Taiwan's shoe makers expanding operations in Vietnam

Taipei, Dec. 6, 2004 (CENS)--Seeing great sales potential in Southeast Asia, Taiwan's makers of shoes and related products are aggressively expanding their operations in Vietnam, including San Fang Chemical Industry Co., Pou Chen Corp., Feng Tay Enterprises Co., and Taiwan Paiho Ltd.

Lin Meng-chin, San Fang's general manager, said that Vietnam has gradually replaced Indonesia as a shoe-making center in Southeast Asia. Market observers also noted that the free trade agreement among members of the Association of Southeast Asian Nations (ASEAN) would encourage the world's brand shoe companies to tap the huge market there.

Taiwan's shoe makers, in line with their clients, have in recent years set up their footholds in Vietnam, gradually forming a manufacturing cluster there. Lin of San Fang said that Taiwanese shoes makers in Vietnam can provide their products not only to the United States and Europe, but also to the emerging market in Southeast Asia.

To meet the demand of Taiwan's shoe makers in Vietnam, San Fang has recently spend some US$30 million to set up a synthetic leather plant there. The new plant can turn out 300,000 yards of synthetic leather per month.

Pou Chen and Feng Tay, Taiwan's two leading shoe makers, are actively enlarging their operating scale in Vietnam. The former is planning to establish a split leather plant in an industrial zone in Vietnam developed by Taiwan's Formosa Plastics Group. And the latter is going to funnel US$10 million this month to expand its operations in Vietnam.

Besides, Feng Tay has decided to launch an additional US$4 million in Vietnam next year to increase the production lines there to 55 before the end of 2005 from 35. After that, its production scale in Vietnam will be larger than that in the mainland, where the company owns a total of 45 produciton lines.

With the expansion, Feng Tay's production capacity in Vietnam is estimated to reach 2.04 million pairs of shoes per month in 2005, much higher than the monthly output of 1.3 million at the end of this year. Next year the company will double its workforce in Vietnam to 20,000 persons from the current 10,000 persons to meet the expansions.

Taiwan Paiho, a professional manufacturer of hook & loop fastener tapes, is building a plant in Vietnam too. A senior official at the company disclosed that the new plant is slated for completion by the end of 2005 and the employees of the company, who are working at a rented plant now, will be able to move to the new plant then.