The growth of Thailand's footwear industry is set to slow this year, with neighbouring countries such as Vietnam, China and Indonesia benefiting instead.

"Footwear products from Thailand are facing a sharp reduction in exports compared with other countries in the region, like China and Vietnam, which are enjoying low production costs," said Thamrong Tritiprasert, chairman of the Footwear Industry Club under Federation of Thailand Industry (FTI).

"As a result, growth of the industry in 2007 with be the same or lower than 2006."

The country's textile, apparel and footwear industries are reportedly suffering difficulties, largely due to strong currency appreciation.

Meanwhile, key competitors including China, Vietnam and Indonesia are developing footwear materials and growing support from big importers like the US, EU and Japan, Tritiprasert added.

At present, export prices of Thai-sourced shoes are 17-18% higher than in Vietnam, while the scale of footwear production in Vietnam is three-times larger than Thailand's, figures from the FTI show.

The conditions have been driving many local footwear manufacturers to terminate production or shift their plants to other countries.

Saha Union, whose shareholders last month approved the delisting of Union Footwear's shares, currently plans to close several of its five plants in Thailand after reporting losses.

Thailand's footwear enterprises still remain relatively optimistic though, because the country has good material sources and supporting industries compared to Vietnam, China and Indonesia.

In addition, Thailand is expected to enjoy an export boom to Japan when an Economic Partnership Agreement (EPA) between the two countries begins.

However, Vietnam and Indonesia are also members of the Asean region signing the EPA and will enjoy similarly favourable conditions.

By Ngo Tuan.