HCM CITY — Global footwear brands like Adidas, Nike and Puma are increasingly turning to Việt Nam for their manufacturing needs due to its affordable labour costs and free trade agreements.

Kasper Rorsted, general director of Adidas, said that Việt Nam produced 44 per cent of its output in 2017, while China, which used to be its biggest manufacturer, only made 19 per cent.

The German company expects that production will continue to shift from China to Việt Nam, and that Việt Nam will produce more than half of Adidas footwear by the end of 2019.

According to a source from Nike, the company began investing more in Việt Nam around five to seven years ago due to the reasonable labour cost and now accounts for almost half of Việt Nam’s total footwear exports.

For Puma, the company also has 30 per cent of its products made in Việt Nam, and plans to do more business here if the US hikes taxes on Chinese footwear and clothing.

Nguyễn Đức Thuấn, chairman of the Việt Nam Leather, Footwear and Handbag Association (LEFASO), said many multi-national footwear and clothing companies are making their products in this country because of the affordable labour costs and Việt Nam’s free trade agreements with many countries.

Though labour costs have been rising over the years, it is still cheaper than some other big shoes markers like China, India and Thailand. The experienced workforce which has been working with multinational brands also makes Việt Nam an attractive location for big footwear brands.

According to LEFASO, Việt Nam exported around US$14.67 billion worth of footwear last year, ranking second in the world.

It exported to over 100 countries.

In the first four months of this year, the industry’s exports were worth $4.5 billion, and the full-year target is $20 billion.

More than 80 per cent of exports are by foreign-invested companies.

More are expected to come, further boosting exports. — VNS