Under Pressure Of Multiple Pressures, Export Shoes Enterprises Are Undergoing Transformation (2)

Wang Jianfei, the Guizhou people, as the leader of the three workshop of the shoe factory, is leading several workers to "replenish the goods". "When the production line is damaged, people need replenishment." Wang Jianfei has been in the factory for 4 years, and his workshop is probably the largest number of factories in the factory.

"To build a pair of boots, according to about 10 yuan per piece fee, 30 people's team average, each person can get more than 2000 yuan per month." Wang Jianfei said that skilled workers can get more.

In these workers, it is easy to hear accents from Hunan and Hubei. Gao Jiang Lei, a Hunan native, has already been competent. "Before and after the Spring Festival, there are 50 yuan to 90 yuan reward for introducing workers to work in the countryside."

For them, the better news is that in May, the notice on adjusting the minimum wage standard for workers and staff in Guangdong province came into effect, and the minimum wage of workers was raised to 920 yuan per month.

But for Zhang Huarong, President of Huabao shoe company Huajian group, this is no small pressure. According to the average wage of 1800 yuan per worker per worker, the cost of labor will increase by about 17%. Taking 300 factories as an example, enterprises should pay 90 thousand yuan a month and 1 million 80 thousand yuan a year. The annual export volume of Huabao shoe factory is about 91 million 260 thousand dollars.

"The factory's electricity, material costs, maintenance of machinery costs, factory rents are all essential." Zhang Huarong said there are countless bills, including transportation, telephone, office, communication, development, interest, travel and business taxes. All this will be counted in the order.

A pair of ordinary women's shoes exported to Warburg footwear industry converted into US dollars. From 2006 to 2008, raw materials increased from 10.05 US dollars to US $10.85, and labor cost rose from $2.23 to US $3.3. Hydropower and transportation cost increased from 0.18 US dollars to 0.23 US dollars. Although the comprehensive cost of office consumables decreased by 0.32 US dollars, the export unit price rose from 15 US dollars to 16.2 US dollars, and the gross profit of a pair of shoes dropped from 1.1 US dollars to 0.7 dollars.

The continued appreciation of the renminbi, which began in 2005, has reduced gross profit by 0.29 US dollars, and the state has reduced the export tax rebates for footwear products by 0.3 US dollars. Finally, the pre tax profits earned by enterprises dropped from US $1.2 in 2006 to US $0.21 in the first half of 2008.

"Slightly smaller business profits may be less than 5%." Zhang Huarong, who has made shoes for 14 years, is very clear about the present situation of Chinese foundry shoe factories. His Warburg footwear industry accounted for nearly 95% of the total, and the highest profit was less than 10%.

So is the socks industry. Ningbo Tonghui international trade company is mainly engaged in the export trade of socks. In recent years, although the cost has increased, the price of socks has changed little. In 2000, 50% of the profits can be achieved, and now it can be kept at 5%.

At the moment, Gui Mingjun, the general manager, is most impressed by the rise in labor costs: "now the main force of the workers is 90. They have different labor concepts with the older generation. For example, our factory now offers free accommodation, and the hostel has high-power air conditioners, with a monthly salary of more than 4000 yuan, but it still doesn't attract people."

Even so, large orders are still the guarantee for factories to maintain stable profits for enterprises. "Americans can spend seven or eight pairs of women in a year, and Europeans can spend five or six pairs, but there are no more than two pairs in China." Zhang Huarong said.

Brown footwear is the largest in the US. Shoe Retailers One of them is Naturalizer, and many other brands. Its wholly owned subsidiary, Li Wei trade, is next door to Warburg shoe factory and is also one of Warburg's partners. Among the top 50 internationally renowned brands in the world, 15 women's shoes are handed over to Warburg shoe factory.

In fact, although the recent minimum wage adjustment has put some pressure on Zhang Huarong, China's manufacturing industry has only 3% of its salary. The US Bureau of Labor Statistics (BLS) found that manufacturing wages in Norway were 2.8 times that of the US in 2007. In 10 countries in Canada, Australia and 12 Western European countries surveyed, manufacturing wages are higher than those in the United States - the salaries of these major export countries and regions are much higher than those of China.

In Zhang Huarong's A shoe factory Labor and R & D costs account for only 15% of the total cost. The largest share of the cost is 55% of material costs and 20% to 25% of all taxes and fees.

From the point of view of logistics, export products only need to transport products to the port, and the chamber of Commerce will do the rest. However, the domestic product takes the transportation route of Railways and highways. Taking Guangzhou to Beijing as an example, if the toll is charged at 0.5 yuan per kilometre, the cost of the expressway will be at least over 1000 yuan.

According to the figures released by the world bank, the logistics cost of the United States accounts for about 9% of the total GDP, while China's logistics cost accounts for 25% of the total GDP, accounting for 30% to 40% of the total cost. In addition, the expenses generated by the construction channel are far greater than those for the export oriented enterprises.

For manufacturers who are still sticking to export sales, there are government export tax rebates to ensure that they still have room for profit after lowering prices. The adjustment of export tax rebate policy in 2007 has brought a lot of pressure to Huabao shoe industry. "The tax rebate from 13% to 11% is equal to the lack of subsidies for enterprises to earn foreign exchange through exports." Zhang Huarong said.

In June this year, China adjusted the export tax rebate rate for industries such as steel, nonferrous metals and chemical products, and the textile industry did not make any adjustments. The current rate of shoe material in China is about 15%. "Many shoe factories rely on this survival." Qi Yaochang, chairman of Dongguan Yisheng footwear industry, said that when there is a certain profit margin, they are more willing to export their products abroad, though they have to bear some additional risks.

Over the years, factories that are trying to ensure their profit margins have been supplying goods to WAL-MART.

Manufacturers or traders pay certain Cost To enter WAL-MART's monitoring system for products, but most factory owners are unwilling to do so. For them, selling products is the most important thing. "Sometimes the factory may not even know the partners, not to mention where the products will go." Zou Hongjie, regional sales director of Guangzhou Maple Trading Co., Ltd.

Since March, WAL-MART has launched a new round of price fixing promotional activities (Rollback) in the United States. According to Citigroup analyst Deborah Wayans Wei Ge statistics, the initial launch of more than 10000 promotional products price reduction of 20.5%.

The orange logo on sale is increasing continuously, and by June, the total number of products participating in the promotional activities has reached more than 50 thousand. The $8.88 memory sponge pillow dropped to $6, which was enough to buy a super value package at McDonald's, and a 22 inch flat LCD TV for $268 to $198. In addition to Rollback, there are seasonal clothing and footwear. The printed T-shirt has been reduced to 1 dollars, and the python flat bottom shoes have been reduced to 6 dollars.

The long term undervaluation of the renminbi has enabled traders such as WAL-MART to have a strong bargaining power with us dollar pricing. "Moreover, taxes and fees abroad are not as numerous as those in China." Dongguan is now the leather shoes industry Association vice chairman of the silver Sheng footwear industry chairman Qi Yaochang said.

Therefore, although the prices of these commodities are low enough, the profit margins purchased by foreign traders from China are still very high. Take a pair of shoes with a profit margin of 30 dollars as an example: R & D and traders can earn 10 dollars, terminal channels earn 5 dollars, and workers and raw materials can only split the remaining $5.