Dongguan Shoe Companies Are Cutting Their Cards To The End.

By the end of September,

Qiao Hong shoe workshop four production lines have been re opened two.

Guo Junhong, executive director of Qiao Hong footwear industry, said: "now is the worst time."

After a cold spell, the reshuffle of Dongguan shoe industry, which is extremely sensitive to cost, has come to an end.

"Now all those left behind in Houjie are enterprises producing medium and high grade shoes, and many shoe manufacturers with low impulse and low price have spilled over to Fujian and Wenzhou."

Wang Zhizhong, who worked hard in Houjie for more than ten years, said to the first financial daily.

From impulse to quality upgrading, the shoe industry is not the only one.

Many furniture manufacturers, toys, clothing and other traditional manufacturing people interviewed by our reporter have a consensus that Dongguan is increasingly only suitable for the manufacturers of medium and high grade products, and enterprises that can survive the adjustment period will have the opportunity to rebound from the bottom.

Be very careful in reckoning

Dongguan Houjie is characterized by shoemaking and furniture industry, where hundreds of shoe manufacturers and industrial chain supporting enterprises are gathered. Shoes, zippers, netting, reflective materials, leather and other supporting industries are readily available. It is known as "the world shoe industry looks at Dongguan and Dongguan shoes industry sees thick Street".

Speaking of the current business situation, Guo Zhengjin, chairman of the more than 70 year old Qiao Hong footwear industry, is very confident. After the 2008 crisis, his factory has been regarded as a steady operation.

Although the number of OEM brands has dropped by 15%, there are still around 30, and the annual export volume is about 5 million.

"Since last year, customers have been lowering prices when placing orders. Before 2008, 9 dollars a pair of shoes, now the customer bid $7, profits were depressed by 20%."

Wang Zhizhong said, even if the factory does not receive a single month, there will still be a fixed expenditure of 2 million per month. If we can reduce the cost, even if we give a little profit to our customers, the shoe companies will hold on to it.

For this reason, shoe companies have to calculate carefully on various costs. For example, in order to receive orders, they would bear the cost of customer proofing before, but now they will communicate with customers as much as possible.

At the same time, we should tighten the clockwork, reduce the error rate, and improve the management and production with innovative ways.

Two months ago, the Houjie Town Government screened a number of key enterprises for production management guidance, and the government and enterprises paid 50 thousand yuan each. The management consultant went to the factory to observe and evaluate the effectiveness and put forward suggestions for improvement. Qiao Hong shoes industry was one of them.

"Three or four years ago, the cadres spoke to their employees in a simple and crude way. Now they must communicate well, so that employees can be more focused on the company and more considerate of the company."

Guo Junhong said, Qiao Hong set up a special reward, staff found the problem into the mailbox, if can be adopted rectification, employees will be encouraged.

The introduction of the Hong Kong and Taiwan productivity guidance organization was the first in Dongguan. The relevant staff of the Dongguan foreign trade and Economic Cooperation Bureau told reporters that since 2008, Dongguan has funded nearly 100 million yuan to support more than 20 Hong Kong and Taiwan productivity guidance institutions to set up offices in Dongguan. The government has the highest subsidy of 300 thousand yuan for every family participating in the counselling business.

At present, this practice has achieved results. The average production cost and manpower cost of the more than 1200 enterprises under guidance were reduced by 10%, exports increased by 16%, production capacity increased by 13%, net profits increased by 11%, taxes increased by about 1100000000 yuan, and new brands exceeded 114.

Closure and relocation

Wang Zhizhong said that in 2004 ~2007 was the flourishing period of Houjie's footwear industry. After 2008, many shoe enterprises shut down, went bankrupt or moved out because of many factors, such as the implementation of the new labor contract law, the financial crisis and the comprehensive cost of raw materials, labor and so on.

In 2011, a number of large and medium-sized shoe enterprises such as angar shoes, flida shoes, intermodal shoes and other companies have been closed down or relocated, causing a lot of excitement in the industry.

Dongguan's large shoe enterprise Warburg footwear has opened about 10 thousand factories in Ganzhou, Jiangxi, and has opened to Ethiopia this year.

At the end of September this year, Houjie, a large trading company in Houjie, moved the company to Quanzhou, Fujian because of labor cost pressure.

Liao Yongjie, manager of Dongguan port Jie Jie Industrial Co., told reporters that the company originally intended to expand the shoe production line in Dongguan, but because "the market situation is getting worse and worse, the wage is higher and higher, and the labor cost is increased by 30%", they pfer the production line to the mainland, and Dongguan company is only responsible for receiving orders, designing and publishing.

Liao Yongjie said that many companies around him also adopted similar forms, and the R & D and the single machine structure remained in the PRD, and the production plants moved to the mainland.

He explained that "Dongguan is becoming more and more suitable for the production of medium and high grade products, and the probability of failure to produce low-grade products is great."

Fang Peiji, President of Dongguan footwear industry association, believes that Dongguan will become a gathering place for middle and high grade shoe enterprises. After the increase of raw materials and synthetic cost, the products with high unit price will be more competitive.

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Outside Dongguan

According to the data provided by this bureau, the number of shoe manufacturers in Houjie has decreased from more than 600 in 2007 to more than 400 in 2011, and the number of employees has dropped from 150 thousand to 100 thousand.

Including the footwear industry, since 2008, the number of independent brands of processing trade in Dongguan has increased from 2068 to 4325, an increase of 2257, nearly doubled, and 441 newly established R & D institutions in processing trade enterprises, 49 times the total before 2008.

The average export price of each pair of shoes in Dongguan increased by 171.4% over 2008, and the average export price per garment increased by 61% over 2008.

Zhang Jie, deputy director of Houjie economic and Technological Information Bureau, told our reporter that the purpose of pformation and upgrading is to enhance the productivity of enterprises. Although the number of enterprises has been reduced, the industry has gradually developed towards design and brand development. The production and sales value of Houjie shoe industry has increased from 15 billion yuan to 38 billion yuan, an increase of 2.5 times.

"There are more and more companies that want to walk on two legs with foundry and brand."

The marketing manager of a children's shoe company in Houjie said that a normal operation of a brand is usually invested in at least one million, but it can not predict the result after putting it into operation. This tests the courage of the enterprise, but in order to survive, we must take this road.

Enthusiastic recruitment

As a labor-intensive industry, the greater difficulty of Houjie shoe industry is the shortage of workers.

Entering the peak season of footwear in September, there are still thirty or forty vacancies in the two production lines of the Qiao Hong footwear industry. In order to complete the order as scheduled, the factory has to work overtime.

This is a failure for the boss, overtime 1.5 times the wages of workers, the weekend is two times.

Reporters at the recruitment booth of the Baiyue square in Houjie Ting Shan saw that there were few applicants. Several shoe factories near the factory area were hung with "a large number of general workers," and "welcome the old staff to go home".

The departure of the workers also made Houjie slightly cold. A driver who was in the thick street for 6 years said to reporters that there was a clear feeling that there were a lot less people in the street. The former commercial street, Kangle South Road, could not go in, and now it was unimpeded.

The depression of the famous street coral road in Houjie has also become a corroboration of staff reduction.

"In 2004 ~2007, people on the coral road were crowded, and the restaurant had to make reservations in advance.

Nowadays, many restaurants turn to other businesses because they can't operate. "

Wang Zhizhong said.

It seems paradoxical that one side of the order is slipped while the other is short of work.

"Shoes and clothing are never-ending industries. Enterprises are short of opportunities to bring orders to the remaining enterprises. The problem of shortage of workers has always existed."

Fang Peiji explained.

"In another year or two, the problem of lack of work will be more obvious."

Wang Zhizhong is more worried that after a large number of brand cultivation, Houjie will also face the plight of the lack of senior talents.

Nevertheless, Wang Zhizhong still hopes for Houjie shoe industry.

"Most of the left behind in Dongguan are well built enterprises, which are healthier and more standardized in terms of management, finance and corporate culture.

Now is the time to fall to the bottom and slowly consolidate, and we need to be prepared to get ready.

By the end of September, Wang Zhizhong had just entered the business manager of Qiao Hong shoe industry. He and Guo Junhong were fourth students of the Taiwan footwear industry high level talent training class.

More than 40 of the nine currently completed students are working in shoe factories in Dongguan.

Under the night, "the world"

The advertisement that headquarters is inviting business is very conspicuous on different building exterior walls. A huge advertisement is left behind by taxi. It says, "who says Dongguan has no design?"