AOKANG Shoe Base To Move Westward To Deal With "Shoe Industry Earthquake"

The footwear industry earthquake, which began in the second half of 2007, has made the Chinese footwear industry feel the "cold" winter. The large number of small and medium-sized shoe enterprises in Dongguan and Wenzhou, which are the two largest footwear industry bases in China, have been closed down. The shoe manufacturers of Wenzhou and the Pearl River Delta have been looking for new ways or pformation.

"The winter of making shoes this year is coming."

In May 18th, Wang Zhentao, President of AOKANG group, the largest private shoe making enterprise in China, accepted the interview with the China Times reporter.

He disclosed that AOKANG next year's mass production of subsidiary Hong Wah biological products company (hereinafter referred to as Hong Wah bio), will become its second profit growth point of overwintering.

At the same time, AOKANG, who had already made the cost rise earlier, has moved westward into Chongqing as the "second killer" for the shoe industry to turn over and wait for the opportunity to start mergers and acquisitions.

At the beginning of the second growth point in 2008, thousands of shoe factories went bankrupt in the Pearl River Delta, and a large number of small and medium-sized enterprises planned to migrate.

Similarly, Wenzhou, another shoe making center in China, is experiencing the same pain. Lots of enterprises are closing down, and most enterprises are forced to start pformation.

Facing the sudden shoe industry "cold winter", one of AOKANG's wintering reserves has chosen to enter the biopharmaceutical industry, the gold rush vaccine industry.

"5 years ago, we entered the biopharmaceutical industry and chose to make vaccines.

Mass production will begin next year and will be listed in large quantities. "

Wang Zhentao told the China Times reporter.

According to Wang Zhentao, as early as in 2003, AOKANG group set up Hong Wah biological products company, which is located in Longquanyi District, Chengdu, Sichuan. It mainly produces rabies vaccine, epidemic cerebrospinal meningitis vaccine and other products.

The annual production of rabies vaccine can reach 10 million people, and the epidemic cerebrospinal meningitis vaccine has nearly 20 million people.

The company's production line has passed the GMP certification of the State Administration of pharmacy and quarantine, and now it is on production approval.

At present, AOKANG group has made biopharmaceutical as the second industry outside the footwear industry as a new profit growth point.

"At that time, the choice of medicine was not as clear as it is today. The footwear industry will decline and face such a big survival dilemma.

When we choose medicine, we are just looking for profit growth points. At that time, we did not anticipate the impact on the whole industry today. "

For entering the pharmaceutical industry, Wang Zhentao is still prescient.

However, Wang Zhentao did not disclose how much money he had invested in the pharmaceutical industry. He explained: "because the drug is different from making shoes, the state is very strict with this audit, and we do not want to publicize it before the product is available."

As a shoemaking enterprise, AOKANG suddenly stepped into the pharmaceutical industry without any connection. At that time, the industry did not understand it, and joked that it used the same production line to "make shoes in the daytime and make medicine in the evening".

However, in order to avoid other people's misunderstanding of making drugs and making shoes, AOKANG Group specializes in the name of Hong Wah biological, which is not related to AOKANG's name.

In May 12th, after the Wenchuan earthquake in Sichuan, when the earthquake center was very close to Chengdu and the magnitude of the earthquake was 8, Wang Zhentao's first reaction was, "my bio pharmaceutical industry is over."

Wang Zhentao's heart almost dropped to freezing point when the huge investment could turn to ashes.

For the first time, Wang Zhentao quickly called the biological director of Hong Wah. "When I learned that the staff were not injured and the factory buildings and equipment were not damaged, my heart came down."

Speaking of this, Wang Zhentao still had a lingering fear.

However, for AOKANG's entry into the vaccine industry, Peng Yunliang, an analyst with Shanghai securities and pharmaceutical industry, believes that the prospect of the vaccine industry is not bad. However, the impact of national policies is relatively large. There is a barrier in the country's general plan of bidding procurement. "No use of unconventional means, it is not easy to enter the hospital".

In this regard, AOKANG has long been clear.

Li Hailong of AOKANG Propaganda Department said that the products of Hong Wah's bio products are also mainly for procurement within the national plan, so that there can be stable orders. Most of the planned markets are controlled by multinational companies. Competition is not easy.

"Wenzhou's shoemaking enterprises feel very cold this year, it's really not easy to do."

Wang Zhentao said that many small and medium enterprises in Wenzhou were going to abandon their brands, hoping to do OEM for AOKANG, but at present, the company is also considering its own production.

The shoe industry was caught in the cold winter, which made most enterprises unprepared. But AOKANG, who had prepared for rainy days, shifted the production base 5 years ago.

In May 2003, AOKANG signed an agreement with the Bishan county government of Chongqing to jointly develop and build the West China shoe industrial park, and set up Chongqing red Firebird Shoes Co., Ltd. to build a production base of AOKANG group, which covers an area of 137 mu.

According to our understanding, AOKANG sold about 10000000 pairs of leather shoes in 2007, and the products produced and sold by AOKANG Chongqing red bird shoes industry reached 700 million pairs.

Wang Zhentao predicts that output will reach 28 million pairs in 2008, and the production and sales of Chongqing red Firebird shoes will account for a larger share.

According to Jiang Yuanwu, general manager of Chongqing AOKANG Real Estate Co., Ltd., for the Chinese shoe industry, which relies on cost only now, if the production base moves to the west, it will have the advantages of land, energy, pportation, labor and so on.

It is estimated that every pair of shoes produced in Bishan, Chongqing, can save 20% of the cost compared with the eastern coast.

With the impetus of AOKANG, nearly 100 small and medium-sized shoe enterprises in eastern China have been stationed in the industrial park of West China shoe capital.

Reporters learned that, originally in Dongguan for the Brazil shoe giant, the 20 more shoe factories supporting processing, also recently moved to the Industrial Park collective.

According to Dong Yifeng, Party Secretary of Chongqing Bishan County merchants Bureau, 8 big shoe companies in Taiwan are in contact with Bishan merchants, and are planning to enter the shoe industrial park in Western China.

The above 8 enterprises have production bases in Dongguan, with an annual output of 6 million pairs.

Because of sensitive matters, he did not disclose who the above-mentioned enterprises were.

However, compared with the shoe companies, the enterprises in eastern China are not very well off.

Wenzhou, a 500 person shoemaking boss Wu said, "now there is a single dare not answer, because of the RMB exchange rate instability and other factors, some 7 or August list can not pick up, do not pay well in a mess, can only take some recent bills."

According to Wang Zhentao, a big shoe company in Wenzhou will be listed next year. The chairman of the company has sprouted back, hoping that Wang Zhentao will become chairman of the company after the listing.

However, Wang Zhentao did not disclose who the company was specifically for.

AOKANG's propaganda minister, Wei Kai Meng, said that "this possibility is not ruled out, but how the final result will remain".