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Raw Materials Prices Soar, Sichuan Leather Industry Is Difficult To Cope With

2010/7/29 10:55:00 40

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Soaring raw material prices

According to industry sources, Sichuan is rich in pigskin resources, and about 60 million pieces of pig skins are exported each year. About half of them are exported to other provinces. There are dozens of leather making enterprises in Sichuan, of which 13 are on the upper scale, 15 million to 20 million for garment leather, about ten million for sofa leather, and about ten million for leather shoes.

According to rough statistics, the export of Sichuan pigskin garment leather reaches US $about sixty million a year, which is an important force for Sichuan's export earnings.

In the past, the price of pork in Sichuan has been lower than the price of pig skin. A pig skinning can increase by about 35 yuan. In the 80s and 90s of last century, the Sichuan provincial government had formulated a policy of stripping a pig skin for 15 yuan in order to encourage pig killing to peel. Later, with the gradual promotion of pig killing and peeling, the reward amount was reduced year by year until it was canceled.

However, due to the recent rise in pork prices, the price of meat is higher than that of pig skins, and peeling is no longer cost-effective, resulting in a significant reduction in the rate of pig skin peeling and stripping of slaughtering and processing enterprises.

The rate of pigskin stripping is greatly reduced.

Skin source

Zhang Zhengshu, deputy general manager of Fubang leather, told the author: at the beginning of the year, a piece of raw leather was about 60 yuan, which rose to 100 yuan in the second half of the year, and the trend of price rise did not seem to stop.

Raw material

The surge in prices has caused a certain impact on the leather industry in Sichuan, and leather enterprises have reduced production to reduce losses.

Compared with last year, the production capacity of leather industry in Sichuan will be reduced by 20% to 30% this year. If the situation continues to continue like this, the soaring cost will bring a fatal blow to enterprises.

The reason is very simple. Since tanning enterprises can not improve the price of finished leather, the more enterprises produce, the more losses they will make.

Downstream industries are implicated

Face

Raw material

Prices are soaring, big factories are still struggling to support them, but the days of small and medium-sized enterprises are sad.

Tannery enterprises are in a difficult situation, and the downstream garment enterprises are suffering all the same.

Sichuan Xingsheng leather products Co., Ltd. is the largest leather garment manufacturer in Sichuan. At the most time, it has about five hundred thousand leather products, all exported to the European and American markets.

Wang Bingquan, chairman of the company, said: "pig skins used to be 62 yuan to 64 yuan per square meter in the past, now 80 yuan to 82 yuan, and the pig's fleece skin has been from 68 yuan to 70 yuan per square meter in the past. Now 87 yuan to 90 yuan, or nearly 30%, foreign customers will not raise their quotations due to the increase of our production costs, resulting in the difficulty of leather products enterprises receiving orders."

What's more, the contracts for leather goods enterprises and foreign customers are generally 3 to 6 months ahead of schedule. At the end of last year, the majority of enterprises did not anticipate that the price of pig skin would go up sharply this year.

The original profit is very thin, which can withstand the soaring of raw materials? "However, the order with foreign customers has been signed, you do not do others do not say that you are not honest, find your claim; if you do it, you have to accept the loss, it is really in a dilemma."

Wang Bingqian said.

Sichuan is a large province of pig production. Sichuan pig skin is not only abundant in quantity, but also of high quality, which is comparable to sheep skin.

At the same time, Sichuan has a high level of leather technology.

As a result, Sichuan leather and its products enjoy a high reputation in the domestic and international markets. Wang Bingquan told the author: "foreign trade orders are named Chuan Chuan, and in the top European and American fashion brands market, Sichuan leather is also firmly occupied."

Seek self-help and thirst for help.

Despite the grim situation, Sichuan leather enterprises have been tested by the baptism of earthquakes and the rising price of raw materials. Many enterprises that survive have already been able to withstand pressure and help themselves. Faced with the current situation, many enterprises have started a new round of self-help.

Many enterprises began to seek new development direction and trend, pay close attention to quality, and begin to take the road of brand marketing.

Some enterprises believe that the leather products they produce are not inferior to some famous brand products, but the prices on the market are far different. This is mainly because the products they produce are not brand names, and many enterprises even benefit from the OEM production.

While saving themselves, leather enterprises also want the support of the government to help them tide over difficulties. This is the consensus of Sichuan leather enterprises.

According to enterprises, besides the soaring price of pig skin this year, there are also rising labor costs, rising hydropower prices, rising bank lending rates and * cancellation of export tax rebates, which has led to a substantial increase in production costs.

They suggested that local governments should give special preferential policies to the leather products industry in terms of financial subsidies and taxes.

In addition, because the leather industry is liable to cause pollution, the government is very strict in approving tanning enterprises. Enterprises that have been approved to enter the leather making industry are invested heavily in environmental protection. Once they collapse, it will be difficult to revive. If leather enterprises are to survive, they will need help from the government in addition to their efforts.