loans for leather

footwear SMEs with good business performance, provide guarantee for companies

to obtain loans from banks to carry out large-scale projects with high feasibility and

use Investment and Development Funds to support SMEs with low interest rate.

Fourthly, VDB should cooperate with environmental funds to provide

preferential loans for projects to build effluent treatment system, which will enable

companies to upgrade environment management system to meet EU standards.

Expected benefits: Leather footwear enterprises will have capital to invest

in the upgradation of infrastructure, technology, laboratories, quality and

environmental management system in order to enhance the ability to overcome

technical barriers of the EU market.

3.4.1.4. Implementing policies to support modernization of technology

Importance of recommendation: Low technological level of the industry

brings several difficulties in overcoming technical barriers due to the limited

capability to manufacture products that conform to standards of the EU. Therefore,

The Government should adopt policies to support the modernization of technology.

Execution

Firstly, the Government needs to carry out policies aimed at supporting

enterprises in importing modern machinery and equipment from countries with

developed leather and footwear industry such as Korea, Japan or the EU. Some

measures include reducing import duty and taxes as well as gradually simplifying

custom procedure for the importation of equipment and spare parts. In addition, the

Government should provide special incentives for enterprises to import machinery

and equipment for activities that contribute to increase added value of the sector like

designing, R&D and inspection.

Secondly, the Government should encourage and facilitate the cooperation of

Vietnam businesses with foreign companies in leather and footwear industry,

especially large-scale and transnational ones from the EU Member States. Vietnam

companies can thereby benefit from transfer of technology and know-how as well

as expertise that can enhance domestic production capacity according to EU

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standards. Additionally, effective policies to attract FDI should be strengthened

since FDI can foster positive technology spillovers.

Thirdly, the Government needs to carry out projects to enhance expertise in

consultation, science research, technology transfer of LEFASO and Vietnam

Leather and Shoe Research Institutes by intensive training provided by foreign

experts or giving scholarship for top specialists to attend courses overseas. The

efficiency of LEFASO in supporting leather footwear businesses in choosing

technology will be strengthened.

Fourthly, National Scientific and Technological Development Fund (and

other funds related to scientific and technological activities) should provide fund to

cover expenses arising from R&D and innovation activities of research institutes.

Expected benefits: These measures will stimulate companies to upgrade

technology of enterprises by importing new machinery. Companies will benefit

from enhanced expertise in consultation about technology of LEFASO. R&D and

innovation activities will have financial foundation to develop. As a result, they

contribute to increase technological level of leather footwear companies and

thereby, increase product quality, effectiveness of QMS and EMS.

3.4.1.5. Implementing information support policies

Importance of recommendation: The Government should improve the

effectiveness of early warning system for better support the preparation of

companies in coping with technical barriers of the EU market.

Execution

Firstly, MOST should improve the structure of TBT Vietnam online

network. The website should categorize information about standards, regulations,

technical specifications and detailed guidance on compliance procedure into

specific markets and commodities. Then, the website should offer Navigator tool to

enable exporters to search for technical barriers applied to specific goods of the

market to which they are exporting.

Secondly, provincial TBT enquiry points should enhance the effectiveness

of handling and responding enquiries on technical barriers. MOST should provide

intensive training for consultant of provincial TBT enquiry points about knowledge

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on TBT as well as customer service. Each enquiry point should recruit adequate

number of consultants to meet the demands of companies in the shortest time.

Thirdly, the State should strengthen the role of providing information of

Vietnam Embassy and Trade Offices in EU countries, who have closest access to

information about TBT of the EU. The State should implement policies to

encourage Embassy to provide and update information about changes in import

policies as well as technical standards and regulations applied to Vietnam exports,

in general and leather footwear products, in particular. In addition, Embassy and

Commercial Services should improve competency as representatives for Vietnam

exporters in settling trade disputes in the EU.

Expected benefits: Leather footwear export enterprises can benefit from

official sources of information and direct consultation in Vietnamese from the

governmental agencies with easy access, especially for SMEs, which will help them

prepare well for the procedure of complying with technical regulations and

adjusting systems to meet required standards.

3.4.1.6. Implementing policies to support human resources development

Importance of recommendation: The Government should support the

sector to improve the lack of specialized training centers to serve the need of

enhancing human resource quality, which is a critical factor in the process of

improving competency to overcome technical barriers of the EU.

Execution

Firstly, the Government should establish national training centers

specializing at Leather and Footwear. Ministry of Education and Training (MOET)

and LEFASO should coordinate with School of Textile, Leather Footwear and

Fashion of Hanoi University of Science and Technology (in the North) and Ho Chi

Minh City Industry and Trade College of MOIT (in the South) to make plans for the

establishment of two training centers in the first stage, one in the North and one in

the South. The functions of the center should be:

- Providing tertiary education and training in footwear technology, tanning

technology and designing.

- Providing professional courses in technology, management, designing,

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marketing, etc. for managers, technicians and officers.

- Providing courses tailored to the needs of enterprises.

Secondly, the Government should support funds from state budget to partly

cover expenses for LEFASO, Leather and Shoe Research Institute and School of

Textile, Leather Footwear and Fashion of Hanoi University of Science and

Technology to build national curriculum for all training centers. The State should

also support funds for building education and research infrastructure for the centers.

Thirdly, MOIT and MOET should promote international cooperation in

training, facilitate inviting foreign experts and encourage collaboration of the

training centers with leather and footwear institutes of countries with developed

leather footwear industry like EU, US, Japan or Korea.

Expected benefits: The sector will benefit from available high quality

training programs for improving human resources in all positions of the companies,

which can optimize the effectiveness of upgrading production and management

system for meeting standards and regulations of export markets.

3.4.1.7. Setting up quality standard systems according to international

standards and developing certification bodies

Importance of recommendation: Building a quality infrastructure

comprising standardization, testing, inspection, certification and accreditation is

complex, time-consuming and expensive. However, it is a critical element for

facilitating the procedure of overcoming technical barriers, which is worth the

investment in the long run.

Execution

Firstly, The Government needs to implement the building and developing of

Vietnam Standards (TCVN) with the central role of Vietnam Standard and Quality

Institute (VSQI) of Directorate for Standards, Metrology and Quality, Ministry of

Science and Technology in coordination with Ministry of Natural Resources and

Environment (MNRE) and Vietnam Chemicals Agencies of MOIT. In details:

- The Government should further invest in research activities and training of

VSQI experts and specialists about international standards and experience of EU

countries in building standards with the consultation of EU experts.

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- Mechanisms can be developed at national level to obtain the views of

LEFASO and leather footwear sector and involve them in building standards. It is

imperative to take their specific needs into account when standards are elaborated.

- After obtaining expertise of international standards, VSQI, with

consideration of actual conditions of Vietnam leather footwear industry, can carry

out research and analysis to build and apply a system of standards that are

compatible with international standards and suitable with domestic production. In

the process, MNRE is in charge of providing advice on building environmental

standards and regulations. Vietnam Chemicals Agency of MOIT will take part in

revising chemicals standards and regulations.

Secondly, the Government needs to take measures to sponsor and encourage

Vietnam leather footwear businesses to starting the conformity with new standards.

In details, VSQI, with the assistance of LEFASO, should actively disseminate

information about the system of standards for companies to fully understand. In

addition, there should be policies of short-term supports enterprises when

encountering difficulties and troubles with these new standards.

Thirdly, the Government should focus on perfecting regulatory system in the

field of labor and environment. It is critical to strengthen the enforcement of

environmental regulations to stimulate the application of international EMS.

Fourthly, the Government should create incentives to encourage private

sector to provide conformity assessment services such as testing, inspection and

certification. Bureau of Accreditation should actively communicate the high

demand of inspection services for exports to the EU to potential investors in order

to stimulate the investment of private sectors and foreign investors in building

certification bodies in Vietnam. In addition, the Government should provide funds

and support LEFASO to set up a national standards body to provide testing,

calibration and inspection services that specialize at leather footwear products.

Expected benefits: Enforcing stronger standards according to standards of

key export markets will not only increase the focus of companies on conformity to

international standards, including standards of the EU but also stimulate them to

invest in quality and environmental innovations. Developing domestic labs and

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certification bodies that are qualified to provide conformity assessment services for

EU technical barriers will save time and cost of using similar services abroad.

3.4.2. Recommendations for LEFASO

3.4.2.1. Supporting enterprises to improve and control quality of materials

Importance of recommendation: In regards of heavy dependence on

imported materials from numerous sources and inferior quality of domestic

materials, LEFASO should take effective measures to support control and improve

quality of raw materials to ensure that quality and safety of materials can overcome

stringent assessment procedure for EU technical regulations, especially REACH.

Execution

Firstly, LEFASO should provide consultation for export enterprises in the

selection process of suppliers for raw materials in order to ensure they can be used

to manufacture finished products conforming to required standards in quality and

safety of EU importers and reduce potential risks of non-compliance.

- LEFASO can help enterprises to find stable and reliable sources that can

supply high-quality materials to meet standards of the EU. By conducting

research on quality standards of the EU market and common specifications from

EU importers, LEFASO can set up a comprehensive database of foreign suppliers

that can satisfy those requirements. As a member of Asian International Footwear

Association (AIFA) with established relationship with leather footwear

associations of several countries, LEFASO can ask for recommendation of

qualified suppliers from countries that are members of AIFA like Korea, Japan,

Hong Kong, Taiwan, Thailand, etc. LEFASO can also search for potential

suppliers by attending foreign trade fairs of leather and auxiliary materials for

footwear or from trade press and directories. The database should comprise of

contact information of suppliers, product range and specifications, price range

and sales policy to meet diversified demand of Vietnam producers.

- LEFASO should open an active helpdesk, both online and offline, to

respond to requests for advice of choosing suppliers from its members.

Companies can provide LEFASO with input information about criteria of quality,

safety, chemical components, price, reliability and location. LEFASO then

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matches requirements of each exporter with the supplier database in order to

advise the optimal buying solution.

Secondly, LEFASO can represent several small and medium leather

footwear enterprises to carry out group buying in large quantity from prestigious

sources. Importers can benefit from discount policy, reduced transaction and

transportation cost as well as consistency and reliability of materials.

Thirdly, besides policies to develop tanning industry of the Government,

LEFASO should play the role of introducing footwear producers to qualified

domestics sources. That would gradually reduce dependence on material imports for

greater control in production of Vietnam companies. Some measures include:

- Assisting tanneries in preparing an official directory listing the names of

tanneries with contact details, production capacity, product specifications and a

complete product catalogue mentioning details of tanneries’ current product

specifications, some specific knowledge on material issues.

- Organizing regular meetings and seminars to bridge the information gap

between tanneries and leather footwear producers.

- Inviting finished leather experts and experienced designers to educate

tanneries and producers on methods to select proper material and determine specific

finished leather for specific types of footwear and parts of footwear.

Expected benefits: LEFASO’s expertise knowledge of technical standards

and regulations of the EU and wide network of relationships will enhance the

effectiveness of exporters in choosing reliable suppliers of raw materials, ensuring

not only the choice of the best suppliers that can satisfy technical standards of the

EU but also cost reductions and time saving. Introduction of LEFASO to domestic

sources will increase long-term independence in production of Vietnam exporters.

3.4.2.2. Orienting and supporting export enterprises to modernize technology

Importance of recommendation: Low technological level of leather

footwear sector results in limitation of Vietnam producers’ capability to

manufacture products that can meet high standards of the EU and is a major

weakness in QMS and EMS of Vietnam companies. Therefore, support of LEFASO

to modernize technology is critical.

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Execution

Firstly, LEFASO also needs to strengthen its role in orienting and supporting

technology upgradation of leather footwear enterprises. LEFASO should conduct

research on current technological level of the sector and modern technology with

the capabilities to manufacture leather footwear that meets standards of the EU and

other main export markets. As a member of AIFA, LEFASO should actively learn

from experience of other countries like Korea, Japan or Hong Kong on choosing

technology to produce for exports to the EU. LEFASO can also invite experts from

the EU to consult them about technology that can conform to EU standards.

LEFASO can thereby provide advisory for companies in selecting appropriate

technology. With expertise in the field and wide network of relations, LEFASO can

bridge the information gap by introducing machinery and equipment suppliers with

appropriate specifications, good quality and reasonable price to producers.

Secondly, LEFASO can connect companies with similar need of importing

machinery to conduct group buying in order for them to benefit from discount

policy, reduced transaction and transportation cost.

Thirdly, LEFASO in cooperation with Leather and Shoes Research Institute

should conduct more researches with high applicability in leather production,

leather chemicals, genuine-leather processing technology, performance tests, as well

as environmental management and pollutant treatment.

Expected benefits: With the consultation and support of LEFASO,

enterprises can make the optimal choice of appropriate machinery with reasonable

cost when conduct the upgradation of technology for improving the ability to

overcome technical standards. In addition, research activities of LEFASO will

contribute to promote the use of domestic technology in the long run, which

improve the overall technological of the industry.

3.4.2.3 Supporting export enterprises with information about technical

barriers

Importance of recommendation: With the role of a focal point of

information, LEFASO should increase the effectiveness in providing specialized

information channel about technical barriers to leather footwear enterprises.

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Execution

Firstly, LEFASO should provide detailed system of information and

knowledge about technical regulations and standards specialized at leather

footwear, as well as a practical guidance to meet these requirements edited by

experts of LEFASO through the portal: www.lefaso.org.vn. That system should

categorize and evaluate clearly the necessity and importance of each type of

certificate. In addition, the website should frequently update articles sharing views

and experience of members about the procedure to overcome technical barriers.

Secondly, LEFASO should make a newsletter providing on-time and tracking

reports about changes in technical barriers applied to leather footwear. The

newsletter should be sent via email to all company members of LEFASO as an

effective early warning tool.

Thirdly, LEFASO should establish an active helpdesk to provide consultation

on import regulations and technical barriers to Vietnam leather footwear exporters.

Since this helpdesk specializes at leather footwear with professional consultants in

the industry, it can provide exporters with required information and

recommendations faster than TBT enquiry points.

Expected benefits: A specialized information channel provided by LEFASO

experts obtain understanding of technical barriers will help leather footwear

exporters save time and searching efforts as well as gain a clearer view of the

actions they should take to prepare and cope with the compliance procedure.

3.4.2.4. Supporting enterprises to improve the quality of human resources

Importance of recommendation: LEFASO should take measures to

improve competency of labor force in the sector to overcome current weaknesses

that are hindering the ability to meet technical standards and regulations of the EU.

Execution

Firstly, LEFASO should cooperate with Leather and Shoe Research Institute

and School of Textile, Leather Footwear and Fashion of Hanoi University of

Science and Technology to build a complete curriculum with training module for all

stages of the value chain (designing – production – sales and exports) for all

training centers and companies.

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Secondly, LEFASO should provide consultation for training centers to bring

the subject that researches key export markets, including the EU, into teaching

curriculum so that human resources of the industry can obtain thorough

understanding of production technology, technical standards and regulations as well

as requirements about quality, safety and design of the EU. LEFASO should also

provide frequent professional courses with similar topics for companies.

Thirdly, LEFASO should enhance the role of being focal point connecting

enterprises and training centers. LEFASO should encourage training centers to

actively collect information about demands and specific requirements from

enterprises and communicate the benefits of their training programs to companies.

Expected benefits: Training programs will directly improve quality of labor

force in accordance with actual demand of companies, especially the need of

training human resources in all levels for upgrading, managing and operating

effectively production system to meet standards and regulations of the EU.

3.4.2.5. Supporting the development of standards and laboratories

Importance of recommendation: Having to send products abroad for

inspection due to lack of certified domestic labs is a deterrent. Vietnam companies

commonly prioritize to follow national standards before international standards,

which hinders the conformity in quality of products with standards of export

markets like the EU. Therefore, LEFASO need to implement measures to improve

these weaknesses.

Execution

Firstly, LEFASO should play the consultative and managerial role in the

project by the Government to establish a national certification bodies for leather and

footwear products. LEFASO, VSQI and Bureau of Accreditation should provide

joint consultation for the installation of necessary facilities in accordance with

requirements of the EU so that the laboratory would be accredited to provide

inspection and certification services for technical standards and regulations of the

EU like REACH and eco-label. LEFASO should also support the project with

human resources by suggesting experts to be supervisors of the building progress.

Secondly, after the laboratories starts to operate, LEFASO should take

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responsibility of two functions as following:

- Managing and supervising the conduct of experiments to create chemicals

and chemical treatment techniques that are friendly to the environment, cost

effective and highly applicable to the production of leather footwear products.

- Ensuring the following of Good Laboratory Practice and continuing to

expand inspection capacity of the lab by conducting research on requirements of

other standards of key export markets that leather footwear exporters are in need of

and implementing the development of the lab to satisfy that demand.

Expected benefits: Leather footwear exporters will benefit from lower fee

than private or oversea inspection services. Waiting time for certification is

shortened thanks to high capacity and specialization in leather footwear of the lab.

3.4.2.6. Building connections between leather footwear exporters with each

other, LEFASO and foreign partners

Importance of recommendation: LEFASO needs to take initiatives to

develop linkages between leather footwear exporters to the EU in order to improve

the current lack of connections between exporters. In addition, LEFASO should

support exporters to build and foster relations with EU importers, offering another

channel to facilitate export opportunities.

Execution

Firstly, LEFASO should build an internal online forum as a common

platform for its members to share information and experience that they have

obtained in the procedure of exporting to the EU and other key markets. To enhance

connections, the communication process between exporters with each other and

with LEFASO must be improved through the development of communication

mechanisms, and a forum is one of the places where they can both share and receive

information as well as can not only express their demands but also benefit from

immediate support. In details:

- The forum should be categorized into boxes specific markets such as EU,

US, Asia and Middle West. Exporters to EU can share experience and request for

information support from other members in the EU category.

- The forum should facilitate mutual learning between members by

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encouraging them to share about difficulties that they have confronted in the

process of overcoming EU technical barriers, measures they have taken, the

effectiveness and outcome of those measures and lessons they have obtained should

be encouraged. Forum administrators can then collect information into articles for

more convenient reference.

- In the forum, experts from larger enterprises can point out weaknesses and

deficiency in the system of production and trade promotion of SMEs that hinder the

ability to overcome technical barriers and they can discuss to find solutions.

Secondly, LEFASO should organize periodic seminars and conferences as

well as comprehensive training with topics of common interest for leather and

footwear companies. These events can create chances for business networking, so

that exporters can directly share information and experience about exporting and

overcoming technical barriers as well as establish relationships to support each

other in export process. Regularly exchanging of information between exporters and

LEFASO in these events can help LEFASO capture complex situation arises to

remove difficulties for exporters. In these events, LEFASO can organize group

counseling for building business linkages between large enterprises and SMEs by a

series of peer group sessions. Thanks to that, SMEs can be provided with

consultation from large companies and large companies to seize this chance to find

potential satellite companies in order to support their production.

Thirdly, LEAFSO should establish and develop international relationship

through activities such as hosting and taking part in industry seminars, conferences,

forums and dialogs. In international events hosted in Vietnam, Vietnam companies

can connect with potential EU importers to seize export opportunities and gain

experience on measures to meet EU standards and regulations. As a member of

AIFA, LEFASO needs to make full use of the valuable opportunity learn and

accumulate experience to overcome technical barriers from leather footwear

associations of other countries. In addition, LEASO should take initiatives to build

and strengthen relationships with current and potential importers in the EU.

LEFASO can approach and fully utilize their complete and updated information on

technical barriers to enhance quality of advisory for Vietnam exporters.

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Expected benefits: Building and strengthening linkages between Vietnam

leather footwear exporters with each other and LEFASO will create a cooperative

environment in the industry. It enables mutual learning and sharing of members

about information and experience in overcoming technical barriers, collaboration in

taking measures to enhance system for compliance with technical standards and

regulations such as purchasing materials or modernizing technology. Building

international connections will help Vietnam exporters benefit from export

opportunities and updated information.

3.4.3. Recommendations for leather footwear export enterprises

3.4.3.1. Improving and controlling quality of input materials

Importance of recommendation: Leather footwear producers should

control and improve quality of raw materials to ensure that quality and safety of

materials meet EU standards, which will increase the possibility of finished

products to overcome conformity assessment procedure by certification bodies.

Execution

Firstly, Vietnam producers should only import raw materials from

prestigious sources after careful analysis of supplier’s reliability, stability, sales

policy and most importantly, ability to supply materials that satisfy EU

requirements of quality and chemical usage. Companies should actively research

and gather information about supply market by the support of LEFASO, from trade

press or exhibitions of leather.

Secondly, to prepare for compliance with REACH, in purchase contracts,

Vietnam producers should clearly identify the responsibility of suppliers in

providing data of chemicals and their safe use, in details, by listing all chemical

substances, substances to be released from materials and SVHCs. In addition,

Vietnam producers should demand suppliers to provide additional data in due time

during the process of controlling content of chemicals in production of footwear.

Thirdly, Vietnam companies should create a Product DNA by establishing a

database of quality specifications, chemical substances and their usage in leather

footwear products. In order to control chemicals in products, Vietnam producers

need to obtain information about chemical substances included in raw materials

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from suppliers. Vietnam producers can then validate that Product DNA against all

requirements, from technical regulations of the EU market to specific requirements

of EU customers. That preparation will help Vietnam producers save time and

effort in providing information for EU importers to build safety data sheets in order

to demonstrate compliance with REACH, which is a part of regulatory procedure

required by ECHA. A time saving and cost-effective suggestion to manage and

analyze data is using software specifically designed to manage data of chemicals. In

details, the company-wide practice should be:

- Procurement department needs to request information of chemical

substances in raw materials from suppliers. Managing compliance is like shooting a

moving target since specific requirements and other regulations such as frequently

updated SVHCs Candidate list of REACH. The best solution is to collect, whenever

possible, full disclosure material information of raw materials.

- Production lines then manufacture finished products with materials that

comply with mandatory standards, regulations and customer-specific requirements.

- Quality Assurance is responsible for validating collected data from

Procurement, and generating database of chemicals and compliance reports.

Expected benefits: Using materials that do not meet EU standards, for

example, materials that contain substances in RSL list of REACH, will certainly

lead to the failure of leather footwear products in meeting technical standards.

Therefore, choosing prestigious suppliers, checking quality and safety carefully

before importing and obtaining full information about chemical substances in

materials will increase the conformity of finished products to EU standards and

prepare Vietnam exporters for the procedure of providing quality and chemical

usage data to demonstrate compliance.

3.4.3.2. Increasing technological level

Importance of recommendation: Outdated technology reduces production

capability and the ability to meet standards and regulations of the EU. Therefore,

increasing technological level is essential to enhance the ability of overcoming

technical barriers.

Execution

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Firstly, enterprises should carry out careful and detailed analysis by taking

into consideration advisory from LEFASO to avoid the case when companies buy

and install production line that is modern but not appropriate with requirements of

technical standards set by the EU. Companies should prioritize to replace current

mechanical equipment by automation technology.

Secondly, companies can connect with each other to import new machinery

together by group buying to save transaction and transportation costs.

Thirdly, companies should actively obtain information about new

environmental-friendly and cost-effective chemicals that can be used in production

and conduct experiments to check the effectiveness of those chemicals.

Expected benefits: Vietnam leather footwear companies can make an

appropriate choice of technology to optimize production capacity in order to

manufacture products that meet standards of the EU, ensure conformity of

production system with EU regulations and improve quality management system.

3.4.3.3. Actively obtain information about EU technical barriers

Importance of recommendation: Getting detailed information about

technical barriers is the first step in preparing to comply with technical standards

and regulations of the EU.

Execution

Firstly, export enterprises should make full use of available information

channels to actively learn about standards, regulations and technical specifications

of the EU. Suggested channels include TBT online network (www.tbtvn.org), local

TBT enquiry points, LEFASO (www.lefaso.org.vn), EC (ec.europa.eu), Center for

Promotion of Imports from developing countries (www.cbi.eu).

Secondly, companies should invite experts from LEFASO and TBT Vietnam

Office to organize trainings for workers, officers and managers about technical

standards and regulations of the EU applied to leather footwear. In addition,

enterprises should actively participate in forums and seminars organized by

agencies to exchange information about technical barriers with other exporters.

Thirdly, exporters should maintain and foster linkages with EU partners from

previous trade relations by providing good after-sales customer service. Building

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firm connections with EU companies help Vietnam businesses approach quick

access with information about changes in technical standards and regulations of the

EU as well as instruction to comply with conformity assessment procedure.

Expected benefits: Gaining a good understanding of technical barriers will

enable enterprises to be clear about required procedure and make decision on

suitable solution of revising systems. Early preparation enhances the ability to

overcome technical barriers.

3.4.3.4. Improving the quality of human resources

Importance of recommendation: These measures help leather footwear to

solve two current problems that are lack of labor and inadequate competence of

labor force, which are hindrances to the ability of overcoming technical barriers.

Execution

Firstly, businesses should establish a separate division with the

responsibility of collecting and updating information as well as tackle arising

problems relating to technical barriers including new regulations, standards and

conformity assessment procedure. This division is obliged to communicate that

information to relating divisions of the company such as purchasing, production,

quality control and assurance; providing knowledge about technical regulations

they must follow and giving instruction and consultation for compliance.

Secondly, companies should provide funds for managers, engineers,

technicians, and designers to take professional courses at national training centers,

improve quality of on-the-job training for unskilled labor and invite experts of

LEFASO to provide short courses about the EU market and their requirements.

Thirdly, Vietnam leather footwear companies should carry out detailed

analysis of their specific needs of training for human resources and communicate

that demand to training centers. Thereby, training centers can have practical

information to adjust and upgrade their curriculum to meet the needs of enterprise.

Fourthly, companies should consider improving wage incentives to attract

unskilled labors. Companies can move factories in charge of sewing phase to rural

areas to take advantage of idle labor working in agriculture.

Expected benefits: These recommendations can help leather footwear

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companies attract more unskilled workers and improve their skills in production;

enhance the capability of managers, engineers and designers to manage and upgrade

production system effectively for adherence to EU standards.

3.4.3.5. Developing laboratories and the use of international standards

Importance of recommendation: A big majority of leather footwear

companies does not have their own laboratories, making it difficult to control the

compliance of products. Following outdated national standards can hinder the

ability to meet EU standards. Measures should be taken to solve these problems.

Execution

Firstly, businesses should determine a system of technical standards that are

close to requirements of the EU to follow. Currently, technical standard system of

Vietnam is outdated, comparing that of the EU. Therefore, when the government,

LEFASO and VSQI are reconstructing this system, leather footwear exporters

should proactively upgrade their own system to quickly meet standards of the EU in

order for the quality and safety of their products to be recognized by the EU.

Secondly, companies should invest in building their own laboratories.

Starting with small-scale lab can be a suitable option to their financial position. The

function of the lab is to test chemical content of raw materials and products during

and after production to control their conformity with EU standards.

Expected benefits: Following international standards in production ensures

that quality of leather footwear products is up to requirements of the EU.

Laboratories of each company facilitate the process of controlling compliance of

products with EU technical standards and regulations, which reduce potential risks.

SUMMARY OF CHAPTER 3

This final chapter provides information and analysis of trends of leather

footwear consumption in the EU market and trends of application of technical

barriers to leather footwear exported to the EU as well as basic orientations and

goals of Vietnam government to overcome these barriers. From the weaknesses

mentioned in chapter 2, recommendations for Vietnam government, LEFASO and

leather footwear companies are provided to help the sector enhance its ability to

overcome technical barriers of the EU market.

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80

CONCLUSION

Pursuing a development strategy aimed at promoting both quantitative and

qualitative growth, the Vietnamese leather and footwear sector continues to

maintain the position as one of the top leather footwear exporters in the world and

second largest exporters to the EU market. Leather footwear also maintained the

third place in leading group of commodities of Vietnam exported to the EU with

stable growth rate and achievement of more than 2 billion USD turnover each year

from 2007 to 2013. This steady development can be partly attributed to the efforts

that Vietnam Government, LEFASO and leather footwear enterprises to comply

with complicated and strict technical barriers of the EU in order to satisfy the needs

of this difficult market.

By conducting research on technical barriers to Vietnam leather footwear

export to the EU market, this thesis analyzes some critical issues in the current

situation and from there, indicates strengths as well as weaknesses of Vietnam

leather footwear sector. Although there is certain success in overcoming technical

barriers to maintain and develop exports to the EU market, there are still numerous

difficulties and challenges with regard to increasing complication of regulations and

limited capability of Vietnam leather footwear sector. Weaknesses of Vietnam

leather footwear in the process of overcoming technical barriers include heavy

dependence on imported materials, weak development of supporting industries,

outdated technology, lack of infrastructure and connections between enterprises as

well as limited quality of human resources.

Besides, based on observation and analysis in general comments, author also

provides some recommendations for Vietnamese government, association and

exporters to overcome those technical barriers. In order to successfully overcome

technical barriers for Vietnam leather footwear exported to the EU market, it

requires prompt actions for guiding and orientation from Vietnamese government

and LEFASO as well as determination and effective measures of leather footwear

businesses. As a result, it will enhance the ability of Vietnam leather footwear to

overcome technical barriers of the EU, and thereby increase export activities and

create foundation for sustainable development.

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81

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ANNEX 1

DECISION NO. 6209/QĐ-BCT OF MINISTRY OF INDUSTRY AND TRADE

ON THE APPROVAL OF THE PLAN TO DEVELOP VIETNAM LEATHER

AND FOOTWEAR INDUSTRY TO 2020, VISION 2025

BỘ CÔNG THƢƠNG

CỘNG HÒA XÃ HỘI CHỦ NGHĨA VIỆT NAM

Độc lập - Tự do - Hạnh phúc

Số: 6209/QĐ-BCT Hà Nội, ngày 25 tháng 11 năm 2010

QUYẾT ĐỊNH

Phê duyệt Quy hoạch tổng thể phát triển ngành Da – Giầy Việt Nam

đến năm 2020, tầm nhìn đến năm 2025

BỘ TRƢỞNG BỘ CÔNG THƢƠNG

Căn cứ Nghị định số 189/2007/NĐ-CP ngày 27 tháng 12 năm 2007 của

Chính phủ quy định chức năng, nhiệm vụ, quyền hạn và cơ cấu tổ chức của Bộ

Công thương;

Căn cứ Nghị định số 92/2006/NĐ-CP ngày 07 tháng 9 năm 2006 của Chính

phủ về lập, phê duyệt và quản lý qui hoạch tổng thể phát triển kinh tế - xã hội và

Nghị định số 04/2008/NĐ-CP ngày 11 tháng 01 năm 2008 của Chính phủ sửa đổi

bổ sung một số điều của Nghị định số 92/2006/NĐ-CP;

Theo đề nghị của Vụ trưởng Vụ Công nghiệp nhẹ,

QUYẾT ĐỊNH

Điều 1. Phê duyệt Quy hoạch tổng thể phát triển ngành Da – Giầy Việt Nam

đến năm 2020, tầm nhìn đến năm 2025 với những nội dung cơ bản như sau:

1. Quan điểm và Định hƣớng phát triển

a) Phát triển ngành Da – Giầy Việt Nam phù hợp với quy hoạch tổng thể

phát triển kinh tế - xã hội và quy hoạch phát triển công nghiệp cả nước, quy hoạch

phát triển kinh tế - xã hội các địa phương và lộ trình hội nhập quốc tế của Việt

Nam;

b) Huy động các thành phần kinh tế, các nguồn lực trong nước và thu hút đầu

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89

tư nước ngoài để xây dựng và phát triển ngành Da – Giầy Việt Nam theo hướng chủ

động phục vụ xuất khẩu và tiêu dùng nội địa, tăng thu ngoại tệ cho đất nước, tăng

việc làm, tăng thu nhập đi đôi với cải thiện đời sống người lao động;

c) Phát triển mạnh sản xuất nguyên phụ liệu và công nghiệp hỗ trợ ngành Da

– Giầy nhằm giảm nhập siêu, nâng cao giá trị gia tăng, tham gia sâu vào chuỗi giá

trị gia tăng của thị trường sản phẩm Da – Giầy thế giới;

d) Phát triển ngành Da – Giầy Việt Nam nhanh, ổn định và bền vững theo

hướng chuyên môn hóa, hiện đại hóa, ứng dụng công nghệ mới hiện đại với thiết bị

tiên tiến, thân thiện với môi trường nhằm tạo ra năng suất lao động và hiệu quả kinh

tế cao, chủ động hội nhập kinh tế với khu vực và thế giới, từng bước chuyển đổi

phương thức sản xuất từ gia công sang tự sản xuất, kinh doanh;

e) Gắn việc phát triển nhanh qui mô sản xuất với việc tập trung mở rộng thị

trường xuất khẩu và thị trường nội địa, nghiên cứu ứng dụng khoa học công nghệ và

phát triển nguồn nhân lực được đào tạo trong đó quan tâm đặc biệt đối với lao động

nghèo, lao động nông nghiệp đang thực hiện chuyển dịch cơ cấu kinh tế từ nông

nghiệp sang công nghiệp. Gắn việc phát triển sản xuất trên cơ sở thực hiện tốt trách

nhiệm xã hội, thân thiện và bảo vệ môi trường. Chuyển dịch các cơ sở gia công mũ

giầy về các vùng nông thôn, vùng có nhiều lao động;

g) Nâng cao năng lực tự thiết kế mẫu mã và phát triển sản phẩm mới, ưu tiên

ứng dụng công nghệ tự động hóa trong thực hiện công nghệ và tổ chức quản lý sản

xuất;

2. Mục tiêu phát triển

a) Mục tiêu tổng quát

Xây dựng ngành Da – Giầy Việt Nam đến năm 2020 thành một ngành công

nghiệp xuất khẩu mũi nhọn quan trọng của nền kinh tế quốc dân. Tiếp tục giữ vị trí

trong nhóm các nước sản xuất và xuất khẩu các sản phẩm Da – Giầy hàng đầu thế

giới. Tạo thêm nhiều việc làm cho xã hội trên cơ sở thu nhập của người lao động

ngày càng được nâng cao, thực hiện trách nhiệm xã hội ngày càng tốt, số lượng lao

động được qua đào tạo ngày càng tăng.

b) Mục tiêu cụ thể

- Tốc độ tăng trưởng giá trị sản xuất công nghiệp ngành Da – Giầy giai đoạn

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2011 – 2015 đạt 9,4%/năm; giai đoạn 2016 – 2020 đạt 8,8%/năm; giai đoạn 2020 –

2025 đạt 8,2%/năm;

- Phấn đấu đạt kim ngạch xuất khẩu năm 2015 là 9,1 tỷ USD; năm 2020 là

14,5 tỷ USD và năm 2025 đạt 21 tỷ USD. Tốc độ tăng trưởng kim ngạch xuất khẩu

bình quân trong giai đoạn 2011 – 2015 là 10,9%/năm; giai đoạn 2016 – 2020 là

9,7%/năm và giai đoạn 2021 – 2025 là 7,6%/năm;

- Nâng dần tỷ lệ nội địa hóa các loại sản phẩm. Phấn đấu năm 2015 tỷ lệ nội

địa hóa đạt 60-65%, năm 2020 đạt 75-80% và năm 2025 đạt 80-85%;

- Cùng với ngành Dệt May và một số ngành liên quan làm trụ cột phát triển

công nghiệp Thời trang Việt Nam tại một số đô thị, thành phố lớn;

- Xây dựng một số khu – cụm công nghiệp sản xuất Da – Giầy, sản xuất

nguyên phụ liệu và xử lý môi trường tập trung trên cơ sở lợi thế về hạ tầng và lao

động để chủ động cung cấp nguyên phụ liệu, nâng cao năng lực cạnh tranh cho

ngành;

- Xây dựng mới và phát triển các cơ sở đào tạo, các cơ sở nghiên cứu khoa

học công nghệ, các trung tâm kiểm định, dịch vụ ngành và các trung tâm Xúc tiến

thương mại, trung tâm Thời trang ở trong nước và nước ngoài.

3. Định hƣớng Quy hoạch phát triển

a) Quy hoạch sản phẩm chiến lược

- Giầy dép là sản phẩm chủ lực của ngành trong đó giầy thể thao và giầy vải

được ưu tiên hàng đầu trong sản xuất và xuất khẩu;

- Sản xuất giầy dép da thời trang và cặp túi ví chất lượng cao phục vụ thị

trường mới, thị trường cao cấp và thị trường nội địa.

- Tập trung sản xuất da thuộc với công nghệ tiên tiến, thân thiện với môi

trường phục vụ chiến lược sản xuất giầy dép da thời trang, cặp túi ví có chất lượng

cao để phục vụ xuất khẩu và thị trường nội địa. Đầu tư sản xuất da thuộc gắn liền

với việc phát triển đàn gia súc góp phần giảm nhập siêu và chủ động trong sản xuất.

- Sản lượng sản phẩm và tốc độ tăng trưởng sản phẩm bình quân đến năm

2020 như sau:

TT Chỉ tiêu Đơn vị tính 2015 2020

1 Tổng giầy dép các loại Triệu đôi 1.172 1.698

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2 Cặp – túi – ví các loại Triệu cái 170 285

3 Da thuộc

- Da thuộc cứng 1.000 tấn 39 63

- Da thuộc mềm (bia 30x30) Triệu bia 197 277

Tăng trƣởng bình quân 2011 - 2015 2016 – 2020

1 Tổng giày dép các loại %/năm 9,0 7,7

2 Cặp – túi – ví các loại %/năm 13,0 12,0

3 Da thuộc

- Da thuộc cứng %/năm 15,0 10,0

- Da thuộc mềm %/năm 10,0 7,0

b) Quy hoạch theo vùng lãnh thổ

Quy hoạch các trung tâm phát triển và bố trí năng lực sản xuất theo vùng

lãnh thổ được dựa trên lợi thế về nhân lực, về nguồn cung cấp nguyên phụ liệu, giao

thông, cảng biển theo hướng: duy trì và phát triển các trung tâm Da – Giầy hiện có

tại các đô thị và thành phố lớn thành các trung tâm thương mại, thiết kế mẫu mốt,

dịch vụ công nghệ có giá trị gia tăng cao; di dời các các cơ sở sản xuất đặc biệt là

các cơ sở may gia công mũ giầy về các vùng lân cận, các vùng nông thôn có nhiều

lao động.

Bố trí sản xuất và đầu tư của ngành Da – Giầy trên toàn quốc được xác định

thành 4 vùng chủ yếu như sau:

Vùng 1: Vùng đồng bằng sông Hồng

Qui hoạch theo định hướng lấy thành phố Hà Nội làm trung tâm dịch vụ,

cung cấp nguyên phụ liệu, công nghệ, mẫu mốt, các cơ sở sản xuất các sản phẩm

giầy dép, cặp túi ví có giá trị cao, qui mô hợp lý và các trung tâm xúc tiến thương

mại chuyên ngành.

Các doanh nghiệp sản xuất gia công sẽ được phát triển hoặc di dời về các

tỉnh như: Hải Dương, Bắc Ninh, các khu vực lân cận thành phố Hải Phòng, Phố Nối

(Hưng Yên), Đồng Văn (Hà Nam), Nam Định, Hà Nội mở rộng, Phú Thọ và Vĩnh

Phú. Tại khu vực này sẽ hình thành khu – cụm sản xuất và kinh doanh mua bán

nguyên phụ liệu và công nghiệp phụ trợ, cụm công nghiệp nhỏ và làng nghề truyền

thống. Phát triển trung tâm đào tạo và trung tâm nghiên cứu khoa học và ứng dụng,

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chuyển giao công nghệ.

Vùng 2: Vùng Đông Nam Bộ

Qui hoạch theo định hướng lấy thành phố Hồ Chí Minh làm trung tâm dịch

vụ, cung cấp nguyên phụ liệu, công nghệ, mẫu mốt, các cơ sở sản xuất các sản

phẩm có giá trị cao, qui mô hợp lý và các trung tâm xúc tiến thương mại chuyên

ngành, xây dựng các cụm công nghiệp nhỏ và làng nghề truyền thống tại các quận

ven thành phố. Di dời các cơ sở thuộc da tại trung tâm và lân cận thành phố đến các

khu thuộc da tập trung cách xa thành phố và khu vực đông dân cư.

Các cơ sở sản xuất giầy dép và cặp túi ví sẽ được phát triển hoặc di dời về

các tỉnh như: Bình Dương, Đồng Nai, Tây Ninh. Tại khu vực này sẽ hình thành khu

– cụm sản xuất và kinh doanh mua bán nguyên phụ liệu và công nghiệp phụ trợ.

Vùng 3: Vùng Bắc Trung Bộ và Duyên hải miền Trung

Qui hoạch theo định hướng lấy thành phố Đà Nẵng làm trung tâm để hình

thành cụm công nghiệp gia công và sản xuất giầy dép, cặp túi ví lớn.

Các cơ sở may mũ giầy, sản xuất giầy dép, cặp túi ví và sản phẩm Da – Giầy

được chế biến từ da cá sấu và da đà điểu sẽ được phát triển tại các tỉnh như: Bình

Định, Đà Nẵng, Quảng Nam, Khánh Hòa.

Vùng 4: Vùng đồng bằng sông Cửu Long

Qui hoạch lấy thành phố Cần Thơ làm trung tâm. Khuyến khích các doanh

nghiệp phát triển mở rộng gia công sản xuất giầy dép và thiết lập với các doanh

nghiệp Da – Giầy trong khu vực do có lợi thế về nguồn lao động và các hỗ trợ ưu

đãi dành cho khu vực tiếp nhận chuyển dịch cơ cấu kinh tế.

Chú trọng phát triển sản phẩm da thuộc, giầy dép, cặp túi ví được chế biến từ

da cá sấu và da trăn. Đây là thế mạnh của vùng trong những năm gần đây do phát

triển được vùng chăn nuôi động vật có da nốt sần lớn nhất tại Việt Nam.

4. Nhu cầu vốn đầu tƣ phát triển ngành Da – Giầy

- Tổng nhu cầu vốn đầu tư toàn ngành giai đoạn 2011-2015 là 28.340 tỷ

đồng. Trong đó:

+ Huy động trong nước : 12.340 tỉ đồng, chiếm 44%;

+ Kêu gọi đầu tư nước ngoài: 835 triệu USD, chiếm 56%.

- Tổng nhu cầu vốn đầu tư toàn ngành giai đoạn 2016-2020 là 31.230 tỷ

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đồng. Trong đó:

+ Huy động trong nước: 13.124 tỷ đồng, chiếm 42% tổng vốn đầu tư;

+ Kêu gọi vốn đầu tư nước ngoài: 944 triệu USD, chiếm 58% tổng vốn.

- Tổng nhu cầu vốn đầu tư toàn ngành giai đoạn 2011-2020 là 59.570 tỷ

đồng. Trong đó:

+ Huy động trong nước: 43%

+ Kêu gọi đầu tư nước ngoài: 57%.

(Chi tiết xem Phụ lục số 2 kèm theo Quyết định này).

Điều 2. Tổ chức thực hiện

1. Bộ Công thương chủ trì, phối hợp với các Bộ, ngành liên quan và Ủy ban

nhân dân các tỉnh, thành phố trực thuộc Trung ương chỉ đạo phát triển ngành theo

Quy hoạch này và chịu trách nhiệm công bố công khai Quy hoạch;

2. Các Bộ: Kế hoạch và Đầu tư; Tài chính; Nông nghiệp và Phát triển nông

thôn; Khoa học và Công nghệ; Tài nguyên và Môi trường; Giáo dục và Đào tạo;

Ngân hàng Nhà nước Việt Nam; Ngân hàng Phát triển Việt Nam theo chức năng

của mình phối hợp với Bộ Công Thương để hỗ trợ các doanh nghiệp, các địa

phương trong việc triển khai thực hiện Quy hoạch và các đề án đã được phê duyệt.

3. Ủy ban nhân dân tỉnh, thành phố trực thuộc Trung ương cụ thể hóa Quy

hoạch tổng thể phát triển ngành Da - Giầy trên địa bàn tỉnh, thành phố; tham gia với

các Bộ, ngành giám sát việc triển khai thực hiện Quy hoạch để đảm bảo tính đồng

bộ, thống nhất với Quy hoạch tổng thể phát triển kinh tế - xã hội của địa phương.

4. Hiệp hội Da - Giầy Việt Nam phối hợp với Bộ Công thương tuyên truyền,

phổ biến Quy hoạch tổng thể phát triển ngành Da - Giầy cho cộng đồng các doanh

nghiệp ngành Da - Giầy cả nước để có định hướng và kế hoạch phát triển sản xuất

kinh doanh phù hợp với Quy hoạch. Tổng hợp ý kiến và kiến nghị của các doanh

nghiệp với cơ quan có thẩm quyền để điều chỉnh quy hoạch cho phù hợp với tình

hình thực tế.

Điều 3. Quyết định này có hiệu lực kể từ ngày ký.

Điều 4. Các Bộ trưởng, Thủ trưởng cơ quan ngang Bộ, Thủ trưởng cơ quan

thuộc Chính phủ, Chủ tịch Ủy ban nhân dân tỉnh, thành phố trực thuộc Trung ương

và các cơ quan có liên quan chịu trách nhiệm thi hành Quyết định này./.

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ANNEX 2

LIST OF VIETNAM LEATHER FOOTWEAR EXPORTERS DID SURVEY

No. Leather footwear exporters

1 HAO DUONG LEATHER CO.,LTD

2 DONG HUNG INDUSTRIAL JOINT STOCK COMPANY

3 HUNG HUY CO.,LTD

4 DAE WOONG VINA CO., LTD

5 LIEN PHAT CO., LTD

6 AN THINH FOOTWEAR PRODUCING AND TRADING CO., LTD

7 BINH DINH SHOES JOINT STOCK COMPANY

8 HUNG YEN SHOES JOINT STOCK COMPANY

9 VINH THONG MANUFACTURING- TRADING- SERVICES

CO.,LTD

10 GIA DINH SHOES COMPANY

11 CASUM SHOES JOINT STOCK COMPANY

12 ASIA SHOES PTE

13 AN LAC SHOES JOINT STOCK COMPANY

14 HAI PHONG LEATHER PRODUCTS AND FOOTWEAR ONE

MEMBER CO.,LTD

15 DONG PHUONG DONG NAI VIETNAM CO., LTD

16 LAC CUONG SHOES COMPANY

17 DOBA PRODUCING - TRADING FOOTWEAR CO., LTD

18 DAI VIET SHOES COMPANY

19 CHANG YANG VIETNAM CO.,LTD

20 LE GIA SHOES CO., LTD

21 KHAI HOAN FOOTWEAR PRODUCTION JOINT STOCK

COMPANY

22 HOANG LAN SHOES PRODUCING CO.,LTD

23 NAM BINH CO., LTD

24 HISON VINA CO., LTD

25 VINH NGHIA SHOES CO., LTD

26 THAI BINH SHOES JSC.

27 NAM CUONG SHOES CO.,LTD

28 UY VIET PRODUCING SHOES CO., LTD

29 DONG ANH SHOES JOINT STOCK COMPANY

30 MINH DUC CO.,LTD

31 PHUONG QUYNH FOOTWEAR COMPANY

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32 POUSUNG VIETNAM CO.,LTD

33 VINH PHU SHOES JOINT STOCK COMPANY

34 EIZO SHOES VIETNAM CO.,LTD

35 HONG WON CO., LTD

36 VIET PHAT SHOES CO., LTD

37 HANOI SHOES JOINT STOCK COMPANY

38 HOANG THANG LEATHER COMPANY

39 THUY KHUE SHOES CO., LTD

40 HUNG GIA PHUC SHOES JOINT STOCK COMPANY

41 TAN HOP FOOTWEAR CO., LTD

42 PHU LAM SHOES JOINT STOCK COMPANY

43 THAI DUONG SHOES CO., LTD

44 PHUOC BINH SHOES CO., LTD

45 SAI GON LEATHER PRODUCTS AND FOOTWEAR IMPORT-

EXPORT COMPANY

46 THANG LONG SHOES JOINT STOCK COMPANY

47 AN GIANG SHOES ONE MEMBER CO.,LTD

48 TAN THANH SHOES CO.,LTD

49 32 JOINT STOCK COMPANY

50 THONG DUNG SHOES CO.,LTD

51 SAGODA LEATHER AND SHOES JOINT STOCK COMAPNY

52 TRENCILO VIETNAM CO.,LTD

53 LADODA JOINT STOCK COMPANY

54 VINH HOI FOOTWEAR CO., LTD

55 THUONG DINH FOOTWEAR COMPANY

56 SAO VIET JOINT STOCK COMPANY

57 TICH HANH FOOTWEAR CO., LTD

58 VINH NGHIA SHOES CO., LTD

59 CAM BINH SHOES JOINT STOCK COMPANY

60 TUAN VIET SHOES COMPANY

61 TRIEU PHONG SHOE CO., LTD

62 TADO SHOES CO.,LTD

63 HUNG DAT JOINT STOCK COMPANY

64 A AU SHOES CO., LTD

65 DONA STANDARD VIETNAM SHOES CO., LTD

66 THIEN PHAT SHOES CO.,LTD

67 NGOC HA SHOES COMPANY

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ANNEX 3

QUESTIONAIRE

Kính chào Quý Doanh nghiệp!

Trong khuôn khổ chương trình nghiên cứu đề tài "RÀO CẢN KĨ THUẬT ĐỐI VỚI

MẶT HÀNG DA GIÀY VIỆT NAM XUẤT KHẨU SANG THỊ TRƯỜNG LIÊN

MINH CHÂU ÂU", chúng tôi muốn thu thập một số dữ kiện liên quan đến hoạt

động thực tiễn của doanh nghiệp. Các thông tin được cung cấp sẽ được bảo vệ trong

phạm vi cuộc khảo sát, chỉ phục vụ cho việc nghiên cứu đề tài nói trên, hoàn toàn

không ràng buộc về mặt pháp lý.

Tác giả đề tài xin chân thành cảm ơn Quý Doanh nghiệp đã dành thời gian trả lời

bảng câu hỏi này. Kính chúc Quý Doanh nghiệp không ngừng mở rộng hoạt động

sản xuất kinh doanh, tạo được vị thế mới trong điều kiện cạnh tranh và hội nhập

quốc tế hiện nay.

Xin vui lòng điền vào chỗ trống hoặc khoanh tròn lựa chọn phù hợp.

1. Thông tin chung về doanh nghiệp

a. Tên Việt Nam:

b. Tên quốc tế (nếu có):

c. Địa chỉ:

d. Số điện thoại:

e. Số fax:

f. Địa chỉ website (nếu có):

2. Doanh nghiệp đã có xuất khẩu da giày vào thị trƣờng Châu Âu chƣa?

a. Có

b. Chưa

(Nếu chưa, dừng trả lời khảo sát ở câu 2. Nếu có, xin tiếp tục trả lời từ câu 3)

3. Doanh nghiệp có xuất hàng trực tiếp sang EU hay chỉ gia công theo đơn

đặt hàng?

a. Có xuất hàng trực tiếp

b. Chỉ gia công theo đơn đặt hàng

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4. Doanh nghiệp đánh giá nhƣ thế nào về qui trình kiểm soát hàm lƣợng

hoá chất của doanh nghiệp?

a. 5: Rất tốt

b. 4: Tốt

c. 3: Trung bình

d. 2: Chưa tốt

e. 1: Hoàn toàn không tốt

5. Doanh nghiệp có phòng thí nghiệm riêng không?

a. Có b. Không

6. Doanh thu từ thị trƣờng Châu Âu của doanh nghiệp anh chị trong năm

2008 có giảm so với năm 2007 không?

a. Có b. Không

Nếu có thì theo anh chị nguyên nhân có phải do REACH không?

a. Có b. Không

7. Doanh thu từ thị trƣờng Châu Âu của doanh nghiệp anh chị trong năm

2009 có giảm so với năm 2008 không?

a. Có b. Không

Nếu có thì theo anh chị nguyên nhân có phải do REACH không?

a. Có b. Không

8. Doanh thu từ thị trƣờng Châu Âu của doanh nghiệp anh chị trong năm

2010 có giảm so với năm 2009 không?

a. Có b. Không

Nếu có thì theo anh chị nguyên nhân có phải do REACH không?

a. Có b. Không

9. Doanh thu từ thị trƣờng Châu Âu của doanh nghiệp anh chị

trong năm 2011 có giảm so với năm 2010 không?

a. Có b. Không

Nếu có thì theo anh chị nguyên nhân có phải do REACH không?

a. Có b. Không

10. Doanh thu từ thị trƣờng Châu Âu của doanh nghiệp anh chị

trong năm 2012 có giảm so với năm 2011 không?

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98

a. Có b. Không

Nếu có thì theo anh chị nguyên nhân có phải do REACH không?

a. Có b. Không

11. Doanh thu từ thị trƣờng Châu Âu của doanh nghiệp anh chị

trong năm 2013 có giảm so với năm 2012 không?

a. Có b. Không

Nếu có thì theo anh chị nguyên nhân có phải do REACH không?

a. Có b. Không

12. Doanh nghiệp đánh giá nhƣ thế nào về hiệu quả thực hiện việc dán nhãn

hàng hoá khi xuất khẩu sang EU của mình từ năm 2007 đến năm 2013?

a. 5: Rất tốt

b. 4: Tốt

c. 3: Trung bình

d. 2: Chưa tốt

e. 1: Hoàn toàn không tốt

13. Tình hình thực hiện hệ thống quản lí chất lƣợng ISO 9001 cùa doanh

nghiệp

a. Đã được cấp giấy chứng nhận

b. Đang thực hiện tiêu chuẩn để xin cấp giấy chứng nhận

c. Chưa thực hiện tiêu chuẩn

14. Tình hình thực hiện hệ thống quản lí môi trƣờng ISO 14001 của doanh

nghiệp

a. Đã được cấp giấy chứng nhận

b. Đang thực hiện tiêu chuẩn để xin cấp giấy chứng nhận

c. Chưa thực hiện tiêu chuẩn

15. Doanh nghiệp đánh giá nhƣ thế nào về tầm quan trọng của các yếu tố/

hoạt động sau đâu đối với việc vƣợt các rào cản kĩ thuật đối với mặt

hàng da giày xuất khẩu của thị trƣờng Liên Minh Châu Âu?

(5: Rất quan trọng, 4: Quan trọng, 3: Bình thường, 2: Không quan trọng lắm,

1: Hoàn toàn không quan trọng)

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99

Tiêu chí 5 4 3 2 1

Chất lượng nguồn nguyên liệu đầu

vào

Công nghệ sản xuất

Chất lượng nguồn nhân lực

Phòng thí nghiệm kiểm định chất

lượng riêng của doanh nghiệp

16. Trong thời gian qua, doanh nghiệp đánh giá mức độ quan tâm đầu tƣ

của mình nhƣ thế nào đến các vấn đề sau trong hoạt động xuất khẩu da

giày và vƣợt rào cản kĩ thuật của thị trƣờng EU?

(5: Rất quan tâm và đầu tư đáng kể, 4: Có quan tâm nhưng chưa đầu tư đáng

kể, 3: Có quan tâm nhưng chưa đầu tư, 2: Không quan tâm lắm, 1: Hoàn toàn

không quan tâm)

Tiêu chí 5 4 3 2 1

Chất lượng nguồn nguyên liệu đầu

vào

Công nghệ sản xuất

Chất lượng nguồn nhân lực

Phòng thí nghiệm kiểm định chất

lượng riêng của doanh nghiệp

17. Doanh nghiệp đánh giá nhƣ thế nào về thực trạng của các vấn đề sau?

(5: Rất tốt, 4: Tốt, 3: Bình thường, 2: Chưa tốt, 1: Hoàn toàn không tốt)

Tiêu chí 5 4 3 2 1

Sự liên kết của các doanh nghiệp

trong ngành

Sự hỗ trợ về vốn của nhà nước

Sự hỗ trợ về thông tin của Nhà

nước và LEFASO

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100

ANNEX 4

SURVEY RESULT

1. Số doanh nghiệp xuất khẩu da giày trả lời khảo sát: 67

2. Tình trạng xuất khẩu da giày sang Châu Âu của doanh nghiệp

Số lượng doanh nghiệp Tỷ trọng (%)

Đã xuất khẩu sang EU 51 76.12

Chưa xuất khẩu sang EU 16 23.88

3. Doanh nghiệp có xuất hàng trực tiếp sang EU hay chỉ gia công theo đơn đặt

hàng

Số lượng

doanh nghiệp

Tỷ trọng (%)

Có xuất hàng trực tiếp 23 45.10

Chỉ gia công theo đơn đặt hàng 28 54.90

4. Đánh giá của 51 doanh nghiệp xuất khẩu sang EU về quy trình kiểm soát

hàm lượng hóa chất của doanh nghiệp:

(5: Rất tốt, 4: Tốt, 3: Bình thường, 2: Chưa tốt, 1: Hoàn toàn không tốt)

N Min Max Mean Std. Deviation

51 2 5 3.098 0.109

5. Doanh nghiệp có phòng thí nghiệm riêng không?

Số doanh nghiệp Tỷ trọng (%)

Có 15 29.41

Không 36 70.59

6. Tình hình doanh thu từ EU và tác động của REACH đến doanh thu của 51

doanh nghiệp có xuất khẩu sang EU:

Số doanh

nghiệp

Số doanh nghiệp cho rằng

REACH góp phần làm giảm

doanh thu

Tỷ trọng

(%)

Doanh nghiệp có

doanh thu năm 2008

giảm so với năm 2007

5 5 100

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101

Số doanh

nghiệp

Số doanh nghiệp cho rằng

REACH góp phần làm giảm

doanh thu

Tỷ trọng

(%)

Doanh nghiệp có

doanh thu năm 2009

giảm so với năm 2008

37 31 86.49

Doanh nghiệp có

doanh thu năm 2010

giảm so với năm 2009

12 9 75

Doanh nghiệp có

doanh thu năm 2011

giảm so với năm 2010

10 7 70

Doanh nghiệp có

doanh thu năm 2012

giảm so với năm 2011

13 10 61.54

Doanh nghiệp có

doanh thu năm 2013

giảm so với năm 2012

9 5 55.56

7. Đánh giá của 51 doanh nghiệp xuất khẩu sang Châu Âu về như thế nào về

hiệu quả thực hiện việc dán nhãn hàng hoá khi xuất khẩu sang EU của mình

từ năm 2008 đến năm 2013:

(5: Rất tốt, 4: Tốt, 3: Trung bình, 2: Chưa tốt, 1: Hoàn toàn không tốt)

N Min Max Mean Std. Deviation

51 3 5 3.921 0.092

8. Tình hình thực hiện ISO 9001 của 51 doanh nghiệp xuất khẩu sang Châu Âu:

Số doanh nghiệp Tỷ trọng (%)

Đã được cấp giấy chứng nhận 19 37.26

Đang thực hiện tiêu chuẩn để xin

cấp giấy chứng nhận

26 50.98

Chưa thực hiện tiêu chuẩn 6 11.76

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102

9. Tình hình thực hiện ISO 14001 của 51 doanh nghiệp xuất khẩu sang Châu

Âu:

Số doanh nghiệp Tỷ trọng (%)

Đã được cấp giấy chứng nhận 5 9.8

Đang thực hiện tiêu chuẩn để xin

cấp giấy chứng nhận

15 29.42

Chưa thực hiện tiêu chuẩn 31 60.78

10. Đánh giá của 51 doanh nghiệp có xuất khẩu sang EU tầm quan trọng của các

yếu tố/ hoạt động sau đâu đối với việc vượt các rào cản kĩ thuật đối với mặt

hàng da giày xuất khẩu của thị trường Liên Minh Châu Âu

(5: Rất quan trọng, 4: Quan trọng, 3: Bình thường, 2: Không quan trọng lắm,

1: Hoàn toàn không quan trọng)

N Min Max Mean Std.

Deviation

Chất lượng nguồn nguyên liệu

đầu vào

51 3 5 4.294 0.090

Công nghệ sản xuất 51 4 5 4.372 0.068

Chất lượng nguồn nhân lực 51 3 5 4.078 0.092

Phòng thí nghiệm kiểm định

chất lượng của doanh nghiệp

51 3 5 3.804 0.109

11. Đánh giá của 51 doanh nghiệp có xuất khẩu sang EU về mức độ quan tâm

đầu tư của doanh nghiệp đến các yếu tố/ hoạt động trong hoặt động vượt các

rào cản kĩ thuật đối với mặt hàng da giày xuất khẩu của thị trường Liên Minh

Châu Âu: (5: Rất quan tâm và đầu tư đáng kể, 4: Có quan tâm nhưng chưa

đầu tư đáng kể, 3: Có quan tâm nhưng chưa đầu tư, 2: Không quan tâm lắm,

1: Hoàn toàn không quan tâm)

N Min Max Mean Std.

Deviation

Chất lượng nguồn nguyên liệu

đầu vào

51 3 5 4.295 0.090

Công nghệ sản xuất 51 2 5 3.367 0.091

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103

N Min Max Mean Std.

Deviation

Chất lượng nguồn nhân lực 51 4 5 4.235 0.060

Phòng thí nghiệm kiểm định

chất lượng của doanh nghiệp

51 2 5 3.725 0.132

12. Đánh giá của 51 doanh nghiệp có xuất khẩu sang EU về thực trạng của các

vấn đề sau

(5: Rất tốt, 4: Tốt, 3: Bình thường, 2: Chưa tốt, 1: Hoàn toàn không tốt)

N Min Max Mean Std.

Deviation

Sự liên kết của các doanh

nghiệp trong ngành

51 2 4 2.764 0.082

Sự hỗ trợ về vốn của nhà nước 51 1 4 2.471 0.090

Sự hỗ trợ về thông tin của nhà

nước và LEFASO

51 2 4 2.862 0.079