VIETNAM LEATHER AND FOOTWEAR INDUSTRY REPORT Q1/2018

Transcription

1 VIETNAM LEATHER AND FOOTWEAR INDUSTRY REPORT Q1/2018

2 Contents Executive summary 5 1. Business environment Import export Macroeconomic situation Price movements Legal framework Some typical countries Free trade agreements Footwear industry Overview of Global Leather and Footwear Industry Raw materials Value chain of Leather and Footwear Industry Production Production Methods Consumption Leather industry Import export Raw materials Footwear prices Production Some typical countries Consumption Some famous brandname 50 2

3 Contents 3 Overview of Vietnam Leather- Footwear industry Export History of Establishment and Development Import Industry Scale and Features Footwear prices Leather industry Inventory Raw materials Distribution channels Production Consumption Some other leather products Export Machinery/Technology Import Risks and Threats Inventory Industry Planning Footwear industry Driving Forces and Forecasts Raw materials Enterprise Analysis Production 68 Appendix Consumption 70 3

4 Abbreviation MOIT Ministry of Industry and Trade Lefaso Vietnam Leather, Footwear and Handbag Association MARD Ministry of Agriculture and Rural Development GDVC General Department of Vietnam Customs CBI Centre for the Promotion of Import from developing countries GSO General Statistics Office of Vietnam CICB Centre for the Brazilian Tanning Industry UN Comtrade United Nations Commodity Trade Statistics Database FAO Food and Agriculture Organization of the United Nations USITC United States International Trade Commission FED Federal Reserve System VIRAC Vietnam Industry Research and Consultant IMF International Monetary Fund World Footwear 4

5 Executive summary The global tanning industry is characterized by small and medium sized family businesses. In recent years, the global consumption growth has been negligible for cowhide and decreased 2%/year for sheep and goat skins. Latin America is expected to continue to be the most important net exporter of bovine leathers. European intra-regional trade is the largest component of the international footwear trade, accounting for almost one third of world exports. The world's average export price of footwear has increased steadily over the years, The most prominent issues of the Vietnamese tanning industry are raw materials, environmental issues, production technology and human resources. The Far East continues to be the largest net importer of cow leather. 5

6 Executive summary. Leather and footwear manufacturing is a key industry of Vietnam, Import value of footwear in the years of Vietnam was recorded at a low level of just under USD 100 million. Inventory tended to decrease in 2016 and

7 Contents 1. Business environment 1.1 Macroeconomic situation 1.2 Legal framework 1.3 Free trade agreements 7

8 1. Business environment 1.1 Macroeconomic situation GDP growth rate, Monthly CPI fluctuations, GDP growth in 2017 reached 6.81%, Source: VIRAC, GSO Source: VIRAC, GSO Consumer price index (CPI) in 2017 has a lot of changes. Causes leading to GDP growth in 2017: According to the General Statistics Office, there were 8/11 groups of goods and services having CPI increase in December compared with the previous month 8

9 1. Business environment 1.1 Macroeconomic situation Total disposable income and household expenditure, f USD billion Increasing disposable income is a positive factor in boosting the domestic footwear and handbags industry. Source: VIRAC, Economist Intelligence Unit Million people Average population and population growth, Source: VIRAC, GSO 9

10 1. Business environment 1.1 Macroeconomic situation USD million Export and import turnover, Q1/2015 Q4/2017 Source: VIRAC, GDVC Export structure by commodity category, 2017 Vietnam's import and export in 2017 still heavily depends on FDI inflows. Source: VIRAC, GDVC 10

11 1. Business environment 1.1 Macroeconomic situation VND/USD exchange rate, The movement of exchange rate in 2017 was quite bleak, VND/USD exchange rate did not have many fluatuations Source: VIRAC summarized FDI attraction by sectors, 2017 In 2017, foreign investors have invested in 19 industries, Source: VIRAC, FIA 11

12 1. Business environment 1.1 Macroeconomic situation The effect of related industries VND trillion Retail sales in Vietnam, The market share of modern retail in total retail revenue, 2014 Source: VIRAC, GSO Source: VIRAC, GSO 12

13 1. Business environment 1.1 Macroeconomic situation Consumer confidence index CCI Consumer confidence index in Vietnam remained stable at a high level in Q3/2017, with 116 points (down 1 point from Q2/2017). Content is intentionally Source: VIRAC summarized removed for demo purpose 13

14 Contents 1. Business environment 1.1 Macroeconomic situation 1.2 Legal framework 1.3 Free trade agreements 14

15 1. Business Environment 1.2 Legal Framework Regulations on export-import: Legal documents related to leather quarantine Document Date Ministry/Department Content Source: VIRAC summarized 15

16 1. Business environment 1.2 Legal framework 16

17 1. Business environment 1.2 Legal framework Regulations on production: 17

18 Contents 1. Business environment 1.1 Macroeconomic situation 1.2 Legal framework 1.3 Free trade agreements 18

19 1. Business environment 1.3 Free trade agreements - TPP By the end of 2017, Vietnam has signed, implemented and has been negotiating a total of 16 FTAs. Vietnam s accession to international trade agreements brings both opportunities and challenges for domestic firms. Vietnam's integration process since 1995 to date

20 1. Business environment 1.3 Free trade agreements CPTPP TPP is a free trade agreement among 12 countries with the purpose of economic integration in the region of Asia Pacific. 20

21 1. Business Environment 1.3 Trade Agreements- TPP Tax reduction Current leather footwear import taxes of some countries Products Country MNF taxes Source: VIRAC, Lefaso The Agreement is expected to come into effect in 2018 Rules of Origin 21

22 1. Business Environment 1.3 Trade Agreements - TPP Tax reduction schedule for footwear products and footwear materials of Vietnam Products Current taxes Tax reduction schedule Source: VIRAC, MOIT 22

23 1. Business Environment 1.3 Trade Agreements - TPP 23

24 1. Business Environment 1.3 Trade Agreements - FTA Vietnam EU Free Trade Agreement Some regulations of EVFTA and GSP Category GSP EVFTA Source: VIRAC summarized 24

25 1. Business Environment 1.3 Trade Agreements - FTA Technical barriers in the EU market Some regulations of the EU with imported leather footwear products Leather products Footwear Source: VIRAC summarized 25

26 1. Business Environment 1.3 Trade Agreements ASEAN Economic Community (AEC) Tariff reductions and technical barriers Impact Assessment 26

27 Contents 2. Overview of global leather and footwear Industry 2.1 Value chain of Leather and Footwear Industry 2.2 Production Methods 2.3 Leather industry 2.4 Footwear industry 27

28 2. Overview of global leather and footwear Industry 2.1 Value chain of Leather and Footwear Industry 28

29 2. Overview of global leather and footwear Industry 2.1 Value chain of Leather and Footwear Industry Designing Manufacturing Retailing 29

30 Contents 2. Overview of global leather and footwear Industry 2.1 Value chain of Leather and Footwear Industry 2.2 Production Methods 2.3 Leather industry 2.4 Footwear industry 30

31 2. Overview of global leather and footwear Industry 2.2 Production Methods OBM OEM/FOB ODM Source: VIRAC 31

32 Contents 2. Overview of global leather and footwear Industry 2.1 Value chain of Leather and Footwear Industry 2.2 Production Methods 2.3 Leather industry 2.4 Footwear industry 32

33 2. Overview of global leather and footwear industry 2.3 Leather industry Raw materials Head Number of cow, buffalo, sheep, goat and other animals providing soft leather, e 95% of the world's leather material comes mainly from the food industry and is directly affected by meat and milk demand. Source: VIRAC, FAO Thousand pieces Cowhide, buffalo hides, sheepskin and goat skin, e Source: VIRAC, FAO 33

34 2. Overview of global leather and footwear Industry 2.3 Leather industry Production Leather production, Thousand tons India and Brazil have abundant developing tanning industry. sources of raw materials and have Source: VIRAC, FAO South Africa's leather industry has long been one of the strongest growing regions in Africa. 34

35 2. Overview of global leather and footwear Industry 2.3 Leather industry Leather consumption Million square feet Leather consumption, Leather consumption structure by products, 2013 Source: VIRAC, FAO Source: VIRAC 35

36 2. Overview of global leather and footwear Industry 2.3 Leather industry Leather import-export USD billion Export of raw hides and tanned hides, Leather export structure by type, 2016 *HS 41 Source: VIRAC, UN comtrade Source: VIRAC, UN comtrade Top importing exporting countries HS 41, 2016e Country Export in 2016 Import in 2016 Value (USD billion) Country Value (USD billion) Source: VIRAC, UN comtrade 36

37 2. Overview of global leather and footwear Industry 2.3 Leather industry Leather price movements Rawhide price fluctuations in the US, 1/2012-6/2017 USD/ton Source: VIRAC, FED, IMF 37

38 2. Overview of Global Leather and Footwear Industry 2.3 The Leather Industry Typical countries India Bangladesh Brazil Ethiopia Pakistan Italia 38

39 Contents 2. Overview of global leather and footwear Industry 2.1 Value chain of Leather and Footwear Industry 2.2 Production Methods 2.3 Leather industry 2.4 Footwear industry 39

40 2. Overview of global leather and footwear Industry 2.4 Footwear industry Raw materials Annually, imports and exports of raw materials remain at USD 6-7 billion with uneven growth. USD billion Footwear material import, e Top importers of footwear materials, 2016e Source: VIRAC, Trademap Most of the top 2016 importing countries are the largest exporters of footwear. Source: VIRAC, Trademap 40

41 2. Overview of global leather and footwear Industry 2.4 Footwear industry Footwear production According to World Footwear data, total global footwear production maintained at 23 billion pairs in the last two years after an average growth of 5% from 2010 to Billion pairs Global footwear output, Top 10 footwear producers 2016 Source: VIRAC, World Footwear Footwear production structure by region, 2016 No Country Share Volume Source: VIRAC, World Footwear Source: VIRAC, World Footwear 41

42 2. Overview of global leather and footwear Industry 2.4 Footwear industry Footwear consumption Billion pairs Global footwear consumption, Source: VIRAC, World Footwear Market share of consumption by region, 2016 Top 10 footwear consuming countries, (Million pairs) No Country Source: VIRAC, Worl Footwear Source: VIRAC, World Footwear 42

43 2. Overview of global leather and footwear Industry 2.4 Footwear industry Footwear import-export Source: VIRAC, World Footwear 43

44 2. Overview of global leather and footwear Industry 2.4 Footwear industry Footwear import-export Export USD billion Footwear exports, e No Top 10 footwear exporting countries by value, 2016 Country Value (USD thousand) Source: VIRAC, World Footwear, Trademap Share (%) Growth rate compared to 2015 Source: VIRAC, World Footwear, Trademap 44

45 2. Overview of global leather and footwear Industry 2.4 Footwear industry Footwear import-export - Import Market share (import value) by region, 2016 Source: VIRAC, Trademap Top 10 footwear importing countries by value, 2016 No Country Value Share Source: VIRAC, Trademap 45

46 2. Overview of global leather and footwear Industry 2.4 Footwear industry Footwear prices The movement of average global footwear export price, Source: VIRAC, World Footwear CPI of footwear in urban areas of the world, 1/ /2017 Source: VIRAC, The Bureau of Labor Statistics 46

47 2. Overview of global leather and footwear Industry 2.4 Footwear industry Some typical countries China - Exporting shoes more than any other country 47

48 2. Overview of global leather and footwear Industry 2.4 Footwear industry Some typical countries The US - The world's largest footwear importing country USD billion Footwear import-export in the US, Source: VIRAC, Trademap 48

49 2. Overview of global leather and footwear Industry 2.4 Footwear industry Some typical countries EU - The world's largest shoes importing region Footwear import-export in EU, USD billion Source: VIRAC, Trademap 49

50 2. Overview of global leather and footwear Industry 2.4 Footwear industry Some famous shoe brand names # 1: Nike # 2: Adidas # 3: Converse # 4: Reebok # 5: Vans 50

51 2. Overview of global leather and footwear Industry 2.4 Footwear industry Some famous shoe brand names # 6: Puma SE # 7: Steve Madden # 8: Dr. Martens # 9: Aldo # 10: New Balance 51

52 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 52

53 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 53

54 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 54

55 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 55

56 3. Overview of Vietnam's Leather and Footwear Industry 3.2 Industry Scale and Feature General information about the leather and footwear industry of Vietnam Category Value Source: VIRAC, GSO, GDVC 56

57 3. Overview of Vietnam's Leather and Footwear Industry 3.2 Industry Scale and Feature Localization ratio by enterprises and sectors (%) 57

58 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 58

59 3. Overview of Vietnam Leather- Footwear industry 3.3 Leather industry Leather materials NThe major factors of the Vietnam tanning industry include raw material sources, environment, production technology and human resources. The number of buffalo, cow, goat and other animals supplying soft leather Head Source: VIRAC, FAO Thousand pieces Unprocessed hides, Thousand tons Source: VIRAC, FAO 59

60 3. Overview of Vietnam Leather- Footwear industry 3.3 Leather industry Leather production and consumption Total output of leather products, e Million m² The fact is that there are no new businesses expanding, new investment in leather production due to many difficulties: * Excluding synthetic leather Source: VIRAC, GSO 60

61 3. Overview of Vietnam Leather- Footwear industry 3.3 Leather industry Leather import Leather imports, e USD million Source: VIRAC, UN Comtrade, Lefaso Leather import structure by country, 2017e Source: VIRAC, Lefaso 61

62 3. Overview of Vietnam Leather- Footwear industry 3.3 Leather industry Leather export USD million Leather exports, e Leather export structure by country, 2016e Source: VIRAC, UN Comtrade Source: VIRAC, Trademap 62

63 3. Overview of Vietnam Leather- Footwear industry 3.3 Leather industry Inventory Thousand tons Leather inventory by type, e Source: VIRAC, GSO 63

64 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 64

65 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Raw materials USD million Import of textile and leather footwear materials, e Source: VIRAC, GDVC Imports of textile and garment materials, leather and footwear have increased steadily over the years with a CAGR of 10.94% in the period e 65

66 3. Overview of Vietnam's Leather and Footwear Industry 3.4 Footwear Industry Raw Materials Import structure (value) of raw materials by country, 2015 Source: VIRAC, Lefaso Materials supply capacity, 2015 Import structure of textile and garment materials, footwear by country, 2017e Raw materials Capacity/Demand Source: VIRAC, Lefaso Source: VIRAC, GDVC 66

67 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Raw materials The reasons of shortage of raw materials are: Export of textile and leather footwear materials, e USD million Source: VIRAC, GDVC Export structure of textile and leather footwear materials, 2017e Source: VIRAC, GDVC 67

68 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear production Number of enterprises by region, 2015 Source: VIRAC 68

69 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear production The growth rate of footwear production has fallen sharply since 2016e, Million pairs Output of main products, e Source: VIRAC, GSO 69

70 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear consumption Vietnam is in the top four largest footwear producers in the world in terms of quantity, Million pairs Domestic footwear consumption, e Source: VIRAC, World Footwear VND trillion Retail sales of footwear, e The domestic market with more than 90 million people is a great potential for leather and footwear industry, especially under the faster growth of the economy and the strong development of online shopping in Vietnam. Source: VIRAC 70

71 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear consumption Sneakers sales increased sharply in 2017, VND billion Sneakers retail sales, e Source: VIRAC Sales of some major sneakers, 2017e Source: VIRAC 71

72 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear consumption Women's footwear consumption accounts for the largest share of the market in terms of value. Women's footwear continued to grow rapidly in Consumption struction by value, 2017e Source: VIRAC Consumer structure by shoe spending per month, 2013 Source: VIRAC, Lefaso 72

73 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear consumption Structure of footwear consumption, 2014 Competitive comparison between Vietnamese and Chinese products Vietnam China Source: VIRAC, VITIC Source: VIRAC 73

74 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear consumption Footwear consumption segments in Vietnam Source: VIRAC 74

75 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear consumption Consumption trends: 75

76 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear export USD million Footwear exports, e Source: VIRAC, GDVC 76

77 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear export Footwear exports by country, e USD million Vietnam's footwear exports have increased in most markets, especially China, Germany and the United States. Source: VIRAC, GDVC 77

78 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear export Contribution structure of enterprises in leather - footwear export, e Typical footwear exporting enterprises, 2017 No FDI Vietnam Source: VIRAC, Lefaso Source: VIRAC, GDVC 78

79 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear export Top major importing markets of EU-28, Unit: EUR million Top major importing markets of the US, Source: VIRAC, Eurostat Unit: USD million Source: VIRAC, UN Comtrade 79

80 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear export Export value by HS code Unit: USD million Export price by HS code in some countries Unit: USD Source: VIRAC, Lefaso Source: VIRAC, Lefaso 80

81 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear import Footwear imports, e USD million Source: VIRAC, UN Comtrade Footwear import structure by country, 2016e Source: VIRAC, UN Comtrade 81

82 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Footwear prices Average footwear export price, 2014 Price of some major footwear types in Vietnam, 2012 Source: VIRAC, World Footwear Source: VIRAC, World Footwear 82

83 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Inventory Thousand pairs Inventory, e Source: VIRAC, GSO Footwear inventory accounts for about 2% of total annual production. 83

84 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Distribution channels Distribution system specialized in shoe items: Non-specialized distribution system Source: VIRAC, Lefaso 84

85 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Distribution channels Importers/Wholesalers Agents Suppliers/Shopping malls Shopping malls are divided into 2 types: 85

86 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Distribution channels Retailers specializing in shoe items Footwear stores Non-specilized stores Sportwear retailers Supermarkets, markets and discount stores 86

87 3. Overview of Vietnam Leather- Footwear industry 3.4 Footwear industry Distribution channels Market stalls / markets and factory outlets Online shopping / home delivery 87

88 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 88

89 3. Overview of Vietnam's Leather and Footwear Industry 3.5 Some other leather products Products are related products: handbag, suitcase, bag USD Million Export of bags, suitcases, wallets, etc e Source: VIRAC, GDVC Export structure by enterprise, e Source: VIRAC, GDVC 89

90 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 90

91 3. Overview of Vietnam Leather- Footwear industry 3.6 Machinery/Technology Besides the difficulties in raw materials, Vietnam also has difficulties in terms of technology when machinery of leather and footwear has just stopped at medium level. USD million Machinery imports, e Machinery import structure, 2017e Source: VIRAC, Lefaso Source: VIRAC, UN Comtrade, Lefaso 91

92 3. Overview of Vietnam's Leather and Footwear Industry 3.6 Machinery Technology - Tanning Tanning technology in Vietnam Tanning technology in Europe Traditional technology Cleaner technology Traditional technology New technology Saving Source: VIRAC Source: VIRAC 92

93 3. Overview of Vietnam Leather- Footwear industry 3.6 Machinery/Technology- Footwear production Manual and semi-automatic manufacturing That automatic Robots are used by the big shoe brands is a threat to Vietnam. 93

94 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 94

95 3. Overview of Vietnam Leather- Footwear industry 3.7 Risks and Threats Economic integration risks Legal risks 95

96 3. Overview of Vietnam Leather- Footwear industry 3.7 Risks and Threats Economic risks Labour risks Raw material risks 96

97 3. Overview of Vietnam Leather- Footwear industry 3.7 Risks and Threats Competive risks Difficulties in grasping the domestic market Risks from industrial revolution

98 3. Overview of Vietnam Leather- Footwear industry 3.7 Risks and Threats Strengths Weaknesses Opportunities Threats 98

99 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 99

100 3. Overview of Vietnam Leather- Footwear industry 3.8 Industry Planning General purposes of the industry Source: VIRAC summarized Development purposes 100

101 3. Overview of Vietnam Leather- Footwear industry 3.8 Industry Planning Strategic products planning Production volume Source: VIRAC summarized Growth rate of product output (%/year) 101

102 3. Overview of Vietnam's Leather and Footwear Industry 3.8 Industry Planning Some solutions implementing the plan Investment planning Total investment capital in planning period (VND billion) Source: VIRAC summarized Material and auxiliary industries development solutions Market solutions 102

103 Contents 3. Overview of Vietnam Leather- Footwear industry 3.1 History of Establishment and Development 3.2 Industry Scale and Features 3.3 Leather industry 3.4 Footwear industry 3.5 Some other leather products 3.6 Machinery/Technology 3.7 Risks and Threats 3.8 Industry Planning 3.9 Driving Forces and Forecasts 103

104 3. Overview of Vietnam Leather- Footwear industry 3.9 Driving Forces and Forecasts - Driving forces for development Domestic market Export markets 104

105 3. Overview of Vietnam Leather- Footwear industry 3.9 Driving Forces and Forecasts - Driving forces for development Labour cost comparison between some major footwear producer countries (USD/hour) Source: VIRAC, Chinaleather 105

106 3. Overview of Vietnam Leather- Footwear industry 3.9 Driving Forces and Forecasts Global forecast USD billion Global footwear consumption forecast, 2015e f Source: VIRAC summarized 106

107 3. Overview of Vietnam Leather- Footwear industry 3.9 Driving Forces and Forecasts Vietnam forecast Footwear sector scale forecast, f USD million Million pairs Source: VIRAC summarized 107

108 3. Overview of Vietnam Leather- Footwear industry 3.9 Driving Forces and Forecasts Vietnam forecast 108

109 Contents 4. Enterprise Analysis 109

110 4. Enterprise Analysis 10 enterprises having the highest revenue in the leather and footwear industry Conpany Information 110

111 4. Enterprise Analysis Company Information 111

112 4. Enterprise Analysis Company Information 112

113 4. Enterprise Analysis VND Trillion Net revenue, Source: VIRAC Gross Profit, VND trillion Source: VIRAC 113

114 4. Enterprise Analysis VND Trillion Corporate Income Taxes, Source: VIRAC Pou Yuen s profits Source: VIRAC 114

115 4. Enterprise Analysis VND billion Selling expenses, Source: VIRAC General & Administrative expenses, VND billion Source: VIRAC 115

116 4. Enterprise Analysis VND Billion Self-financing rate, Source: VIRAC VND Billion Liabilities,, Source: VIRAC 116

117 4. Enterprise Analysis Other indexes, 2016 Turnovers Inventories days Total assets turnover Average collection period 117

118 4. Enterprise Analysis Profit margin, Source: VIRAC 118

119 4. Enterprise Analysis Solvency, Source: VIRAC 119

120 Content Appendix: Financial Statements 120

121 Appendix Financial Statements Pouyuen Vietnam Co., Ltd. BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents II. Short-term financial investments INCOME STATEMENT Unit: VND million Net revenue Cost of goods sold III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 121

122 Appendix Financial Statements Tae Kwang Vina Industrial Jsc. BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents INCOME STATEMENT Unit: VND million Net revenue II. Short-term financial investments III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Cost of goods sold Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 122

123 Appendix Financial Statements Chang Shin Vietnam Co., Ltd. BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents II. Short-term financial investments INCOME STATEMENT Unit: VND million Net revenue Cost of goods sold III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 123

124 Appendix Financial Statements Hwaseung Vina Co., Ltd. BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents INCOME STATEMENT Unit: VND million Net revenue II. Short-term financial investments III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Cost of goods sold Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 124

125 Appendix Financial Statements Pousung Vietnam Co., Ltd. BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents INCOME STATEMENT Unit: VND million Net revenue II. Short-term financial investments III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Cost of goods sold Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 125

126 Appendix Financial Statements Pou Chen Vietnam Co., Ltd. BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents INCOME STATEMENT Unit: VND million Net revenue II. Short-term financial investments III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Cost of goods sold Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 126

127 Appendix Financial Statements Thai Binh Holding & Shoes Manufacturing Company BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents INCOME STATEMENT Unit: VND million Net revenue II. Short-term financial investments III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Cost of goods sold Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 127

128 Appendix Financial Statements Vietnam Dona Standard Shoes Co., Ltd BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents INCOME STATEMENT Unit: VND million Net revenue II. Short-term financial investments III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Cost of goods sold Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 128

129 Appendix Financial Statements Vietnam Dona Orient Co., Ltd BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents INCOME STATEMENT Unit: VND million Net revenue II. Short-term financial investments III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Cost of goods sold Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Souece: VIRAC 129

130 Appendix Financial Statements Dong Nai Viet Vinh Shoes Co., Ltd BALANCE SHEETS Unit: VND million A. CURRENT ASSETS I. Cash and cash equivalents II. Short-term financial investments INCOME STATEMENT Unit: VND million Net revenue Cost of goods sold III. Short-term receivable 1. Short-term receivables of customers IV. Inventories B. NON CURRENT ASSETS TOTAL ASSETS A. LIABILITIES Gross profit Revenue from financing activities Financial expenses Interest expenses Selling expenses I. Current liabilities 1. Borrowings and short-term financial leased liabilities 2. Taxes and other payables to the State budget II. Non current liabilities 1. Borrowings and long-term financial leased liabilities 2. Provision for long-term payables B. OWNER S EQUITY TOTAL CAPITAL RESOURCES General & Administrative expenses Income from operating activities Net income before tax Current corporate income taxes Deferred corporate income taxes Income after tax Source: VIRAC 130

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