São Paulo – With a slumping domestic market, the Brazilian footwear industry is putting its expectations on the growth of exports. The sector’s international sales declined 11.2% in the first half, but until the end of the year this figure should improve to 6.4%, which signals positive outlooks for the next months.
The data was released this Tuesday (7th) at Francal, the sector’s fair, by the Brazilian Footwear Industry Association (Abicalçados). On the occasion, the Institute of Studies and Industrial Marketing (IEMI) presented a survey that points to a positive environment for exports. The exhibition is open until Friday (9th) at Parque Anhembi, city of São Paulo.
Heitor Klein, president of Abicalçados, listed a series of factors that pushed the sector to believe in external sales. One of them was the economic adjustment of the United States, which is the largest market of the Brazilian footwear industry abroad, and another one is the recovery of competitiveness of Brazilian footwear prices due to the exchange rate, to the devaluation of the Brazilian currency.
He also pointed out the effort of the companies to export due to the situation of the slumping domestic market and the National Export Plan (PNE), launched by the government last week, as drivers of international sales. “These factors encourage us ot have better expectations related to footwear exports”, said Klein.
Despite being the third largest footwear producer in the world, Brazil is only at the 16th place on exporter rankings, according to a study presented by IEMI’s director, Marcelo Prado. China, currently the world’s largest footwear producer, is also the largest exporter, with 41.2% of the market, according to IEMI’s data concerning the year 2013.
Brazil was better positioned once in the global footwear market, but that was when it was a low-cost alternative for importers. This position, however, was occupied by the Asians and Prado says that to win back the external market, the companies currently need to invest in design and differentiation, and that the country should negotiate privileged access to relevant markets. The exchange rate alone isn’t enough to increase exports, said the IEMI’s director.
Prado reminded that countries where the production cost is bigger are better positioned than Brazil in exports’ rankings. After China, the second largest international footwear seller is Vietnam, followed by Italy, Hong Kong and Belgium. The international footwear market moves around US$ 117 billion per year.
Brazil manufactured last year 877 million pairs, a decline of 2.5%. For 2015, IEMI’s forecast is that this figure should improve to a decline of only 0.3%. “In the second half there should be a recovery, but still it won’t be enough to achieve growth”, said Prado. He said that exports haven’t recovered yet, but that they are an opportunity for the sector’s recovery. He believes that there will be a big exports boost in a year or two.
Data from the Ministry of Development, Industry and Foreign Trade (MDIC), released by Abicalçados, indicates that Brazil exported US$ 463.9 million of footwear in this year’s first half. In the same period of 2014, revenues with the external market stood at US$ 522.4 million. In June only, international sales declined 5.9% over the same month of last year and reached US$ 78.5 million.
*Translated by Sérgio Kakitani
