Profits Fell Sharply &Nbsp; Wenzhou Shoe Companies Had No Choice But To Leave.

On January 25th, many private entrepreneurs in Wenzhou reflected that their sales increased a lot in 2010, but profit It has dropped sharply, even worse than the financial crisis. Zhou Dewen, President of the Wenzhou Association of small and medium enterprises, said that a large number of traditional SMEs now have only 1% to 3% gross profit margins. "The pressure of survival is even bigger than that of the financial crisis.

Two years ago, during the financial crisis, many Wenzhou enterprise The sharp decline in export led to some enterprises shutting down, halting production and halting production. The situation in 2010 is different. Last year, the pressure of a large number of traditional enterprises in Wenzhou came mainly from the rising labor costs. Raw material Price increases and RMB appreciation.

In the context of inability to transform and upgrade, some enterprises can only choose to "leave the field". According to statistics from relevant departments, more than 2000 enterprises in Wenzhou were revoked business licenses in 2010, of which half were manufacturing and manufacturing related enterprises. Although this is better than the cancellation of more than 3000 companies in 2008, the "big reduction in profits" still makes the business situation grim.

Sales growth and profit decline

Zheng Chenai, chairman of the Wenzhou clothing trade association and the chairman of Zhejiang's Austrian Garments Co., Ltd., said that from 1 to November last year, the output value of more than 300 enterprises above Designated Size reached 26 billion 400 million yuan, an increase of 30% points over the same period last year, and exports increased by more than 20%. However, enterprises generally reflected that "profits have been very few".

In Wenzhou's "China Shoes Capital", a shoe leather enterprise leader pointed to a workshop, said there were 14 production lines, and now 4 have been stopped, mainly because they can not recruit workers. He said that the wages of workers were 1200 yuan / month, and now it has risen to 1500-1800 yuan / month. Even so, there are still not enough workers.

It is understood that at present, enterprises in Wenzhou are generally short of labor. Taking clothing and shoemaking enterprises as an example, there is widespread employment gap in 10%-20%, and there is no large-scale unemployment problem among migrant workers. In addition to a slight decrease in 2009, the rent of industrial housing still rose by more than 5% compared to the same period in 2010.

In addition, raw material has risen by about 20%, and the profits of Wenzhou shoe leather enterprises have dropped from the original 8% to 2% to 3% now. {page_break}

There are signs of increased tax revenue under the sharp reduction in corporate profits. A Wenzhou Industry Association official said, in order to complete the tax task, some departments require enterprises to pay taxes for the next year. "Tax burden is relatively large." The person in charge thinks that the tax burden level of Chinese enterprises is among the best in the world, which is higher than most developed countries.

In addition, energy saving, emission reduction and interest rate increase are also increasing production costs.

In mid September of last year, the relevant departments in Wenzhou monitored the operation of 129 key industrial enterprises in the city. Compared with the two quarter of the year three, only 33.3% of the enterprises' profits increased.

An industry and Commerce Department in Wenzhou analyzed that, last year, because of the rising costs, manufacturers of clothing, shoe leather and other manufacturing enterprises "increased the SLR profit" phenomenon is quite common, and affected the manufacturing enterprises related to the trade and other related enterprises, many enterprises are difficult to continue. In the enterprises whose business licenses are revoked, manufacturing and associated enterprises account for half of them. For instance, in Lucheng District, more than 300 enterprises, such as clothing, shoes and leather, and related enterprises have been revoked in more than 500 enterprises.

"When sales price is difficult to upgrade, enterprises can only bear the pressure of rising costs themselves." Wu Jianhai, founder of Cameroon China Commodity City, said that unlike the profits of manufacturing companies, his business profits were better than those of the financial crisis, but far below the level before the financial crisis. A former South African businessman said that the profit margins of clothing, shoes and caps were less than 1/10 in 2000, or even lower, because the price of goods was serious.

One phenomenon is that the Yiwu small commodity market, which is closely related to the export of Wenzhou products, also has many embarrassing situations that many private enterprises are afraid to sign orders.

New vicious circle

Asheng said helplessly, it is becoming increasingly meaningless to be an enterprise. He is considering whether to leave the sofa industry which has been in operation for many years. "Continuing to do it means waiting for death."

Zhou Dewen, President of the Wenzhou Association of small and medium enterprises, said that in the case of substantial increase in costs and sharp reduction in profits, a new round of large scale semi stoppage, stoppage or even closure of Wenzhou SMEs will probably erupt this year, even more than in 2008. At the same time, it also forced enterprises to accelerate transformation and upgrading.

"A sharp drop in profits will help promote transformation and upgrading of enterprises." Zheng Chenai said that about 30% of the garment enterprises above Designated Size, because the product positioning is relatively high-end, brand marketing is doing better, the current survival is relatively good. At the same time, about 30% of the more than 2000 garment enterprises in Wenzhou have their own production bases in the Midwest.

In the process of transformation and upgrading, some Wenzhou enterprises have chosen to enter the high-tech field, such as CHINT entering the solar energy industry, AOKANG starting biological medicine, Conch Building hepatitis B immunoglobulin project and so on.

Unfortunately, such transformation and upgrading enterprises have not sprung up in Wenzhou. On the contrary, a large number of Wenzhou enterprises focus on real estate.

Among the top 100 enterprises in Wenzhou, 2 other Real Estate Company and 6 construction companies, more than 40 other manufacturing enterprises have been involved in real estate development in 2010. Taking the enterprise as a financing platform to get a large number of bank loans and invest in real estate and other industries, this phenomenon is relatively common in Wenzhou. In addition, there are at least 7 large scale real estate development companies founded by manufacturing enterprises in Wenzhou, with a capital scale of over 3 billion yuan per household.

With the help of industrial capital, Wenzhou's housing prices and land prices are among the highest in the country. In 5-8 months last year, the average price of commercial housing in Wenzhou was about 28 thousand yuan per square meter, ranking first in all major cities in the country. At the end of November last year, the original "Wenyuan normal college" plot was taken down by the real estate and the floor price was as high as 37 thousand yuan per square meter. It is understood that the trust property is a large real estate development company founded by a number of Wenzhou manufacturing enterprises.

Thus, a clear chain of circulation is presented in front of the eyes: enterprises are hard to do - capital transfer to real estate - rising house prices - increasing costs and falling profits - it is more difficult for enterprises to do so.

"The pressure of rising costs of private enterprises should be highly concerned by the government and society." Zhou Dewen said.

Zhou Dewen said that the state should introduce policies to guide private capital investment as soon as possible, and put these policies into practice. Our new 36 article has been coming out for another year. Up to now, I haven't seen the dawn very well. So these policies, we are very much looking forward to the ministries and commissions, the local governments can come up with very good implementation rules, and can launch very good projects. But unfortunately, so far, I do not think such good news has yet appeared.