Do Chinese Shoe Companies Really Have The Ability To Recapture Bidding Rights?

In the context of the decline in export tax rebates, the appreciation of the renminbi, and the rising production costs of labor and raw materials, where will shoe enterprises go in 2008?

Is it dead?

Or struggling on the brink of life and death?

In this regard, a Fujian shoe and hat Association, a person who did not want to be named, cautiously expressed his view. "The footwear industry will usher in an integrated year" in 2008. More people in the industry pointed out that the shoe companies will face double doors of life and death when the cost increases.

Shoe companies are at the crossroads between life and death. Since June 18, 2007, the export tax rebate rate of footwear has dropped from 13% to 11%, involving the amount of $more than 300 million of more than 130 shoe companies in the District of Fuzhou.

In this unfavorable situation, through efforts to reduce material consumption and energy consumption, save production costs, increase brand processing, and seek technical information support, in the first 11 months of 2007, 530 million pairs of goods exported to Fuzhou and 640 million yuan worth were exported, representing an increase of 15.7% and 12.1% respectively.

For the group "gratifying" figures released by the Fuzhou State Administration of inspection, the Fujian shoe and Footwear Association, who would not like to be named, still can not enjoy it. "Although exports are growing, there is no mention of changes in export profits.

It should be said that the reduction of export tax rebate and the decrease of corporate profits are more serious for enterprises.

The export contracts of enterprises were fixed at the beginning of the year, and the new export tax rebate policy was promulgated in the middle of June, and the contract can not be changed. If you sign the agreement, you must fulfill the contract, so the export enterprise profits decline is inevitable.

The export tax rebate reduction is only the tip of the iceberg of the three big mountains that shoe enterprises encounter. The change of exchange rate and the increase of production cost also clip the neck of shoe enterprises.

"The exchange rate of RMB against the US dollar appreciates every day, and the decline of corporate profits is positive.

Among them, although some enterprises will make some adjustments in export prices, this is also based on the willingness of the other party to accept it. If the other party is unwilling to accept it, it is useless for you to raise the price unilaterally.

Besides, even if the other party is willing to share part of the cost increased due to the rise in exchange rate, it will only share part of it, and it is impossible to collect all of them.

Analysts pointed out that "foreigners are also astute now, they see domestic overcapacity, in the procurement will be better than three, do everything possible to lower the price."

Not only that, but this year, the price of wages and raw materials has risen sharply, and the profits of enterprises have been greatly reduced.

"Shoe companies are at a crossroads at stake. They must adapt to changes in national policies and solve their own problems of survival and development.

At this time, brand enterprises may be able to increase corporate profits through listing financing, increasing innovation and increasing value-added products, but a large number of small and medium-sized enterprises can not achieve them through these channels, and their prospects are very severe.

Analysts say.

In fact, the shoe industry is facing a turning point, but the shoe industry is almost at the same time as the ceramic and stone industry.

Under the pressure of resource shortage, raw materials, energy prices, labor costs and so on, at the second Fujian ceramic business summit held recently, Huatai, Tengda, Xie Jin, Xie Heng Heng, Nan Ying, Huasheng and other 7 Fujian building ceramics leading enterprises joint initiative, from 2008, the price of products will be raised by around 10% on the original basis.

Earlier, in order to alleviate the pressure on the profits of some of the stone products being abolished by the export tax rebate, the stone associations and associations at all levels in Fujian decided to raise the aggregate price of stone products by 10% from January 1, 2007.

Raising prices seems to be the best prescription to ease the pressure of rising costs and curb the slide in profits.

So, can shoe enterprises follow the example of ceramic and stone enterprises to raise collective prices?

As for this idea, the Fujian footwear and Footwear Association immediately rejected it. "In fact, the proposal for collective price increases in ceramics and stone industry is entirely a show, and there is no feasibility at all."

He said that in the early 90s of last century, China's footwear industry had also launched a minimum price scheme, but because the requirements of various shoes were different, and buyers and sellers were also reluctant to give their base price up. If we went down to the enterprise survey, they would not speak to us about the business status of the entity. They would not even tell you the average unit price of an export.

In addition, the real role of industry organizations has not yet been played out (foreign trade organizations have censorship, and its role is larger than that of the government), so it is difficult to calculate the lowest price (the product color is different, the price may be different), and the final minimum price scheme is forced to abort.

"Without knowing the true cost of production, it is meaningless to make a general price limit."

Analysts pointed out sharply.

Speaking of the prospect and trend of footwear industry in 2008, the footwear industry association of Fujian province will see that the production capacity of footwear industry will continue to ferment, and the main factors affecting export of footwear enterprises such as exchange rate, labor cost, land cost and technical barriers will all be revealed. It is estimated that the footwear industry in 2008 will usher in an integrated year.

More people in the industry pointed out that the famous Qingdao double star group had sold their own "old" shoe industry to tires before long, and the situation of other small and medium-sized enterprises would be more difficult.

In the case of rising costs and no price increases, the shoe enterprises in 2008 will undoubtedly encounter two doors of life and death.