On May 11th, 2018, TBS Group officially inaugurated the TBS Sole Technology Center and the R&D Center for Sole manufacturing in Song Than 3 Industrial area, Binh Duong. These centers shall focus on researching, developing, and supplying types of Soles for TBS’s shoe manufacturing division, as well as researching and supplying compound materials for the Sole manufacturing industry in general (from combining many raw materials to manufacturing semi-finished products used for compressed soles or EVA phylon). This market still has growth potential for the Sole manufacturing industry in Vietnam, however, most of the volume currently belongs to FDI Enterprises.
ANSWER FOR PROBLEMS OF MATERIAL LOCALIZATION OF FOOTWEAR INDUSTRY
Currently, although Vietnam is in the top 3 of the biggest countries of manufacturing footwear and ranked with the second position among the biggest countries of exporting footwear in the world, the value added to Vietnam footwear products is still modest because the localization rate supply for raw materials and auxiliary materials of domestic production is not high.
According to the Ministry of Industry and Trade, the localization rate of the footwear industry has improved but only reached 50% and many materials require high technology, including shoe soles, which is still a difficult problem.
With determination and an attitude that says “If the world can do this, we for sure can do this,” Nguyen Duc Thuan, chairman of TBS Group, has set a target of mastering the technology of the fashion industry. Thus, focusing on the development of shoe soles technology is a great strategy for TBS to fully master the technology of the footwear industry, contributing to the domestic enterprises’ initiative in domestic raw materials.
According to statistics from the Vietnam Leather and Footwear Association, a pair of soles occupies 15-25% of the value of sports shoes, depending on the type of technology. Ownership of shoe soles technology will help bring added value to the shoe industry. With the Sole factory built in 2002, TBS has mastered the technology of producing rubber soles, EVA, and Phylon. With the expansion of TBS Sole Technology’s existing two factories, TBS will focus on research, development and supply of a new line of sports shoes with IP Technology (Injection Phylon – technology injecting material directly into the mold) and new compound materials for soles to meet the needs of the world and catch up with the development trends of the domestic and foreign footwear industries, especially soles for shoes sport.
TBS SOLE TECHNOLOGY AND CHALLENGES FOR TECHNOLOGY DEVELOPMENT
With a total area of 113,890 square meters, the TBS Sole Technology Center, with advanced equipment and technology, is capable of supplying 32 million pairs of finished products including EVA Phylon, liner, cup insole, IP products, and about 20 million products are other materials, including compound, which will contribute about 20% of TBS Group’s sales.
In order to do this, equipping with advanced technology and equipment is not enough, but for a long time, TBS Group has built a team of technicians who are knowledgeable about soles production technology because these personnel are currently few compared to the huge demand to meet the production of about 700 million pairs of sport shoes per year in Vietnam. This is a very specific industry where most FDI factories, including joint ventures, do not intend to transfer technology to local factories.
This team is developed from practical experience and is sent by TBS Group to train and participate in many international programs on the technology of shoe soles. From establishment of the first TBS sole factory in 2002, 16 year experience is still relatively short compared to that of large corporations with more than 50 year experience such as Pou Chen, Taekwang, Hwasueng, and Feng hand, but the continuous effort and especially fast access to new technology are the most valuable source of capital for investment in the TBS Sole Technology Center.
However, these are not one-sided advantages. There are many immediate and long-term challenges, especially the rapid change of technology that shortens product lifecycles; the rapid development of 4.0 technology reduces the cost of production, the increasing demand from import markets, especially the environmental protection standards, which easily knock down any factory with investment in technology without long-term vision.
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