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Chapter 2 The future scope of Iran’s shoe industry

The initial results of the latest figures released from Iran’s custom, by the working group tasked with statistical analysis of shoe industry and World Trade Organization in 2015 are as following:

  1. The average price of an Iranian export pair of shoes during the Iranian years of 1390-94 have been $3.05. Based on the latest figures released in 2015 by international sources, each pair of export shoe in international markets has been $8.88. It has been $8.18 in China, $3.47 in Turkey, $9.58 in Pakistan and $46.21 in Italy.
  2. The average prices of Asian export pair of shoes have been $6.7 and European shoes have been $22.72.
  3. The proportion of share of value of leather shoe export to the world’s total shoe export in the same time span has been 39% ($52b to $133b) and the proportion of leather shoe export to the world export have been some 15% (2130 million pairs to 14233 million pairs).
  4. In 2015, each pair of leather shoes exported for the average price of $24.29. The average price of leather shoe has been between $17.80 in Asia to $39.90 in Europe. In 2015, the price of leather shoes has been decreased by 4%.
  5. Among the five countries exporting shoes in Asia, the average export price has been $20.6 in Indonesia, $17.19 in Hong Kong, $14.45 in Vietnam, $11.92 in India and $5.18 in China.
  6. The 10 biggest shoe exporter companies in 2015 have been China with average price of $15.75, Italy with $61.5, Vietnam with $20.37, Hong Kong with $27.34, Germany with $34.7, Indonesia with $23.48, Spain with $37.46, Belgium with $27.86, India with $16.72 and Portugal with $31.
  7. The comparisons between Iran’s two neighbor countries, Pakistan and Turkey, which have records in shoe production in the world, are notable. Pakistan stands as the 6th largest shoe producer in the world with 366 million pairs. Pakistan’s export in 2015 have been 12 million pairs, $9.58 each, fetching $116m (45th in export value and 40th in quantity). Pakistan has exported some 79% of value and 51$ of its total production to Germany, Italy and Britain.
  8. Turkey stands as the 8th largest shoe producer in the world with 350 million pairs. Pakistan’s export in 2015 have been 281 million pairs, $3.7each, fetching $627m (42th in export value and 10th in quantity). Turkey has exported some 42% of value and 22$ of its total production to Russia Germany, and Britain.
  9. Iran, with 200m pairs, stands at 9th position among shoe producers in the world. The average shoe export rate during the five year span has been 40m pairs with average price of $3.05, fetching $122m. Export share of value of leather shoes has been 4% in terms of number and 8.5% in terms of value, with the average price of %5.5 for each pair.
  10. To investigate the real position of Iranian shoes in world shoe market and illumination of the future scope of Iran’s shoe industry, comparing average export prices with the prices in world market could significantly help navigation of world shoe export. Notice the following figures: average price in the world has been %8.8 and for leather shoes have been $24.39, for China $8.18 and $15.7 for leather, in Turkey $3.7 and $7.09 for leather, Pakistan $9.7 and $15 for leather, and in Iran, $2.23 and $5.6 has been the price for leather shoes.
  11. During the past 10 years, the total value of world shoe exportation has doubled and a part of the growth has been due to the increase in average price and the other part has been due to changes in export pattern in favor of those with higher added-value (leather shoes). However, shoe exportation in Turkey reached from $200m in 2005 to the tripled amount of $627m in 2015. Also in terms of number, it increased from 45m pairs to 180m. Nevertheless, Iran’s export value during the past 10 years has only had an 18% growth (from $83.5m to $98.7m) and in terms of numbers, Iran has experienced a 27.6% decrease (45.9m pairs to 33.2 million in the end of the time span).
  12. Given the comparisons between world’s leather shoe export share of value, which is equal to 39% in 2015, in China equal to 73%, in Vietnam equal to some 37%, in Turkey equal to 42% and in Pakistan equal to 78.5%, with Iran’s average value of export during past five years, which is equal to 7%, the real structural orientation of the country’s shoe industry is revealed. To fill the gap between Iran’s value of export which is 5.5 times weaker than the whole world, 2.8 times from China’s, 10.4 times from Italy, 5.2 times with Vietnam, 6 times with Turkey and 11.2, the orientation of Iran’s shoe exportation should gradually undergo strategic changes. In a way that, given 40m export in early years and aiming at increasing the share of value from the current 4% to the world average of 15% (1.6m pairs to 6m pairs), and increasing the average price of export leather shoes from $5.3 to $162 and ordinary shoes from $3.05 to $4.05 and increasing the share of exports of leather shoes from 7% to 37%.

Reaching to the set goals is only feasible with efficient plans and annual quantitative goals for each production units, in a way that realization of “Santa’s shoe” scenario for small businesses and “flying elephant” scenario for medium and large businesses need integrated and efficient plans. The proposition is hoped to be approved as soon as possible by the Ministry of Industries and Business, to quickly restore the integration and collaboration. If the goals realized, the major brakes on the path of domestic production, including high final price, will be soon obviated with the help of wise executive actions. Otherwise, and if the current trial and error strategy is continued, conserving the export combination and priorities (91% non-leather shoes and 9% leather shoes), we should accept zero progression in the domestic shoe industry.

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