Quanzhou Shoe Companies Explore Cost Recovery Solutions

The 2008 Olympic Games brought strong impetus to the private sector of the economy. The sporting goods industry expects a lot of benefits this year. The Quanzhou footwear industry, which mainly produces sports shoes, also has high hopes for 2008.

However, opportunities and challenges coexist. After entering the 2008, the cost of oil, raw materials, workers and wages continues to rise, and shoe industry is facing unprecedented cost pressures.

At the same time, the foreign trade environment of shoemaking industry is also not optimistic.

In the context of the continued depreciation of the US dollar, the EU may extend the implementation period of the "anti-dumping measures", and the restrictions on foreign technical barriers have repeatedly been raised or improved, so that the Quanzhou footwear industry, which accounts for about half the proportion of domestic and foreign sales, will usher in a Development Gateway.

This is not the best time, nor is it the worst one. How can the footwear industry in Quanzhou before the adjustment and upgrading of industry go to the cost pressure?

How to deal with the resistance of export market?

How should enterprises develop jointly on the road of industrial upgrading?

In order to untie the current confusion and find out the best way to develop, the seminar on "upgrading of footwear industry in Quanzhou" organized by the Quanzhou footwear industry association was held in Quanzhou on the 21 th of this month. The Quanzhou shoemaking enterprises and associated enterprises from the upstream and downstream of the industrial chain were gathered together to make in-depth analysis and communication on the deep-seated causes and solutions of the current rising costs, and discuss how the future enterprises should identify the location and meet the new challenges.

[part I]

Stress test

The rising of international oil prices has brought the cost of materials in rubber industry up, so the price of raw and auxiliary materials in shoe making industry has increased a lot, and the situation is not optimistic.

This increase is higher than the gross profit margin of the average 10%% of OEM export enterprises.

A big test of cost pressure is coming.

Three factors pull costs soaring

Hua Bilin, general manager of Huaxiang Chemical Trading Co., Ltd. believes that soaring crude oil prices are one of the factors that increase the cost of raw materials. In addition, the closure of supply and demand has been one of the reasons for the recent closure of upstream enterprises.

He said that due to the promotion of the Beijing Olympic Games, the relevant parties paid more and more attention to environmental protection, and small scale illegal enterprises were asked to close.

In particular, the closure of many small chemical enterprises in Beijing, Shandong, Hebei and Henan has resulted in a change in market supply and demand, which indirectly affects the prices of raw materials.

Hua Lin Lin predicted that this imbalance between supply and demand may return to normal after the Beijing Olympic Games.

He thinks, because the price rise of chemical raw materials is caused by imbalance between supply and demand, the long-term impact on the industry is not very large, while the price of rubber on the sole of the main material has a relatively large impact on the cost of shoes.

For the balance of supply and demand factors, Shengda Footwear Co., Ltd. Qiu Yang has another explanation.

For example, he said that after the recent rise in domestic oil prices, the impact on international oil prices was due to the expected market price rise, which would lead to a decrease in demand. When the demand was low, the market price would naturally drop.

He said: "there are more and more shoe factories in China, and Vietnam, Bangladesh and other countries have also set up many shoe factories. When the demand of the international market is not large, customers will lower the price. If you do not do this price, others will do it, so that the enterprise can only be" bleeding "and can not earn money.

In addition to two factors, the imbalance between supply and demand and the price of crude oil, some enterprises believe that there are third factors in stimulating the soaring cost of shoemaking, that is, the "dug" behavior between enterprises and the excessive flow of labor.

Ding Shishui, general manager of Fu Shi Lai shoe industry Co., Ltd., believes that how to avoid the vicious dig incident among enterprises is a big problem.

"Now workers have an abnormal job hopping phenomenon of" walking circles and changing ten thousand ". The abnormal frequent flow of employees between enterprises has greatly increased the cost.

As long as we can avoid the problem of "unhealthy" job hopping among enterprises, we can save billions of dollars in one year.

In fact, our advantage is the advantage of labor, but the labor mechanism has been adjusted and the cost has increased. "

He said.

Guo Kui, general manager of Guo Hui shoes industry Co., Ltd. believes that there are many talents available and many ways to use them. Enterprises can cultivate talents in many ways and ways.

"For example, in designing talents, we have recruited many new design talents from several universities in the United Nations, and they are also quick to get started."

Ding Guosi believes that malicious digging will form a virtual high labor price, enterprises can try new ways, do not spend 300 thousand yuan, 500 thousand yuan to dig people.

Shoe sole raw material price rises

The rising price of raw materials makes the shoe material enterprises in the middle part of the industrial chain more stressed.

Shoe materials companies sigh for losses. The only way to do this is to reduce production, make less purchases and wait for opportunities to improve.

Wu Tianci, general manager of Quanzhou Xintai Shoes Co., Ltd., who mainly produces sole, calculated an account. The price of the main raw materials of rubber soles was compared with that of the same period last year.

In addition to rising costs, some enterprises are closing down, resulting in enterprises' arrears.

Wu Tianci said that at present, we should try our best to cut down unnecessary waste from the management, and hope that we can raise the price of the finished shoe factory to get compensation.

[novella]

Decompression exploration

The law of industry development is established. The price rise of raw materials and the change of development environment bring pressure to every enterprise in the industry, so the key to enterprise competition is how to discover value.

Export market is difficult to resolve pressure

In the face of the call for raising prices in the intermediate links of the industrial chain, the manufacturers of finished shoes introduced the difficult situation of difficulty in digesting and pferring the pressure of rising prices.

Ding Youyi, chairman of Jinjiang WorldCom Footwear Co., Ltd. believes that the development of this industry is related to the international environment and domestic macro regulation and control.

He said, if the shoe material is raised, the shoe manufacturers can not find the outlet to pfer pressure, which will also cause business difficulties for export enterprises.

For example, he said, at the beginning of this year, the price rise of raw materials led some domestic manufacturers to raise the price requirement to foreign purchasers such as WAL-MART, but WAL-MART clearly indicated no price increase.

"Coupled with the impact of the depreciation of the dollar, the export market" beauty line "recession is obvious, and the" European line "is also not optimistic.

He said, according to European businessmen, Europeans are now spending two of their consumption on clothing and eating, and among the two, the first choice is to take care of their own belly. Therefore, in relation to supply and demand, the European line market demands will not change immediately.

Adjustment of survival of the fittest and way out

On the one hand, the adjustment of industry development rules is another aspect -- many enterprises support the same view.

Li Haiting, general manager of Bao Yu shoes industry Co., Ltd. believes that the price increase of raw materials is not terrible. It is feared that in the future competition, enterprises can not find the core competitive advantage.

He said that the price rise of crude oil is global now, not local or single industry. The market is competing every day. The change of the environment always has ups and downs. How to save energy and reduce emissions and reduce internal friction in the process of development is a key.

"The world is fair, the pressure is the same for everyone, the price rises in all fields, the key lies in how the enterprise finds value.

Many enterprises have not improved their technology, but their cost has increased. "

He said.

"Our industry has been developing for more than 20 years, and now it meets the adjustment period of industrial upgrading. This is the law of industrial development. The industry is not going downhill. The pressure is actually testing the tenacity of the enterprise. Whether the business operation or brand operation, how to improve positioning in the government's promotion of the headquarters economic strategy is the key."

Ding Guosi said.

Qiu Zhaoyang, general manager of Huian Shengda shoes industry Co., Ltd. believes that in the low period of the industry, eliminating bad ones and coming back again is not necessarily a bad thing.

"The law of industrial development is not what we want, but the reality is that we must overcome the fittest according to the law of the industry.

From the perspective of industry, the adjustment of the market depends on how we protect ourselves.

"This is the whole of China and even the global climate. Everyone is such a market.

From the perspective of industrial integration, the streamlined ones are streamlined.

Fu Shi Lai Ding Shi Shui supports the idea of "survival of the fittest" within the industry.

[Part II]

Consideration of good prescription

In this seminar on shoe industry upgrading in Quanzhou, another important topic that calls for the highest is the strong alliance between Quanzhou footwear enterprises.

Such a union is not a direct takeover or merger among enterprises, but rather an upstream and downstream enterprise, such as a joint sales joint venture set up by overseas enterprises, a large order integration industrial chain, and a common digestion cost and a combination of risks.

Setting up overseas branch to reduce intermediate trade expenses

Jinjiang Shi Tong shoes Co., Ltd. is an export shoe manufacturer in Jinjiang.

"At present, our finished shoes are mainly exported to dozens of countries in many parts of the world, such as North America, Europe and South America, and are one hundred percent of the export oriented enterprises.

60%% is a pfer order for foreign trade in our foreign trade order. 40%% is the foreign customer order accumulated by our company for many years.

Although we also have direct foreign trade customers, if we want to set up sales branches directly overseas, we still have some difficulties in terms of capital strength, technology and legal support.

Ding Youyi, chairman of the company, said.

Qiu Zhaoyang likes to investigate overseas markets on the spot, and he has a deep understanding of the current overall sales environment abroad.

"Many neighboring countries like Vietnam, Bangladesh and so on, the number of shoe factories has been increasing in recent years.

The growth in demand for shoes worldwide is actually limited. It is also an order for shoes. If we do not, other parts of the country like Zhejiang can do so, and other developing countries can do it.

If we only operate according to the traditional sales mode, the development of our overseas market is bound to be limited. "

"A few years ago, I proposed the practice of Corporate Alliance, which may be considered unrealistic.

Now, if the external environment continues to persist, enterprises must take concrete measures to deal with the current difficulties.

Joint venture is not necessarily necessary for mergers and acquisitions. Joint investment projects are also acceptable.

Ding Youyi thinks.

In this regard, Ding Guo Si agreed: "if enterprises embrace the development of overseas markets, in the United States, the European Union and other developed countries and regions, the establishment of overseas sales division.