Pou Chen Corp, the world's largest contract shoemaker, has become the latest Taiwanese manufacturer to shift its focus to Vietnam in anticipation of favorable tariffs brought by a Pacific Rim trade deal.
A known supplier of many major brands such as Nike and Adidas, Pou Chen is moving a large portion of its operations from China to Vietnam, where 42 percent of its shoes were made in the first nine months of this year, Nikkei Asian Review reported on Friday.
The company, which ships more than 300 million pairs of shoes annually and has 75 percent of its revenue from footwear and apparel, made 34 percent of its shoes in Vietnam in 2013 and then 39 percent last year.
Company spokesman Amos Ho was quoted as saying that it has been gradually moving its manufacturing bases to Vietnam since 2012, due to rising wage and employee benefit costs in China.
"We consider economic and political conditions in Vietnam to be stable," Ho said.
But, some analysts believed that the move, which has been carried out by other Taiwanese manufacturers, was mainly prompted by the Trans-Pacific Partnership.
The free trade agreement among 12 nations, including Japan, the US and Vietnam, is expected to boost shipments within the bloc, which accounts for 40 percent of the global economy.
Negotiations were completed last month and are now pending the approval of the countries' legislatures.
Peggy Shih, an analyst at Yuanta Securities Investment Consulting, told Nikkei Asian Review that under the deal, member states can export goods to the US without customs duties.
Pou Chen's smaller rival, Taiwanese-owned Feng Tay Enterprises, has also been expanding its business in Vietnam, where its factory has produced more than half of its shoes this year, according to the news report.
In June, Far Eastern New Century, Taiwan's leading textile maker, was licensed to invest in a factory with $274 million in the southern province of Binh Duong.
Taiwanese investors pledged a total of $972.8 million for 124 new and existing projects, mostly in the manufacturing sector, in the January-September period, according to the Foreign Investment Agency.