Relocation Of Taiwanese Shoe Companies To The West: Cost Accounting Behind Industrial Pfer

It accounts for half of the export of China's footwear products, including the "Daphne" brand Yung en group and many other Taiwan funded shoe companies.

But unlike domestic shoe companies, Jiangxi, Anhui, Hunan and other central provinces are geographically located near Taiwan's shoe factories in Guangdong and Fujian's stronghold, becoming the focus of research and investment.

According to the press survey, the enterprises that have moved to the central provinces now have a long time to recover the cost of investment because of the new construction of the new factories, and the remaining enterprises are facing the dilemma of rising costs.

Big Chuan shoe sample: monthly loss

In another one or two months, the two phase project of Taiwan Yung en group in Jiangxi, Lichuan, Jiangxi, will be completed and put into operation.

Cai Lizhu, deputy manager of the company, told reporters: "plus the first stage project that has been put into operation, the total investment for the two phases is 50 million yuan.

If the production is successful, the company will consider building all the processes of Daphne shoes in Lichuan, Jiangxi.

Wing on group is a Taiwanese funded enterprise established in 1987. The most famous brand of women's shoes is Daphne.

According to Cai Lizhu, since the establishment of a factory in Putian, Fujian in 1988, the group has 12 factories in the mainland, 9 in coastal cities such as Shanghai and Fujian, and the remaining 3 factories are located in the central provinces of Jiangxi, Anhui and Henan.

Among them, Jiangxi is the nearest place from Yong en Fujian factory.

Cai Lizhu told reporters that due to difficulties in recruiting workers, high cost and land saturation in the southeast coastal areas, the company has been planning to build factories in the central region in recent years.

Last September, after just three or four months' inspection, Yong en finally put the factory building in Lichuan County, Jiangxi, near the Fuyin expressway.

At the beginning of this year, the first phase of Jiangxi's Sichuan footwear industry was completed and put into operation.

As for the effect of "East shoes moving westward," Cai Lizhu felt deeply: in terms of labor cost, compared with the difficulty of recruiting people in coastal areas, the central region is more likely to recruit people, and the wage cost is relatively low.

This is also one of the most important reasons why they built the factory in the central part of the country -- labor cost accounts for about 20% of the total cost.

Due to the commitment of the local government to help solve the problem of personnel, the labor of the industry in Sichuan is quite abundant, and wages are cheaper than those in the coastal areas, with an average of 800-900 yuan a month, while the average wages of workers in coastal areas such as Fujian are 1000-1050 yuan.

The electricity charges in Jiangxi are also cheaper than those in the coastal areas, about 0.65 yuan / degree, while the coastal areas such as Fujian are about 0.8 yuan / degree.

And in the increased cost, including logistics costs, the monthly expenditure increased by 50 thousand -6 yuan over the past.

Cai Lizhu said that because the production line has just been put into operation, the workers are not proficient enough and the production has not kept up. Therefore, the factory is still in a state of deficit, with a deficit of 100 thousand to 200 thousand a month, so far, so far, the factory is still in a state of loss. But at the same time, she also estimates that with the increase in production, a surplus will be generated after half a year, but it is still a "slow" process to fully recover the cost of investment.

Despite the current losses, Cai Lizhu still feels that the central region is attractive to the Taiwan funded enterprises along the coast. "The price of labor, electricity, land, taxes and other elements is lower than that of the coastal areas. These advantages are quite attractive. Among them, it is mainly the full staff and good start up, so there is a possibility of further development, but inevitably the wages of workers will go up in the future."

The problems encountered by another Taiwanese funded enterprise are also quite representative.

Shanggao Yusheng Industrial Co., Ltd. located in Shanggao County, Jiangxi, is a company under Taiwan Baocheng group, which mainly produces world-famous sports shoes such as Nike and Adidas.

The company has invested $70 million for the first time, and since March last year, 12 production lines have been formally produced.

According to a manager in charge of the company, shoes now reach about 600 thousand pairs.

According to a staff member of the company's human resources department, about 10 thousand employees are currently employed by local labor employment agencies, but the turnover rate of new employees is higher in 1-2 months, sometimes even reaching 30%-40%.

This may be because the upper County town is not large, but many companies set up factories here.

Like a park, there are Taiwan funded enterprises such as Wangwang.

After a certain training, the workers may feel that the treatment of other companies is better, so they will have to switch jobs.

The staff said that now they can recruit about 1000 new people per month, and the cost of training for each new person is about 150 yuan.

According to this calculation, the monthly cost of training for Gao Yu Sheng is 150 thousand yuan.

The manager, who is in charge of the business, said that since its commissioning in March last year, the company has adjusted two wages, totaling more than 100 yuan, and the current salary is 700-800 yuan.

Although the salary is still lower than Coastal Corp's 1100-1200 yuan, if the scale of 10 thousand people is calculated, the monthly cost of manpower will reach 7 million -800 million.

Although the manager did not disclose the company's current profit and loss situation, he also said that the development in the central region also needed process.

The motive force of westward migration: wages, land and electricity charges

Li Peng, the Secretary General of the footwear association of Asia, described the construction of Taiwan funded enterprises in the central region with the help of "forced and helpless".

He said, now Guangdong shoe enterprises recruitment is very difficult, often 1000 people's factory recruited only 35 people, limiting the production of shoe enterprises, some of the factories that can not persist can only be closed down.

The factories that recruit workers are also tired of the continuous rise in the cost of workers. In the past few years, the wages of workers were still only eight hundred or nine hundred yuan, but now many are over one thousand yuan.

In addition, around the rise in the cost of workers, other kinds of costs are also rising. For example, in order to retain workers, some shoe companies in Guangdong have to improve the quality of dormitory environment, such as equipment, air conditioning, and so on, and the cost of management is also rising.

In addition, Li Peng said that in Dongguan, there is no spare land for these enterprises to expand production and build factories. The existing land prices are also very expensive, and can even reach a high price of 500 thousand -60 yuan per mu.

And the central cities are different, for example, the average labor cost in Jiangxi is 200 yuan cheaper than that in Guangdong, and the labor force is relatively easy to find. Compared with the coastal areas, the local government has promised to provide manpower guarantees for the companies that come to build factories in order to attract investment.

In the land area, the central city also has very big concessions, the land is very cheap, a mu up to tens of thousands of pieces, and the coastal land price difference between ten and twenty times, and some even give to the manufacturers.

The electricity charges there are also low. According to Li Peng's inspection, such as Jiangxi, the electricity charge is about 0.4-0.75 yuan / degree, generally 0.5-0.6 yuan / degree, which is nearly half cheaper than that in the coastal area, which is close to 1 yuan / degree.

And the shoe making enterprises of 1-2 000 people can use millions of electricity per month, and thousands of factories will have hundreds of thousands of factories per month. The reduction of electricity charges will save them a lot of cost.

In contrast, shoe manufacturers have built factories to the central and western regions that are less expensive than coastal areas, so as to alleviate the impact of factors such as labor shortage and land saturation.

Li Peng told reporters that taking Guangdong as an example, the large number of Taiwanese footwear enterprises with more than three thousand people are now outside the enterprises, accounting for 2/5 of the local five hundred large shoe enterprises, such as Huajian group, Baocheng group, Haifeng footwear industry, etc. all have set up factories in Jiangxi.

The rest are not easy to move in the course of investigation or because of industrial chain problems, but at least 70% of shoe manufacturers have visited Jiangxi, Hunan, Anhui and other central provinces. In fact, they are not only the mainland but also Vietnam, India, Bangladesh, Kampuchea and Tanzania.

He said that the Taiwanese shoe companies that can survive now are basically producing brands with a certain worldwide reputation, because brand shoes have high added value, stable orders and revenue sources.

Most of these shoes are exported to Europe and America.

Some shoe manufacturers who export to the European Union are very popular with Indonesia, India and other places in order to avoid anti-dumping duties.

Li Peng predicted that the main base of Taiwan funded shoe enterprises, such as Guangdong and Dongguan, will become a supply base for Taiwan funded enterprises in R & D, personnel training and raw materials, while the production base will move to the central cities.

Different voices: it may take ten years.

Unlike some large shoe companies in China, the path and mode of "East shoes moving westward" are different. Taiwanese funded enterprises do not go deep into the western regions such as Chongqing and Chengdu to build factories, and most of them buy land in the central region and build new factories as production bases.

Cai Lizhu of Da Chuan shoe industry said that this is related to the supply of raw materials and the support of the industrial chain.

"Yong en group has many factories in Fujian, and its industrial chain is complete. The factory in Jiangxi is just a production base, unable to purchase raw materials, and can only be pported by means of pportation. As a result, pportation is convenient to reduce logistics costs. Therefore, pportation is one of the most important factors when we choose the location.

If only a few factories go deep into Chongqing and other western areas, the supply will be very inconvenient.

She said that the relocation of other sectors of the industrial chain will depend on future development.

A manager of Kamita Hiromori also said that, like Baocheng group's factories in mainland China, more than 90% of its products were used for export, and only 10% were sold domestically, so coastal areas were more favorable for pportation and the more inland they were, the more expensive they were.

Li Peng told reporters that in Taiwan funded footwear enterprises, more than 95% of the export business is done. In the famous international sports shoes brand, at least 60%-70% products come from Taiwan funded enterprises.

For them, manpower, electricity and pportation are the three most important factors.

In the face of various unfavorable conditions, the first thing they thought of was to build factories to the central areas close to the coastal areas, so as to avoid the impact of labor shortage and inadequate factory buildings, and ensure production.

In fact, there are different voices about Taiwan's shoe enterprises moving westward.

Zhang Shuhua, chairman of the China Leather Association, said in an interview with reporters that at present, the trend of shoe enterprises to develop in Jiangxi, Hunan and other places did exist, but most of them were newly built shoe factories for processing, and there was no relocation of the whole plant. The pfer trend was not obvious.

Zhang Shuhua said that the footwear industry in the southeast coast has formed a perfect industrial chain, and raw materials are also convenient, while the central cities should have a complete industrial chain for at least 7-8 years.

Xu Rong, vice president of Fujian footwear industry association, said that they had taken some Fujian shoe companies to Jiangxi and other central cities for inspection. However, there were few enterprises that really showed their intention to set up factories in the local area.

Cai Lizhu also said that if the logistics construction is perfect, it will be possible to reduce their logistics costs.

At present, she is aware of this problem in Lichuan County, Jiangxi, and is establishing a logistics company.

In addition, Taiwanese businessmen have other concerns.

Wu Zhenchang, chairman of Chuangxin shoes industry, told reporters that he was not going to set up factories in the Midwest.

"Because there are too many uncertain factors for enterprises, for example, although there are preferential policies for processing trade policies in the central and western regions, there may be a day when banks' margin accounts will be" pferred ", and the cost of labor will also rise, and enterprises may suffer losses.

In addition, Wang Jianxin, director general of Guangdong Leather Industry Association, said that the footwear enterprises in Guangdong province tend to shift in the province now.

Because Guangdong is not rich in the whole province, there are still some economically underdeveloped areas in eastern Guangdong and North Guangdong.

Instead of building factories in other provinces, it is better to find places in Guangdong.

Zhang Shuhua believes that the relocation of shoes factories is not an easy task. It may take ten years or so to complete the pfer. This is a gradual process.