The export of leathers, equipments, and shoes during the January to July of 2011 valued at 1,084.70 million dollars US, increased by 22.99 percent from export value. The equipments increased by 44.17 percent because the Leathers Industry gave priority to many parts of leather products development such as brand imaging, designing, purchasing the production machines from the privilege of free trade agreement, and the problem that many countries faced the low qualities of Chinese products, then they change to use Thai products with the better qualities.
The export of tan hides and leather products increased by 14.25 percent because many companies tend to produce leather shoes and the consumer’s popularities of using leather products as decorations, using lifestyle products made by leather, and using of leathers in Food and Medicine Industries such as chiseling Collagen from cowhide and using the tanning chemicals with met the agreement of REACH. However, the Tsunami accident in Japan also affected on the decreasing of export rate of tan hides for car seats.
The export of shoes and parts increasing by 23.47 percent caused by the expanding of 31.46 perfect in leather shoes export which is 53.34 percent of the overall. This is the result of orders from many countries that decided to change from China to Thailand because the Thai products are refinement and have better in designs. Moreover, the wage in China was increasing and China tends to produce the shoes only for sell in the country. Nevertheless, the export of sport shoes constantly decrease by 13.28 percent during January to July because it lose the market shares to Vietnam and China from the production movement of the giant sport shoes business.
The Thai Leathers, Equipments, and Shoes have the important competitors as China, Vietnam, and India. The major export markets are America, Denmark, China, Hong Kong, Vietnam, Japan, and the United Kingdom. These all markets could calculated into proportion as 49.46 percent and the other markets which has the high rate of expanding are Russia, 90.03 percent, Switzerland, 84.56 percents, and Pakistan, 66.61 percent.
Problems and Obstacles
- Raw material cost such as resin, plastic, chemicals and tan hides are increasing, especially, the raw leathers price in local and international changing and tend to increasing because of the disasters that affected on farming animals for leathers.
- Lack of workforce because the policy of increasing the minimum wage of the government. Many workers slow down to apply for a job and wait for the certain policy from the government sector.
- Lack of raw material and technology for production of finished goods.
- Losing of many market shares from the export of sport shoes from the production movement of the giant sport shoes business in America.
- The strong baht which causes the increasing of Thai products prices and hardly to assign for the selling price.
Strategies for the entrepreneurs
- Developing brand image for export
- Always manage the Marketing activity
- Give priority to product design which difference from competitors and up-to-date by marketing research.
- Developing products with new technologies and developing personal, especially in designing sector.
- Developing and promoting Thai producers and exporters in Global Sourcing and Internationalization.
Reference: Department of Export Promotion, Ministry of Commerce, the Royal Thai Government, July 2011