How To Avoid Exchange Rate Risk For Export Shoe Companies Under The European Debt Crisis?

　　 European debt crisis It affects the export of Fujian enterprises to the EU market. However, it is gratifying to note that many export enterprises are actively studying strategies and trying to avoid risks through various means, thereby increasing market opportunities.

Some business people disclosed that we should minimize the needs of customers and avoid them as far as possible. Euro Clearing, launching products with price competitive advantages, and introducing high-end products and special products are all good ways to cope with the increasing risk of EU market and shrinking demand in the context of the European debt crisis.

Strategy 1: the company is brainstorming.

Zheng Hongfeng, general manager of Fuzhou Hong Pu electrical and mechanical equipment Co., Ltd., said that the EU market has been affected by the "sovereign debt crisis", which has produced some unfavorable factors for the company to export to the market in a certain period of time. However, the crisis has happened, but exports still need to be carried out. Only when we change our thinking in a timely manner can the road go wider and wider.

"At every regular meeting, we are discussing new ideas vigorously. countermeasure 。 The company worked hard and brainstorming together, so many new ideas came into being, and new orders came forth again and again after "brainstorming". For example, this year's newly launched environmental protection unit iron frame packing (originally used in fumigation wooden boxes or multi-layer composite panels) was discussed in a regular meeting, and was well received by the European market. In this sense, we also want to thank the European debt crisis for giving us an opportunity to improve our resilience. Zheng Hongfeng said.

Strategy two: in-depth analysis of customer needs

Zheng Hongfeng believes that the generator set has been exported for more than 10 years. Many people feel that this product is already very mature, and there is no room for expansion. But their company does not think so. Demand is the market, and there is a market following the needs of customers, and the market is caught.

"After the European debt crisis, we have taken many measures to deal with the problem. First, we should deepen our service to customers, maximize their demand and design individually and individually tailored products to suit the needs of individual customers in different countries. For example, Denmark and Sweden in northern Europe are relatively cold. They often need to start at low temperatures below zero degrees Celsius. In this regard, our company specially added a preheating device on the unit, first heating the frozen water in the tank, then starting the power, avoiding the power lock. Another example is that the machines purchased by Greek customers are used in remote areas to add fuel and inconvenience. At the same time, the start-up time is relatively long. For this reason, we specially customize a super large fuel tank. Under normal use, it can not be refueled for ten days or half a month. The customers are very convenient and very fond of this additional component. In addition, the Irish customers need to use the "air traffic" to hoist the unit instead of using the traditional fork lift truck. We installed 2-4 rings on the top of the unit so that the customers can load and unload. There are many similar examples, but these subtle changes often increase the added value of the whole product, so that enterprises can truly achieve the competitive advantage of "people have me, people do not have me". Only in this way can the market be firmly in your hands. He said.

He also said that in response to the need for customers to find alternatives, the company also made detailed adjustments to the products. "I have a client who used to be stubborn and only buy CUMMINS, because CUMMINS is a global joint guarantee. He trusts this brand very much. Now, after I have done a detailed demand analysis for him, I recommend him to use Weifang Huafeng's domestic first-class brand. I use high power as a small power to sell this way to ensure the quality of the whole machine, for example, 120kW machine, I rated the power of 100kW, and also used in accordance with 100kW. In this way, the price can be 15%-25% cheaper. " Zheng Hongfeng said.

Strategy three: implementation of low carbon environmental protection concept

Carbon and environment-friendly solar energy is the mainstream demand in the European market at present. The company has added solar lighting components to the factory equipment, which not only gives customers more choices, but also shows the concept of low carbon and environmental protection of their products; two, it focuses on the promotion of the Holland market; on the one hand, Holland is China's fourth largest trading partner after Germany, Britain and France; on the other hand, Holland's economy is also a typical export-oriented economy, and it is a trade hub for Western Europe. Many goods exported to the EU market can be distributed to other neighboring European Union members through the developed logistics of Holland, so Holland is also an important commodity distributing center in China. In addition to refining the needs of customers, the company has taken two other measures: first, combining low carbon environmental protection concept and low discovery.

Strategy four: avoid Euro settlement

Miss Shen, the manager of a foreign trade company in Quanzhou, believes that because the fluctuation of the euro exchange rate is too large, it is best to persuade them to adopt the US dollar settlement and avoid settlement in euros when negotiating payment with EU customers.

She believes that although the renminbi is also appreciating against the US dollar, in the current situation, its appreciation is smaller and slower, and it is easy to predict the appreciation in the coming months. However, after the outbreak of the European debt crisis, the euro exchange rate is impermeable and invisible, and the renminbi is passive appreciation of the euro. Under such circumstances, the risk of US dollar settlement is much lower than that settled in euros. Therefore, we should try our best to persuade customers to settle accounts in US dollars in order to better control risks and avoid risks.

"If the customer must ask for settlement in euros, then the enterprise must make a conservative prediction of the future Euro exchange rate when it quotes, and increase the price of the product, and the space to increase the price is enough to withstand the fluctuation of the exchange rate." Miss Shen said.

Quanzhou Sanli locomotive company said that although the products exported to the European market accounted for 20% of the total export share of the company, however, because the orders of enterprises were signed before the debt crisis, the impact of the falling euro on their enterprises would not be too obvious. Moreover, their branch offices in Europe have also eased the pressure of exchange rate to a certain extent.

According to the relevant personages from Sanli company, the change of the exchange rate of the euro will have a greater impact on the export enterprises that take short-term orders, especially the large number of shoe and clothing enterprises in Quanzhou. The larger proportion of them exporting to Europe may be affected by the crisis. "Because the enterprise receives short-term orders, it is a single to follow a single, no long-term agreement, exchange rate changes, today and tomorrow will talk about the price difference, enterprises are faced with either a backlog or shipping loss dilemma." The person said that if the enterprise is a long-term order, both parties have agreed in advance or signed a contract, even if the exchange rate changes, will not be affected. He said that if the European debt crisis continues to spread, businesses will have to revisit new terms, and their company intends to modify the type of settlement currency and prepare to settle it in Renminbi.

Strategy five: clever use of financial derivatives

For the current sharp fluctuations in the euro exchange rate, it is more difficult for export companies to effectively avoid exchange rate risk only by adopting conventional hedging methods. Some bankers suggested that in order to effectively avoid direct economic losses caused by exchange rate fluctuations, export enterprises should actively use various financial derivatives in modern international market to hedge and hedge in the short and medium term. This person introduced the following channels for export enterprises to avoid foreign exchange risks.

Foreign exchange futures futures trading is a standard combination spanaction between the two parties that the two parties agree to exchange one currency for another currency at a certain time in the future. It refers to futures contracts based on exchange rate, which are used to avoid exchange rate risk. It is the earliest variety in financial futures. Since the launch of the first foreign exchange futures contract in the international monetary market segment of the Chicago Mercantile Exchange in May 1972, with the development of international trade and the acceleration of the integration process of the world economy, foreign exchange futures trading has maintained a strong momentum of development. It not only provides an effective hedging tool for investors and financial institutions, but also provides new means of profit for arbitrators and speculators.

Foreign exchange option is the most widely used tool in the international foreign exchange market. It can not only avoid exchange rate risks, but also make investors profitable. Foreign exchange options are divided into call and sell options. The characteristics of call options are that they can lock risks. If they pay a premium first, there will be no risk at all, and the proceeds can be infinite. The characteristics of the options are that the proceeds are fixed, and the risk is infinite, that is, the exposure risk. The use of foreign exchange option tools will enable enterprises to avoid risks arising from receivable or foreign exchange receivables.

Forwards, forwards and forwards, forward foreign exchange spanactions are easy to operate and relatively mature hedge derivatives. A considerable number of foreign trade enterprises in China have also carried out beneficial practice, which is feasible and practical.

Foreign exchange swap is a form of spanaction between the two sides of the agreement that they will exchange some kind of assets at a certain time in the future. There are many kinds of swap, and foreign exchange swap is only one of them. That is, holding a risk at the same time, reverse operation to eliminate the existing risks. In fact, the foreign exchange swap consists of two spanactions, an immediate deal, a forward spanaction, and two spanactions occurring in the same period, with the same amount, but the opposite direction. China's central bank has made special requests for foreign exchange swap spanactions, and the relevant commercial banks have already launched this business, but at present, they are restricted by various factors, and the scale of spanactions is small, and the use of enterprises is not extensive.

In recent years, due to the increasingly fierce competition among export enterprises and the longer receipt time, trade finance urgently needs to solve the cash flow problem between export shipment and foreign exchange recovery period. Trade financing can better solve the capital turnover problem of foreign trade enterprises. Through short-term trade financing such as export bills, export enterprises can obtain funds from banks in advance to solve the problem of capital turnover effectively. At the same time, enterprises can also lock in the amount of foreign exchange receipts in advance and avoid the risk of RMB exchange rate fluctuations.

Besides, the cost of trade financing is relatively low.