China'S Shoe And Leather Industry Is Facing A Shuffling Stage. Industry Investment Needs To Be Cautious.

At present, leather and footwear industries are in the shuffle stage. In the first half of the year, the cost of raw materials has increased, while the export unit price has declined, and the industry profits have declined. In the next few years, China's shoe and leather industry is still facing great challenges.

The current situation of leather making enterprises is very difficult.

The unpredictable situation of the national policy, the pressure of environmental protection, the predicament of the market and the rising cost will make the tanning enterprises swaying in the predicament.

Bank related financial institutions should be vigilant in investing in the industry and avoid investment risks in time.

The import and export profits of the industry declined, and the number of imported raw leather was 329 thousand tons, down 4.7% compared to the same period last year. The amount was 610 million US dollars, up 7.4% over the same period last year.

In the first half of the year, the number of imported raw fur was 14 thousand tons, down 9.5% compared to the same period last year. The amount was 90 million dollars, up 20% from the same period last year.

Such data indicate that the price of raw hide and raw fur increased substantially in the first half of the year, and the cost of raw materials increased.

On the contrary, the export volume of fur garments, clothing accessories and other products in China was 5 thousand tons, up 6.8% over the same period last year, and the export volume was 220 million US dollars, down 35.6% from the same period last year.

In the case of sales growth, sales revenue declined, indicating that the unit price of finished products declined and industry profits declined.

The number of leather garments exported in the first half of this year was 10 million, down 29.2% from the same period last year, and the export amount was 400 million US dollars, down 37.8% from the same period last year.

Domestic leather clothing exports have been in a doldrums in recent years.

Such a situation has a certain relationship with the recession of the leather clothing market. Besides, it is directly related to the quality, design, brand and market development of domestic leather garment enterprises.

Policy risk is exacerbated by the export of domestic fur industry.

China's fur industry has just adapted to the rectification and clearance policy of Russia's main battlefield, and has also met the adjustment of the state's export tax rebate.

The export rebate rate of leather and fur products decreased from 13% to 5%, making the domestic fur industry worse and worse, bringing new challenges to enterprises.

The development of fur industry is very bad this year, and many enterprises have already stopped production.

In addition, the increase of the RMB exchange rate has made the fur export enterprises suffer more losses in the process of settlement of foreign exchange.

As an industry that takes agricultural and livestock products as the main raw material, it thought that the state would support the fur industry, encourage the development of animal husbandry, and support the related industries of deep processing of agricultural products. However, the reduction of export tax rebate rate has greatly affected fur manufacturing enterprises.

The export tax rebate rate lowered in July 1st will have a greater impact on the construction of leather, clothing, shoes, sporting goods and other industries. The tax rebate has not been set up for a pitional period, and has not yet fulfilled the contract business and has suffered heavy losses.

The export growth rate has dropped markedly. The structural adjustment of the new export tax rebate rate is relatively large, and the adjustment range is different.

The most affected industries are leather clothing, hardware and chemical industries. The export tax rebate has been reduced by more than 8 points. The export of general trade mode in these industries will be seriously affected, and directly lead to the loss of competitive advantages such as neighboring countries.

From 1 to April, the export value of China's leather industry's main commodities was US $7 billion 120 million, an increase of 5.8% over the same period last year.

Except for leather clothing, fur clothing, foot basket volleyball, semi-finished leather and finished leather, all the other major commodities have increased to varying degrees on the same period.

Before the import and export of leather as "processing trade", raw materials import is not taxed, export is not tax rebate, enterprises have no tariff burden.

However, this preferential policy for processing trade was abolished. Leather import and export began to be taxed according to the general normal trade tariff.

For leather semi-finished products, 5%-14% duty and 17% value-added tax are needed, so the export cost of leather products is increased.

The export tax rebate rate of footwear products has been pferred from 13% to 9%, and the export tax rebates for leather and other leather products have almost been abolished.

In Shandong, leather enterprises are mostly materials processing enterprises. The average profit rate of the whole industry is only about 4%. Reducing or abolishing the export tax rebate rate has the greatest impact on the leather industry export.

The export of leather industry will be reduced sharply, and enterprises lacking superiority will therefore be "closed".

At present, the rising price of raw materials has become one of the bottlenecks in the development of many industries, which affects the normal operation of enterprises and increases the instability of operations.

China's leather enterprises are also facing this kind of business crisis.

In the short term, the trend of rising prices of raw materials is difficult to reverse. The ability to control cost is one of the main elements of competitiveness.

If we want to maintain stable profits and offset the increase in the cost of raw material prices, one way is to save the cost of production in other aspects of enterprises, and the other way is to pfer the cost brought by the rising prices of raw materials.

Leather enterprises have many difficulties in pferring costs to downstream industries through raising prices. The market structure of leather industry determines that leather enterprises do not have the pricing power, and the market has strong pricing power.

The disadvantage of small and medium-sized leather enterprises in this raw material crisis is obvious. The risk of small and medium-sized leather enterprises has increased recently. Therefore, commercial banks should avoid giving credit to them in order to avoid risks.

CICC analysts recommend the following measures: strengthening pre loan review.

Before issuing loans, the banks carefully scrutiny the creditworthiness of the lender and the guarantor, and try to choose large, strong and good credit enterprises as the target customers of loans. We should have a detailed understanding of the market and product operation of the enterprises, and judge the size of the business risks according to the EU's policies.

Ways and means of guarantee are increased.

It is suggested that the shareholders of the decoration company should be provided with the credit guarantee for the borrower, or the mortgage guarantee or pledge guarantee with the shareholders' assets, so as to ensure the maximum payment when the risk arises.

Making use of the existing credit system.

Using the internal credit control system that banks already have, we should understand the borrowers' existing loans before lending, and try to disperse the risk of loans and prevent the concentration of risks.