Faced With Numerous Difficulties, Shoe Enterprises Support The "Balance Bar".

Editor's note: at the beginning of this year, when Premier Wen said that this year was probably the most difficult year for the Chinese economy, most people only understood it as a sense of hardship of a great power premier.

However, in the past half a year, I believe many people have changed their minds.

Take the export trade as an example, the continued appreciation of the renminbi, the rise in prices of raw materials, the economic weakness in the US subprime mortgage market and the shrinking consumer market, such as the US and Europe, all make many export enterprises face unprecedented challenges.

Since July, the central high level has concentrated on the export oriented export-oriented provinces, covering all parts of Zhejiang, Guangdong, Jiangsu and Shandong.

On July 8th, 10 and 11, the State Council held three informal Symposium on economic situation and listened to the opinions and suggestions from all walks of life.

Similarly, as an export-oriented Province, what is the fate of Fujian's export-oriented enterprises?

How did they overcome difficulties and break through quickly and seek greater development?

What are the conditions for the government departments and financial departments at all levels to break out of the enterprises?

Core tips

The cost of raw materials is rising, the exchange rate risk is aggravated, the financing is difficult, the trade is closely guarded, and the economic environment at home and abroad is not clear.

Like almost all of the southern Fujian footwear and clothing industry executives, Chen Guocheng can talk about the "five difficulties".

Chen Guocheng, deputy general manager of Fujian Green group, has been operating for many years in children's clothing trade. He can't remember how many small and medium-sized political and business seminars he participated in. Even when he was chatting with tea, local bosses were talking about how to subtract the "five big difficulties" and seek to "dance without shackles" on the balance between export and domestic sales.

Quanzhou's economic analysis in the first half of this year will reveal that the fundamentals of Quanzhou's exports remain good, but the problem can not be underestimated, including the shoe and garment enterprises, which occupy nearly 100 key enterprises in Quanzhou, and the export growth is low. The export growth rate is 10% lower than the average growth level of the whole city.

Nevertheless, Minnan boss is more willing to see it as a "shuffle before dawn".

Unlike the collapse of Dongguan's enterprises after losing money, the South Fujian enterprises, known for their love to fight and win, have already embarked on the path of upgrading and pformation.

Breakout and sample

Two years ago, the proportion of domestic exports was adjusted.

Green group is located in the urban area of Quanzhou, and has been exporting to the foreign trade for 16 years.

On the morning of July 26th, though it was Saturday, the workshop was busy, with workers working before all the machines.

"Cold current is not terrible, the key lies in the enterprise's coping strategies."

Chen Guocheng, deputy general manager of the group, did not shy away from the current predicament of textile and clothing exports. The "five difficulties" increased the cost by more than 20%, and the net profit of exports dropped sharply, far below 5%, sometimes even negative profits. The first half of the year's foreign trade earnings also showed zero growth for the first time. "In the 2/8 theory, 20% of the garment export industry lived well, and the remaining 80% were mostly small and medium-sized enterprises, which is still very difficult at present."

Chen Guocheng believes that this year's difficulties are even more serious than imagined. "We dare not take orders more. Foreign trade is mostly settled in US dollars. The exchange rate is expected to go down, and profits will go down."

More clothing exporters began to fear orders.

"Customers can not do it, I have to think, can only pick high quality customers quality orders, otherwise you have to bear the loss of the risk."

Chen Guocheng said.

According to his 2/8 theory, Green belonged to the "2" which was "fairly alive" in the locals. As early as two years ago, the clothing export industry was on the decline. The proportion of exports and domestic sales began to adjust, and the output value of domestic and foreign products changed from the original 3 to 7 to 4.5: 5.5 today.

"The situation is more severe in the second half of the year, and we want to change it to 5: 5."

According to Zhao Jianhe, chairman of Green group, "2" is commendable. It depends on the keen market insight of the enterprise. The RMB appreciation, labor force and upstream materials can be expected. "After the strategic adjustment, the list of foreign trade has been refined to ensure profits, and domestic sales have expanded year by year, from several million yuan to 2 hundred million now."

The problem solving method is exemplary.

In addition to decisive pformation and laying of channels, Zhao Jianhe has more chances to win. He has expanded the field of foreign trade to countries outside Europe and the United States, such as Kazakhstan, Turkey and South Africa. "There are fewer trade barriers, higher orders profits, shorter settling time, and more inventory of goods."

And the Green fourth branch, which is under construction, is also preparing to take advantage of the depreciation of the US dollar and introduce a lot of foreign advanced technology and machinery and equipment.

In fact, in the Quanzhou area, there are many enterprises that adjust the proportion of exports and domestic sales as well as Green group.

"Just adjust the time and strength needed, some enterprises adjust and pfer, and finally lose a lot of money and close the door."

Local industry people, Mr. Kang said, the industry's profit remained at 10%, which was pretty good, but the cost rose and the profit fell. The exchange rate at the time of settlement could not be predicted, and the single half of the year did not dare to answer. The problems encountered by Green group were universal in the shoe and clothing industry of Southern Fujian, but the way to solve the problem was still respected, with sample demonstration.

Breakout and difficulty

Raw materials rise to the biggest pressure on Enterprises

Clothing and footwear are the pillar industries of Quanzhou's foreign trade. Last year's footwear exports exceeded US $2 billion 400 million. After Dongguan, they ranked second in China.

"The shoe industry is more difficult than the clothing industry."

A number of well-known shoe factories in Dongguan told reporters that, unlike the collapse of a large number of enterprises in Quanzhou, the enterprises in Hong Kong were rooted in the mainland. "Face saving, do not give up lightly, do not walk away like foreign companies, but the plight has become a consensus among governments and enterprises".

Take Jinjiang, the largest footwear industry base in China, for example, there are more than 3000 sports shoe companies, of which over 80% are export oriented enterprises, accounting for 40% of the market share and 20% of the global market.

However, official sources said that in the first quarter of this year, a total of 12832 batches and 106 million 850 thousand pairs of export footwear products were tested, down 12.12% and 0.42% respectively from the same period last year.

According to the analysis of the industry, the reason why batches are slippery is that profits are low and SMEs are afraid to take orders for export. While the total export volume is dropping slightly, it shows that Anta, XTEP and Jordan are among the most famous enterprises, supporting the fundamentals of the "shoe price inflation" of the footwear industry in the whole city.

In the middle of this month's Jinjiang economic operation analysis meeting, Yang Yimin, member of the Standing Committee of the Quanzhou Municipal Committee and Secretary of the Jinjiang Municipal Committee of the CPC, also admitted that there were 12 pressures. The 6 pressure came from the international market. The 6 pressure came from China and squeezed the profits of Jinjiang enterprises.

"The biggest pressure is the rise of raw materials, the fierceness of the situation, and squeezing profits at once."

Ding, a senior shoe manufacturer in Chen Dai Town, told reporters that last year, the cost of raw materials and accessories for shoes was dreadful. Packaging fees rose more than 30%, shoe soles increased by 20%, and labor cost increased by 20%. "Export orders, foreigners have pricing power, and we want to raise prices, but they are all very difficult."

Turning domestic sales from scratch is not difficult.

At present, the local shoe foundry export enterprises, on average, have only 10% gross margin and lower net interest rate.

Many shoe factory executives ridicule, "orders, before everyone grabbed, the situation has changed, and now we lose money."

In addition, the local upstream industry shoe mechanism manufacturing industry has also been greatly reduced due to the rise of steel products and the purchasing power of downstream shoe factories.

People in charge of the local foreign trade department admits that the small and medium sized shoe enterprises are low on the low added value. The situation of "zero profits" and "negative profits" in an order is not uncommon. They want to be converted into domestic sales, but brands and channels need to be laid.

The difference between small shoe companies and "shoemaking in the winter" is that Anta management has recently completed orders for the first three quarters of this year, with orders rising by 50%. In view of the rising cost of raw materials, the company is considering raising the unit price by no more than 10%.

A number of well-known shoe enterprises including Anta said that the impact has made Chinese manufacturing industry suffer, but private brand enterprises have not suffered a great deal. The core competitiveness of brand value will produce the advantages of manufacturing costs and channels.

Although the media had many rumors about the failure of Jinjiang shoe enterprises, the Ministry of Commerce sent two research teams to Jinjiang last month, but finally reached a moderate conclusion: Jinjiang's footwear industry is facing more severe challenges, but it still maintains a steady growth trend.

Breakthrough measures

More entrepreneurs seek to "embrace the group"

"Smart South Fujian people are already breaking through, seeking" beautiful turn. "

A person from the shoe industry association of Quanzhou told reporters.

On the 21 th of this month, the chamber of Commerce organized a seminar on shoe industry upgrading. Many Quanzhou shoemaking enterprises and associated enterprises from the upstream and downstream of the industrial chain gathered together to explore solutions.

A person attending the meeting said that at the seminar, manufacturers in the middle part of the industrial chain issued a call for price increases. However, the manufacturers of finished shoes introduced the difficult situation of difficulty in digesting and pferring the pressure of rising prices.

Ding Youyi, chairman of the WorldCom footwear industry in Jinjiang, for example, at the beginning of the year, there were shoe companies asking for price increases to foreign buyers such as WAL-MART, but the other party definitely said no.

The cruelty and necessity of the industry reshuffle is the consensus at the meeting. More entrepreneurs are concerned about the "tug of war".

For example, we should set up overseas sales subsidiaries and large orders to integrate the upstream and downstream enterprises of the industrial chain.

However, under the negative factors that the EU may extend the implementation period of "anti-dumping measures", "tug of war is more successful."

In addition to the external environment, shoe enterprises and garment enterprises are just as urgent as they are to expand domestic sales.

Green group vice president Chen Guocheng revealed that domestic sales are more difficult than foreign trade, and there is no strategy and no money. Only terminal channels are laid. A store with 500 thousand yuan is not enough. 100 are not many, but money is tight. Enterprises can not borrow money. The investment of 50 million yuan is too difficult for small and medium-sized enterprises.

And more risk is that domestic sales have increased, and the research and development of enterprises should keep up with the development and management, otherwise the added value will be low.

Setting up corporate loan guarantee institutions

"Financing is a big problem." the president of many local shoe and clothing enterprises said that the central bank's seven interest rate increase has made the enterprises feel pressure. Now that money is hard to borrow, enterprises have to cut costs. Many CEOs are obviously "more low-key" than before.

Reporters learned that the small and medium-sized enterprises loan guarantee institutions jointly established by several large enterprises, including seven wolves, have entered the operation or preparatory stage.

In addition, the government is also considering guiding listed companies to inject funds into high-quality capital enterprises and bright future construction projects so as to dredge financing channels.

There are still more highlights in breakout. Some enterprises go to Guangdong to undertake the large number of high-end orders which are still short of production capacity after the relocation of the local enterprises; some pfer the production base to the low labor cost areas; some small and medium-sized enterprises have become the supporting workshops of large enterprises in the form of equity participation and so on, and their operational risks have been reduced.

In the interview of Quanzhou, many industry associations also optimistic about the development potential of footwear industry.

These people say that shoes and clothing are labor-intensive industries and high technology and high added value industries. By shuffling the cards, they will reintegrate a more powerful industrial chain to enhance the competitiveness of the whole region.

This year, including Quanzhou and various counties and cities, many measures have been taken to solve the difficulties in the industry.

Jinjiang mayor Li Jianhui's remarks at the beginning of this month made the industry executives feel gratified: as a traditional labor-intensive industry, sooner or later, we will face pformation and reshuffle, but this year's situation is more fierce than we expected. In this test, I think the government should have a bigger role. It should strengthen interaction with enterprises and jointly cope with difficulties.