Industry Shock, Small Shoe And Garment Enterprises Accelerate Shuffle

Since the end of last year, the textile and clothing industry and shoe enterprises have repeatedly failed.

These two labor-intensive industries, which belong to the traditional economic pillar of Quanzhou, are experiencing unprecedented challenges.

In fact, under the effect of multiple factors such as national policy adjustment, RMB appreciation and the new labor contract law, all the small and medium-sized enterprises across the country are facing the dilemma of "cold winter".

Is it to die or to survive?

Are SMEs rushing out to set up factories abroad or turning back to do the domestic market, or are they going to do their best products and make big brand processing plants?

In any case, the industry believes that this shuffle "labor pains" is precisely the textile footwear industry to standardize the implementation of industrial upgrading opportunities.

Shoes and clothing enterprises entered the "cold winter" in large scale. In March 20th, Fujian sewing equipment industry association and more than 30 people went to Zhejiang Taizhou to investigate.

Taizhou is currently the most important production base for sewing equipment in China. All the well-known sewing equipment manufacturers such as ZOJE, gemstone, Jack, Tongyu, Fei Ya and so on are gathered here.

The purpose of the Fujian sewing equipment industry association's visit is very clear. Through investigation, we hope to find some enterprises willing to go to Fujian to change the embarrassment of Fujian's sewing equipment industry "only sales, no manufacturing".

However, the result of the survey surprised the Fujian people.

Feedback from local sewing equipment industry in Taizhou shows that after the Spring Festival in the past year, the sales season of sewing equipment is very high, but this year the market has experienced an unprecedented low season.

Compared with the same period last year, Taizhou sewing equipment sales in the Guangdong market dropped by 70%, while Fujian was relatively good, but it also dropped by 30% to 40%.

The sluggish market has made Taizhou's sewing equipment enterprises not dare to cross the region easily.

Analysis of the reasons, Fujian sewing equipment industry association and Quanzhou textile and Garment Association of the relevant personages invariably believe that the sharp decline in the sewing equipment market, just reflects the year, textile shoes and clothing enterprises into the "cold winter" situation.

Since last year, the news of the failure of enterprises in Quanzhou's footwear industry and clothing industry has been heard, and then the news of corporate liquidation, arrears of wages and running of the boss has begun to appear in newspapers.

Like in Jinjiang, some famous shoe companies, such as Fu Chao, AI Jia Shi and Heng Lida, have closed down.

The official data also corroborated the frequent bankruptcy of enterprises.

According to an analysis of economic operation held in Jinjiang in March 20th, "the increase in operating costs has led to the collapse of some SMEs in the second half of last year due to cost pressures, closure or relocation.

According to the statistical sampling survey conducted by the Provincial Bureau of statistics in the urban private enterprises in Jinjiang, 152 of the 641 private enterprises in Jinjiang were closed down, shut down or moved out in 2007.

According to a statistics from Jinjiang's internal revenue service, as of March 17th this year, the clothing manufacturers of Jinjiang's Internal Revenue Bureau had increased their revenue in general.

But after in-depth analysis, we will find that its growth has certain limitations.

The main driving growth is concentrated on some listed and reserve listed enterprises and clothing brand enterprises, while some small and medium-sized enterprises, especially export oriented enterprises, show a marked downward trend in tax revenue.

In fact, the difficulties faced by small and medium-sized enterprises such as textile, clothing and footwear industries are not only in Quanzhou.

Guangdong and Zhejiang, which are quite similar to Quanzhou's industrial structure, are also experiencing this "life and death catastrophe".

Whether in the domestic media or in the industry, the analysis is consistent with the view that the adjustment of the state's foreign trade policy, the tightening of money, the continued appreciation of the renminbi, the rising of raw materials and the promulgation of the new labor law have made many small and medium-sized enterprises difficult to survive.

For example, since last year, the US "subprime mortgage crisis" has resulted in several rate cuts and the depreciation of the US dollar. Since the reform, the appreciation of the RMB against the US dollar has reached 15%, and the export tax rebate rate has been lowered.

"Obviously, the footwear industry and clothing industry in Quanzhou have entered a period of shock adjustment, and shuffling is inevitable."

An experienced person who knows Quanzhou's textile and footwear industry.

He even believes that the reshuffle adjustment has just begun, and this year's situation will be even more severe.

The data also indicate that the development of the footwear industry and clothing industry in Quanzhou is developing in the direction of polarization, that is, "the stronger the stronger, the weaker the weaker."

Like many shoe makers in Jinjiang last year, they saw the scene of sadness. But in July last year, Anta listed in Hongkong, the first annual report showed that net profit in 2007 surged 2.6 times.

After the Spring Festival this year, Jinjiang Malai clothing has incorporated three small businesses on the verge of bankruptcy. "Not only the workers have come, but even the production equipment has come together."

Malet, deputy chief Li Tianfu, said.

In the past, the order of such small enterprises mainly depended on those big enterprises "eating the rest", but now even the survival of large enterprises has problems, and the workers of small enterprises naturally go to enterprises with stronger strength.

According to the press survey, some brands are relatively well-known and strong enterprises. This year, recruitment after the Spring Festival is easier than before.

"I think there is no way that small and medium-sized enterprises will be eliminated if they are in trouble.

After all, the state's industrial policy is set in this way, and the development of enterprises needs to conform to the state's macro regulation and development plan.

Green, vice chairman of the Quanzhou textile and clothing chamber of Commerce and chairman of the group of directors of Zhao Jianhe, believe that, on the other hand, the elimination of non-standard SMEs will bring the industry's reshuffle and resource integration, promote the standardization and sound development of the industry, and promote industrial upgrading.

The way to break through is to test the adversity of small and medium sized enterprises owners. Therefore, how to break away from the small and medium-sized enterprises in the "cold winter" and try their best to win the battle will further test the wisdom of their bosses.

Since the second half of last year, some shoe and accessories enterprises in Jinjiang have gone abroad to investigate the markets of Vietnam and India.

Jinjiang, a shoe material business owner, said that at present, Vietnam, India and other countries vigorously support the development of footwear industry, but due to the late start, the supporting industry chain is still not perfect. "With the increasing cost of manufacturing in China, orders from Europe and the United States will slowly shift to Vietnam and other new developing countries. We are now taking the initiative."

In the aspect of shoe making, a few years ago, Jinjiang shoe companies also focused on expanding the scale of production locally. Guo Hui shoes industry had already started investing in Vietnam and worked with local distributors to produce Kuwait's brand shoes.

It is understood that Guo Hui currently has 4 shoe making lines in Vietnam.

With the help of cheaper local labor force and preferential policies supported by local governments, the new production base has a certain cost advantage compared to the domestic shoe manufacturers at present.

In the face of the continued appreciation of the renminbi and the decline in the export tax rebate rate, which are not conducive to the export of foreign trade, many former export-oriented enterprises have begun to pfer their ships to the domestic market.

According to incomplete statistics from global shoe net marketing department, the brand of newly born shoes in Quanzhou area is estimated to exceed 100 last year.

In August last year, Quanzhou's lean shoes and clothes began the road of pformation from foreign trade to domestic sales.

Lean at the end of all foreign trade business, launched the "Yue Shi" brand.

At the same time, lean is also very clear, in the past, shoes and clothing brand by bombing ads smashed the brand, has no longer adapted to the development of new brands.

"Yue Shi" was launched as a product oriented, functional sports shoes, such as thermal insulation and massage.

The personalization of products avoids the fierce homogenization competition in the domestic market.

However, for some shoes and clothing enterprises that used to be mainly foreign trade, they turned to the domestic market to make brands. Wang Zhijian, a senior official in Quanzhou footwear industry, did not agree.

"The domestic market competition is also very intense. The enterprises that have already taken the brand road have taken the lead in developing, and the scale effect can bring about the benign development of the enterprises.

But foreign trade enterprises blindly follow suit to make brand, capital strength, channel occupation and so on.

Wang Zhijian believes that the small and medium-sized enterprises in distress should actually do a better job of their products. "You have your own uniqueness, even if you become someone else's factory, and you also have the right to speak."

Like the foregoing, the Malet dress, in fact, is only a brand of two or three lines for the size of its more than 500 workers.

But malait insisted on doing cotton padded clothes for many years, and gave the trousers and suits of men's wear products to other processing plants. This is also the reason why mallet has been able to bloom in both domestic and foreign markets in recent years.

In the early March, the China Textile Industry Association conducted an investigation into 6 major textile industry provinces, including Fujian province. The results showed that the profit margin of 2/3 in textile industry was only 0.62%. If these enterprises fall into a desperate situation, they will endanger the employment of about 15 million people.

It is said that the textile association has been written and will be submitted to the State Council recently.

It is understood that the China Textile Association has launched a thorough investigation of the 6 provinces' textile industry, which is based on the news that textile enterprises are on the verge of collapse in January this year.

After the State Council's instructions, the Chinese Textile Association immediately began its investigation after the Spring Festival.

In early March, it was led by the chairman of the China Textile Association and the chairman of the sub committees. 6 research teams were sent to Jiangsu, Zhejiang, Shandong, Guangdong, Fujian and Hebei for research.

The 6 provinces have concentrated on the most powerful textile enterprises and industrial clusters in China, and the 6 provinces account for 85% of the total industry.

The purpose of the research group is also very clear, they want to know that the RMB appreciation, raw materials, labor costs continue to rise, export tax rebate reduction, impose export tariffs......

In the face of intensive policy adjustments and environmental changes, what is the real survival state of textile enterprises, and whether there is still greater affordability?

The results of the survey obviously put pressure on the industry.

Sun Huaibin, director of the China Textile Economic Research Center who took part in the survey, said that in 2007, the enterprises had undergone many adjustments, and the bearing capacity of different enterprises was different. The polarization of textile enterprises was very serious.

Enterprises with high added value, brand names and longer industrial chains are more resilience in the face of adjustment.

Some small and medium-sized enterprises are likely to be squeezed out by the superposition effect of these policies.

According to data provided by Sun Huaibin, last year, 1/3's textile enterprises accounted for 80% of the profits of the whole industry. The profit margins of these enterprises were mostly between 6% and 10%, and the average profit of the whole industry was only 3.9%.

It is understood that this research conclusion and related policy recommendations will be the latest State Council.

The association hopes to timely adjust the export tax rebate and cancel the cotton slip tax policy, leaving a buffer stage for the textile industry.