Rising Manpower Costs Once Again Engulfed Shoes And Clothing Manufacturers Profits

In 2011, the footwear industry experienced a sudden change in the market. In the first half of the year, "price increase" was the key word in the industry. However, it didn't last long. After entering the autumn, there was an unprecedented low tide in the shoe and clothing industry. The production and downtime of the footwear industry was being staged in Zhejiang. Although it is nearly a month away from the Spring Festival, many shoes and clothes in Zhejiang are still available. enterprise The annual leave has been started in advance. What causes the industry to be in such a miserable situation? How will the company survive the crisis?

In winter, shoes and clothing enterprises in Keqiao, Shaoxing, found that their electricity tariff settlement is changing. In the past, factories here turned over electricity bills on a monthly basis, but in the past two months, they had to pay electricity tariffs every 10 days. The reason for this change is that electric power companies are worried that the shoe and clothing enterprises here will suddenly collapse.

From the reporter's recent visit to the shoe and clothing enterprises in Zhejiang, shoes and clothing enterprises have experienced the sudden and abrupt changes in the market in the past year. After a short period of glory in the first half of the year, orders dropped sharply, inventory pressure was huge, labor costs rose, RMB appreciation, raw material prices fluctuated and loan interest rates increased. enterprise Forced to cut production or even stop production, a crisis in footwear industry is being staged.

Manpower costs rise and profit

Sijiqing, Hangzhou, has the name of "the first street of Chinese clothing", and the shoe and clothing industrial park surrounding Hangzhou, Xiaoshan, Keqiao, Huzhou and Shengzhou is the backing behind the reputation of Sijiqing.

Zhejiang Xiangrun Garments Co., Ltd. is a large garment manufacturer in Xiaoshan Industrial Park. Zhang Yue Quan, vice president of the company, told reporters that as an export oriented garment enterprise, the gross profit will not exceed 10% at present. Net profit will also be 4%~5%, appreciation of RMB, increase of labor cost and change of raw materials. The impact of these three will be very fatal to export garment processing enterprises.

This is not just Zhang Yuequan's own dilemma. In Zhejiang, Shaoxing, Shengzhou and Huzhou Textile and garment enterprises and other enterprises told reporters that various factors such as rising labor costs, appreciation of the renminbi, fluctuations in raw material prices and the growth of financial costs caused many enterprises to get into trouble. Among them, the impact of labor cost increase was the most. Only a year ago, some enterprises increased their wages by 20%.

Take Xiangrun garment as an example. In 2009, the average wage of the company's workers was 1900~2000 yuan / month. By the end of 2010, their average wage rose to 2600~2700 yuan / month, and the average wage of workers has increased to 3000~3100 yuan / month by the end of this year. At present, the number of workers in the company is 1800~1900, that is to say, the cost of labor alone is 20 million yuan more than that of 2009.

Even for a large garment enterprise with nearly 2000 people, 20 million yuan is by no means a fractional sum. The rise in human cost alone may eat up most or even all of their profits.

Zhejiang's largest trousers manufacturer Hangzhou Haide Clothes & Accessories Yu Xueyi, general manager of the company, told reporters: "in the domestic textile and garment processing enterprises, the annual profit is more than 30 million yuan. Take our company as an example. At present, a pair of trousers will earn 4 yuan at most, and this year's output is about 5000000, that is to say, the profit of our factory is only 20 million this year. "

It is understood that for shoes and clothing processing enterprises, fabric costs account for 70%~75% (after the rise in labor costs, raw material costs accounted for about 65%~70%). Now, the raw material cost of the market is almost the same. If the cost of the fabric increases, the price will rise, and the customers will be able to accept it. At the same time, due to the different labor costs of different enterprises, if customers increase the processing fees on the basis of rising labor costs, customers are generally difficult to accept.