Wenzhou Shoe Downtime Effect Amplifies Industrial Chain Risk

Abstract: compared with previous years, the production enthusiasm of Wenzhou shoe enterprises has been greatly frustrated in the first quarter of 08 years, and there are more than 70 enterprises in Wenzhou shoe making enterprises that have failed to switch production in recent months. In fact, the shrinking number of enterprises in Wenzhou shoe making industry is the continuous momentum in recent years. In 2003, Wenzhou had about 5000 shoe enterprises of a certain scale, and in 08 years, the figure became 2600.

In the past 5 years, more than 2000 small and medium-sized enterprises have been disappearing. With the increase of various pressures, there will be a further aggravation of the enterprises that switch to production and collapse.

Wenzhou shoe industry encountered cold spell

In 08, 1 and February, the number of footwear exports in Wenzhou was 98 million 440 thousand pairs, with a total value of 440 million US dollars, up 1.13% over the same period last year.

In January, it exported 280 million US dollars, an increase of 25.32% over the same period last year, and 159 million US dollars in February, a 24.54% decrease compared with the same period last year.

Excluding the February Spring Festival and other reasons, the downward trend is still obvious.

Wenzhou shoe 60% is used for export, so it has the same sensitivity to anti-dumping, export tax rebate reduction, US dollar depreciation, labor cost and raw material price increase.

Because of Wenzhou's local shoe enterprises, most of its trading partners are from the European Union, and most of Guangdong's orders are different from the US. Therefore, Wenzhou shoe industry has been paralyzed in the last half of last year.

However, since the beginning of 08, labor costs have suddenly increased due to the implementation of relevant regulations. At the same time, many domestic shoemaking Export enterprises are turning their eyes from the us to the EU countries, and the industry competition is intensified. The Wenzhou shoe enterprises with slightly profit margins are facing a grim price war, leading to some small and medium-sized enterprises opting out.

The most direct manifestation of the industry level is the continued decline in profits.

According to the report provided by the association, in the past 08 years, due to various comprehensive factors, it is estimated that at least 15% of the profits of enterprises, especially foreign trade enterprises, have been squeezed.

Downtime effect amplifies industrial chain risk

After decades of development, the footwear industry in Wenzhou has formed a complete industrial cluster.

A shoe company is equivalent to a motor vehicle factory. It is only responsible for assembly. Its shoes, shoes, shoes, leather shoes, shoes and accessories are matched by dozens of enterprises. Therefore, at present, the more than 70 shoe enterprises that are shutting down and pforming will have an amplification effect in the whole industrial chain.

AOKANG, Lilis and other Wenzhou shoe enterprises insiders reflect that the problems faced by their upstream suppliers are even more grim. As it is difficult for them to shift all the pressure of cost increase to the more powerful enterprises in the downstream, some supporting enterprises choose to go bankrupt or half stop.

Wenzhou shoe leather industry association uses "difficult steps" to describe local small businesses, and many enterprises can only open one of the three production lines.

The average net profit of Wenzhou shoe enterprises in the past year is about 5%, and according to this calculation, the loss of footwear industry, which takes 08 years as the export oriented industry, will not be an individual phenomenon.

In recent years, Sichuan, Taizhou and other provinces and cities shoe industry base rise, Taizhou shoes price is lower than Wenzhou shoes, domestic overcapacity phenomenon is obvious, even without the impact of international trade, shuffle is inevitable.

At present, large export enterprises are now raising prices to maintain a profit and loss balance.

At present, the export industry of footwear industry in Wenzhou is affected by factors such as backward industrial structure and rising cost.

Small and medium-sized enterprises, which rely heavily on products and low prices to occupy the market, are facing the risk of withdrawing from the market or being taken over by large enterprises because they can not bear the pressure of rising costs.

And in the footwear industry of Wenzhou, enterprises that have established brand and reputation can pass the price pfer to ease the impact of rising costs on profits through the advantage of product structure.

Therefore, banks should be more cautious about the credit granting of Wenzhou footwear industry and export trade credit secured by accounts receivable.

Because of the decline in the international competitiveness of the export products of small and medium shoe manufacturing enterprises in Wenzhou, the value of the actual accounts receivable may be reduced in the future and the quality of the bank's credit can be affected.