ADI And Other Enterprises Move Away From China'S Foundry Enterprises.

Foundry enterprises are in deep mire.

In the rush of famous foreign companies to leave China, the manufacturing enterprises will be trapped in the mire. They must find a new way out.

Famous global

Adidas has decided to close its sole factory in mainland China.

According to the notice from the manufacturer, the factory was closed in October this year, and now the company's personnel recruitment has stopped.

Adidas's closure of its own factory was not an isolated case. As early as March 2009, Nike, its "forever competitor", did exactly the same thing and shut down the only shoe factory in China, the Taicang factory.

At the same time, customers announced that they would move the factory to Bangladesh in the future. PHILPS also shifted large quantities of orders to Southeast Asia.

With a number of multinational companies moving away from China in succession, what kind of choice will Zhejiang face as a foundry business?

Foundry enterprise shock wave

A lighting exporters founded in the Yuhang District of Hangzhou for PHILPS foundry is facing the biggest crisis since its establishment.

The company official told reporters that since 1997, they have mainly produced various types of energy-saving lamps and LED lamps for the PHILPS OEM, the proportion has been as high as 95% of the company's capacity.

However, since 2011, because of the soaring prices of raw materials such as phosphors, PHILPS's orders have not been answered at all, and the volume of business has begun to drop sharply.

In the first half of this year, the company's export volume was only $1 million 170 thousand, which was only 4% of the same period in 2010.

The same experience also came to the head of a clothing company in Xiaoshan, Hangzhou.

Previously, because of its excellent quality, the company obtained a foundry order from a well-known German brand, with annual sales of $about 20000000.

This year, the company received the notice of the German company's disengagement.

If you can not find new customers and orders in a short time, this garment enterprise will face the risk of shutting down production.

According to Zhang Handong, director of Zhejiang international economic and Trade Research Center and WTO Zhejiang research and consultancy center, with the decline of labor and raw material cost advantages, many multinational companies have reduced their business in China. Apart from the relocation of factories, many multinational companies have reduced their orders to the original OEM enterprises.

"Zhejiang's manufacturing industry is well-developed, with a large number of

As an OEM company, with the growth of the capacity of these multinational companies, there will be more foundry enterprises facing a survival crisis in the next few years.

However, the status quo of Zhejiang foundry enterprises is not prominent in the whole country.

"At present, the problems encountered in the two provinces of Guangdong and Jiangsu are more serious and more serious than ours."

According to Zhang Handong, foundry business is divided into processing trade and general trade.

A complete industrial chain includes all links from design research to processing and manufacturing to brand marketing. General trade covers a longer industrial link, while processing trade covers a relatively short and relatively simple industry.

Guangdong's foundry business is mainly processing trade, and general trade accounts for only 20%.

For example, Apple Corp provides many parts to Foxconn, and Foxconn helps them assemble. After processing, the finished products are returned to Apple Corp, which is a simple processing and manufacturing process mainly based on incoming materials.

Zhejiang's OEM business accounts for 8 of the total trade, while processing trade accounts for 2.

For example, when a textile enterprise receives orders from abroad, it is first necessary to purchase fabrics, organize processing, and deliver the goods, from the initial production of cloth to printing and dyeing to the next tailoring and sewing is completed in Zhejiang.

The processing trade in Zhejiang is mainly based on this feed processing.

"From the current situation, no matter what kind of processing methods, OEM has encountered a relatively large impact.

Only Guangdong and Jiangsu have bigger problems than Zhejiang. "

Zhang Handong said.

Migration peak of foreign enterprises

Clothing companies like Adidas, Nike and Puma are more sensitive to labor costs, which control labor costs between 20% and 30%.

Zhang Handong said: "you can see that in the past twenty or thirty years, the production base of ADI and Nike is just like migratory birds, which is constantly closed down and migrated according to the change of production costs all over the place."

Adidas pursued the cost advantage. Its production base was first established in Europe, and then moved to Japan with relatively low production costs, followed by Korea and Taiwan, China, and then the mainland of China, which experienced migratory routes like migratory birds.

For these foreign-funded enterprises, the current choice to withdraw from China is just like their choice to come to China at that time, because of the consideration of cost factors, of which labor price is the most important element.

According to official data, the manpower cost of China's manufacturing industry has begun to surpass those of Southeast Asian countries, especially those with relatively low profits and relatively simple industries.

In the low-end market, China used to rely on price advantage. Now the labor cost in Thailand and Malaysia is slightly lower than that in China. The labor cost in Vietnam, Kampuchea, Indonesia and Philippines is only 1/2 of that in China. In Burma and Laos, the labor force price is even less than 1/3 of ours. Africa is also the same. The labor cost of the whole Africa is cheaper than ours.

Many multinationals have shifted their factories to Southeast Asia, South America and even Africa, which are lagging behind China's development.

In the relatively complex manufacturing industry, there is an industry matching problem. Many multinational companies also mention that some emerging markets and countries have not matched the industrial chain as well as the mainland of China.

In terms of staff quality, there are a large number of skilled workers in mainland China, which are comparable to many emerging markets and countries.

"International industrial pfer is a trend, but it can not be completed within a day.

The Chinese mainland still has obvious advantages. "

Zhang Handong believes that under the general trend of international industrial pfer, a large number of OEM enterprises have been faced with severe challenges in terms of quantity expansion, scale expansion and price competition.

{page_break}

Foundry enterprises climb hard

At present, the foundry enterprises are in a stage of uphill or pformation.

"Zhejiang's industry is extraverted, and many of its industrial products are exported.

In addition to its own brand, it is a large number of OEM products.

Zhang Handong believes that the problem of contemporary workers does not mean that the industry can not develop, to a certain extent, this is also a new stage of development of Zhejiang's foreign trade.

"When cheap labor, raw materials and land advantages are gradually disappearing, OEM enterprises should also consider pformation and upgrading, actively go out, use global resources, and strive to enhance value-added products, and create local multinationals."

However, to really go out and create local multinationals, it will take a long time.

It is understood that the entire international trade, the order type of production occupies a considerable proportion.

Compared with order production, it is the form of independent brand expansion.

Zhang Handong believes that "a lot of famous brands in China, which want to gain global influence, still have a long way to go. We need to improve the quality of products, carry out independent innovation, pay attention to protecting intellectual property rights, and integrate resources globally."

"Over the past few years, many enterprises have invested abroad to set up factories," go out "from the original products to the present enterprises'" going out ", close to the sales place of products, cross international trade barriers, and avoid anti-dumping, countervailing international trade frictions.

Many leather shoes companies like Wenzhou have set up factories in Russia and set up factories in Africa.

The head of a textile enterprise in Shaoxing, Zhejiang, told the reporter of Zhejiang merchants that they were ready to set up a factory in Ethiopia this year, with rich wind, hydraulic and mineral resources, or one of the most important cotton planting bases in the world, which is more suitable for textile enterprises to invest in factories.

More importantly, the labor cost there is low, the current workers' wages are three hundred or four hundred yuan per month, which means that if the benefits are added, the cost of a worker in Shaoxing, Zhejiang will be able to feed seven or eight workers in Ethiopia.