São Paulo – Saudi Arabia is the second main destination for shoe exports from Franca, in the interior of the state of São Paulo, according to information disclosed by the city’s Shoe Industry Union (Sindifranca). The Arab country climbed to the position in the first half of this year, while in Brazilian sales of shoes as a whole, the country was in the 15th place. The main destination for shoe exports from the city is the United States, to which sales dropped by 40% in the period. The Saudis, in turn, bought 19% more.
“The crisis obliged companies to seek new markets,” said the president at Sindifranca, José Carlos Brigagão de Couto, regarding the international economic crisis that erupted in 2008, faced mainly by the Europeans and North Americans. He stated that the USA has remained in the first position in the Franca export ranking, but that the second place has been varying between Saudi Arabia and Argentina. “Each country has its style of shoes (consumed), companies adapted and are being successful in Saudi Arabia,” he said.
The Sindifranca president explains that the city had its export peak in 1993, when as many as 15.5 million pairs were shipped abroad. From then on sales have been dropping. Last year, factories from Franca exported three million pairs. Couto pointed out internal factors, like the so-called “Brazil Cost” and exchange rates as reasons for this hardship, but he said that the situation became harder due to the global crisis.
In 2007, the year prior to the crisis, exports from Franca had already dropped, but were at 5.3 million pairs, dropping to 4.4 million in 2008 and 3.1 million in 2009. In 2010 they climbed to 3.3 million pairs. This year, up to June, local producers had sold 1.2 million pairs abroad, with reduction of 18% over the same months in 2011.
Sales to the Arab market, however, grew 22% in the same comparison. Apart from the Saudis, other buyers of shoes from Franca are the United Arab Emirates, Kuwait, Lebanon and Oman. In total, sales to these five nations in the Middle East reached 206,800 pairs. In the same months last year, exports to the Arabs nations were 168,500 pairs and also included Syria as a destination. This year, in turn, Syria did not buy shoes from Franca. Sales to the Saudis totalled 138,900 pairs this year up to June, which represents 32% of the purchases by the United States: 430,900 pairs.
Couto stated that some measures taken by the federal government, like the Greater Brazil Plan, and the current dollar exchange rate, more favourable to exports, should help increase sales abroad. "But it should take a while for the measures to have an effect on foreign trade,” said Couto. The Greater Brazil Plan generated a series of benefits for 11 sectors in the country, among them shoe production, including lower taxes on the paysheet and greater export financing.
The president at Sindifranca stated that shoe exports from the city should drop this year, closing at some 2.6 million pairs, but that if the government goes on taking measures to help soothe the effects of the international crisis, they may return to growth in 2013. Among the government actions expected for the sector are reductions in energy costs, labour and tax reform, as well as favourable exchange rates.
The city of Franca currently has 467 shoe industries, as well as 265 service providers for the sector. Among the factories in the city, just six are large, 54 are medium, 195 are small and 212 are micro, according to the latest available figures. The hub produced 37.2 million pairs of shoes last year, mostly male leather shoes. Almost all, around 34 million pairs, should go to the domestic market.
*Translated by Mark Ament
