Haining Leather Industry: Take Orders To Lose Money To Do &Nbsp; Look Forward To The Domestic Market Rebound.

"Apart from raw materials, the profit of a foreign trade leather garment is only 40-50 yuan, but the labor cost has risen substantially this year. The annual salary of an ordinary lathe worker will be 6-7 yuan, and it will cost more than 100 yuan for each leather garment. Now many enterprises are supporting at a loss, and expect to trade within the next half year.

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Labor costs harass Enterprises

Haining, located in the center of the northern plain of Zhejiang Province, has developed leather industry since the 90s of last century. From a place without any raw materials, it has developed to the most important leather production base and trade distribution center in China, which has more than 400 thousand square meters of China Leather City, more than 2000 leather enterprises and 73 thousand employees.

Leather industry has become one of the three pillar industries in Haining.

March and April is usually a low season for leather production.

This year is no exception. Reporters interviewed in the leather Park in the northern part of Haining city saw that the operation rate of leather enterprises in dozens of leather production enterprises was obviously not very high.

Zhejiang snow leopard Garment Co., Ltd., located in the capital Road, the first half of the year.

"At this time of year, leather enterprises in Haining will have such worries, but this year's situation is even more serious than before."

Zhu Weixiang said that many workers in leather enterprises belong to technical jobs. No one or two years' experience is very difficult. With the return of large numbers of skilled workers in the past, the newly recruited workers are not skilled in technology, so the staff gap is very large, and the capacity is also not up to date.

Many leather enterprises in Haining even pay a lot of skilled workers a salary of 6-7 yuan, which is no less than that of ordinary urban white-collar workers.

Shen Xinhua, general manager of Haining Mei Sheng Baisheng Leather Clothing Co., Ltd., said that because of the fierce competition, many foreign trade leather prices are very low, and the profit margins are even more limited. At this stage, the cost of raw materials is limited. The profit of a foreign trade fur coat is only 40-50 yuan, and that of an ordinary worker is only 600-700 pieces a year. Such a simple calculation, the cost of labor for each piece will be 100 yuan.

"Now, many companies are taking orders, many of them may be at a loss. The goal is to maintain factory operations, retain workers, and wait for the second half of the domestic market to pick up."

Shen Xinhua said.

"Acting group" engulfed profits

A lot of leather enterprises are suffering from high labor costs and low profits. A lot of headaches have been followed by many enterprises.

In the second half of last year, during the peak season of leather production in Haining, due to too many orders, the sub contractors were also very tense. A group of local people called "acting group" appeared.

They are all skilled workers in leather enterprises. They do not belong to any enterprise, but they can help the enterprises when they have heavy orders and short employment.

After finishing hundreds of orders, they will look for the next business.

The key is that their salaries will be twice as large as those of the original employees.

In Shen Xinhua's view.

Although such a "generation group" can solve the problem of orders, but the high processing fees will swallow up the original profits are not high.

"There is another problem that needs to be noticed, that is, it affects the normal labor relations of enterprises."

Shen Xinhua said that many employees will think that the same job, why their wages can be so much higher.

Moreover, the quality of these people and the level of technology need to be considered. After all, the quality of enterprises is still very important.

"There may be no way out for the" acting group ".

Shen Xinhua said that in Haining, if the order of the enterprise is really busy, the general way is to issue the contract. Thousands of leather manufacturing enterprises in Haining will have a relationship network between them, even in the peak season of production, they can also find the processing enterprises.

Transformation, from production to design

On the edge of Haining Leather City, the leather brand fashion center consisting of 72 multi-storey small single family buildings, a clubhouse, a 12 storey high-rise and a high-rise building was delivered in the first quarter of last year.

The multi-storey single family is the main body of the project. Each building arranges a brand enterprise to enter, and the single building area is between 1700-3270 square meters.

Relying on the advantages of leather city and planning, designing, building and operating according to the concept of modern headquarters business, the leather brand fashion center will create a modern leather industry headquarters business area with display sales, design and research, brand marketing and business office.

"Danba La" is the first to move into the fashion center of a number of enterprises.

Spent about 10000000 yuan from the leather park to the broad and luxurious leather city fashion center, Feng Haiming, general manager of Haining Danba fur Co. Ltd., is not just changing the environment so simple.

Feng Hai said that "Danba La" entered the fashion center not only to improve the office environment, but also from the "production economy" to the "creative economy".

Feng Hai Ming's pioneering story was already well known at that time. It started from the two sewing machine's leather clothing factory. After its operation, the small workshop grew into a leather factory, and made OEM processing for nine famous clothing enterprises such as nine posture, Ying Ying, pink Marie and so on. The output value of the enterprise was over ten million, too.

But in the Ming and Qing Dynasties, we realized that as long as sewing machines can produce leather garments, the profit margins of leather processing will be gradually reduced as the cost of raw materials and labor costs rise.

In 2004, just as the business was booming, he made an astonishing move: shutting down all production lines, specializing in two industrial links of fur design and sales.

"Garment enterprises must be separated from the pure comprehensive factory mode, which must be separated.

In this way, a part of enterprises are engaged in design, part of their production, part of them in marketing, giving full play to each enterprise's expertise, and the road of enterprises and even industries will get wider and wider.

Feng Hai Ming's idea is to adhere to the two ends of the smile curve.

It is such a persistent pformation that brings higher value-added products to Danba.

The gross profit of Danba fur increased from 8% to 12% to 20% to 30%, and individual fine goods also reached 50% gross profit.

At present, the enterprises turn from fur clothing to mink garments and take the high-end line. Danba mink garments have already ranked the top ten in the industry.

In the snow leopard dress, the earliest leather production enterprise in Haining has begun to extend to the upstream of the industrial chain. The enterprise has organized a design team of over 20 people. It has more than a thousand samples in one year, about half of which will eventually appear on the market.

And these high-end products for the benefit of enterprises is sales increase 30%~50% per year. "

In Haining, more and more leather enterprises begin to extend to the two sides of the industry "smile curve", like Danba pull, creating new core competitiveness in creativity, design and marketing.