Strategic Shift Of Dongguan Shoe Enterprises And Future Market In Southwest China

There is good news for factories in Dongguan. They do not need to worry about the summer peak blackouts.

Public information shows that the peak time of industrial customers in Dongguan this year is "opening six stops one", far less than last year's "open four stop three".

But there is also a bad news. Factory orders are only 1/3 last year, and profits have dropped by nearly 30%. Because orders are too small, the Yongsheng shoe factory, which has a history of more than 25 years, will be closed in August.

Affected by the international market, the "world factory" Dongguan economy bears the brunt: the GDP growth rate in the first quarter is 1.3%, which is the bottom of Guangdong province.

After the financial crisis in 2008, Dongguan's processing export business has once again come to a stormy road.

Sluice limit power reduction

Dongguan Yongsheng

The flow of people is scarce every day.

A month later, people will no longer see the people wearing the coat of "Yongsheng" in the street.

This is a shoe factory which covers an area of nearly two football fields and employs up to 7000 people.

"There are only more than 500 people left now."

The doorman who worked here for more than ten years told reporters, "the director has decided to turn it off in August this year."

Yongsheng shoe factory gate hung a huge "factory rental" advertising, this reporter in Dongguan three Tun Industrial Area visit found that such factory rent ads everywhere.

Some recruitment sites are also unattended.

Du Kui, a staff member of the labor market in Houjie, told reporters that recruitment was so difficult that the labor market had to cancel intermediary fees to attract workers.

Until reporters left, he only recruited 2 workers, and "finally enter the factory or not."

"Now in Dongguan.

Are suffering. "

Zhang Hong, vice chairman of Dongguan world footwear industry base, told the newspaper that "before the profits were high enough to make enough money, when the profits fell sharply, they did not want to do it."

This year, thanks to the international market, Dongguan's economy has once again bottomed out.

Public information shows that in February this year, Dongguan's industrial added value of above scale grew by -12.5% compared to March, -1.6% in March, and -0.9% in April.

In terms of industrial electricity consumption, Dongguan's industrial electricity consumption decreased by 6.4% in January compared with the same period last year. In the 1~5 months of this year, Dongguan's industrial electricity consumption decreased by 0.7% year-on-year.

Compared with last year, Dongguan's electricity consumption has increased slightly this year, and the social power consumption is abundant. Industrial electricity consumption is more abundant than in previous years.

An industry insider who did not want to disclose the name said that the economic downturn led to some factories directly shutting down, thereby reducing the adverse effects of power supply enterprises' "power restriction", but the drop in electricity consumption also had an impact on power supply enterprises.

{page_break}

Fear of SMEs

Fear is spreading among SMEs in Dongguan.

Since last year, influenced by a series of factors, such as raw materials, labor costs and RMB appreciation, the operating costs of Dongguan enterprises have surged, orders have been reduced, and unit prices remain unchanged, leading to a continuous decline in corporate profits.

"Business is not easy this year.

Orders are too small and there is not much profit. "

Zhai Su Ling, executive vice president of Dongguan Taiwan Business Association, and chairman of Dongguan Guang Sheng Hardware and plastic products Co., Ltd.

Li Jihuang, deputy general manager of Fu Gang Electronics Co., Ltd. told reporters that this year, the company's orders and profits declined as a whole, and orders dropped at least 1/3, "just like 2008."

Fang Baijin, chairman of Hongkong Tacheng toys related subsidiary company in Houjie, Dongguan, complained to our reporter that he did not get help from relevant departments.

"We have no other subsidies, and with too little orders, the total corporate profits this year dropped by 30%."

The company has more than 1000 employees, mainly engaged in plastic toys, electronic toys and toys and gifts production.

Fang Baijin said that the delay of orders would accelerate the tightening of enterprise funds like compressors, which would force his company to face the doom of bankruptcy.

At present, he has to rely on usury to delay the life of the company.

"This is a vicious circle. Not this year, it will be difficult to carry on next year."

His friend in a plastic factory is facing the same dilemma.

"His factory has been operating normally for more than 20 years, but now it is no longer possible. He borrowed money from me the other day, but I have no money."

The same fear is particularly evident in some smaller businesses.

Less than 30 employees in Dongguan Han Jie plastics technology Co., Ltd., the person in charge told this newspaper that compared with last year, the company's orders were 80% less than the same period last year, and the company is waiting for assistance from relevant departments.

Withdraw from Dongguan?

Fang Baijin said that he had already done the preparatory work of moving the factory out of Dongguan to the southwest.

In fact, rumours about the withdrawal of enterprises from Dongguan and the failure to establish homes in Dongguan have been circulating recently.

Analysts pointed out that if Dongguan's economy continues to be weak, investor confidence will again be hit.

"Enterprises are reluctant to move, but just like Taiwan enterprises before, they do not go out to die."

Zhao Weinan, General Secretary General of Dongguan Taiwan Businessmen Association of investment enterprises, told this newspaper that in recent years, some Taiwan enterprises are gradually reducing the scale of investment in Dongguan and gradually moving to the southwest and Vietnam, Kampuchea and other markets.

Ye Kunhong, chief of the Dongguan Municipal Bureau of foreign trade and economic cooperation, also acknowledged the presence of enterprises moving out of Dongguan due to economic impact in an interview with our newspaper reporters.

"At present, difficulties and opportunities coexist, but opportunities are far greater than difficulties."

On July 11th, He Yu, vice mayor of Dongguan, addressed the government and business liaison committee of the Han capital enterprise at Guangdong Province to allay these enterprises in "difficulties".

"It can be said that what we can get from the government is basically unreservedly taken to help enterprises develop."

He Yucheng, the Dongguan municipal government has been determined to help these enterprises out of the predicament with the support measures of "real gold and silver".

At present, the Dongguan municipal government has abolished the municipal level of enterprise charges, and once again introduced a 1 billion yuan financing support plan, and a series of measures to reward the imported equipment of productive enterprises.