Rising Raw Materials And Manufacturing Costs In China

"The rising prices of raw materials and the appreciation of the renminbi" have put pressure on enterprises. Ceng Heping, vice president of Galanz group, said. Galanz, located in Foshan, Guangdong, is one of the largest household appliance manufacturers in China, with an annual export volume of US $500 million. Ceng Heping said that copper prices surged from thirty thousand yuan per ton to more than ninety thousand yuan, and international crude oil prices were also close to 100 US dollars per barrel. Coupled with the appreciation of the renminbi, the tax rebate rate dropped by 4 percentage points, so that the cost of production increased by at least 30% to 40%. It is understood that in the three quarter, the cost of production (operation) in Guangdong continued to rise, and the rise in purchasing prices of raw materials and energy was the main reason for the increase in costs. In addition to the household electrical appliance industry, the textile and clothing industry and the footwear industry also suffer a great deal. "The price of raw materials has risen sharply this year, and the cost of production has remained high. Although we have adopted various measures to increase efficiency and reduce expenditure, our export sales have been affected." Guangdong Zhongjie shoe industry Limited by Share Ltd chairman He Yuling said. "As a labor-intensive industry, profits are very limited. If we can not raise export prices, enterprises may not survive." He Yuling said. Besides, the high freight price brought by high oil price also makes the profit margin of enterprises smaller and smaller. In October, the price of container shipping from Shanghai to Dubai has risen from 900 yuan to 1500 yuan, and nearly doubled in two months. The high price of shipping has a great impact on export trade. Ceng Heping, vice president of Galanz group, said that in response to the challenges brought by the increase of raw materials and high oil prices, the internal enterprises must reduce the cost of management, reduce the production cost through the optimization of human resources and technology, and adopt the international bidding method instead of foreign countries, so as to reduce the price of raw materials through three goods stores.