A Shoe Factory Boss'S Tragic 2008

Cao Jianjun and his business experience reflect the perplexity and hardship of China's manufacturing industry under the background of the weakening of the whole world's macroeconomy.

"Three factories, all kinds of taste."

Cao Jianjun has invested in shoemaking industry since 1997, and now has three shoe factories in Dongguan Houjie and Guangzhou, covering domestic and export markets in Russia and the United States.

But now, his factory is facing unprecedented difficulties.

Cao Jianjun's factory was not large at that time, but it was very typical and representative.

He witnessed and participated in the shift and rapid development of shoemaking industry.

"From 1997 to 2004, my business and my friends' businesses have been developing at a high speed."

Mr. Cao said.

At that time, many large international shoe companies entered China's order, with large orders and good profits.

Large orders can even reach hundreds of thousands or millions of pairs, and the factory is fully committed to delivery.

The mood of the workers is also very high.

"There used to be many simple Cara OK on the roadside, that is, a TV, two microphones, one dollar to sing a song.

The workers have an hour to eat dinner after work in the afternoon, and then work overtime.

I often see workers after dinner, they are a few people together, spent half an hour, after singing loudly, and then go into the workshop with interest and work late.

In 2005, Cao Jianjun built his third factory.

That is, from then on, the industrial situation began to take a turn for the worse, the business of shoemaking became difficult and competition began to intensify.

By the end of 2007, the situation had been very tragic.

Price squeeze Cao Jianjun first felt the increasing cost pressure.

Take the shoe bottom as an example, this downstream product made directly from petroleum materials, the direct consequence of the continuous rise in international oil prices is that he receives the fax of the price rise of the big bottom factory.

In 2008, the frequency and the amount of the fax were shocking.

"It used to be a six month or three or four month rise. Now it's going to go up every ten and a half days. It's 51 Fen yuan each time. How can we do this business?"

Cao Cao Jianjun said.

Shoe factories complain bitterly, and suppliers such as big bottom factory complain too much.

Many small big factories are simply unable to resist and have closed down or Guan Zhang.

Because the past customer's big bottom order, one month ahead of time down.

And when they get the raw materials, the cost has skyrocketed.

Besides the big bottom, the glue used for production, the shoes for post-processing, and the cartons for packaging are all costs.

In addition to oil and other industrial products, the cost of water, electricity and labor has risen linearly. Under such circumstances, how much can the shoe factories negotiate with customers?

Cao Jianjun's factory exports to three regions: the Russian market, the US market and the mainland's domestic market.

For the price and profits of these three markets, Mr Cao said with a laugh: the US market is regulated without profit, and the Russian market is profitable without rules. The domestic market wants to develop its brand and seek its own profits and rules.

In the American market, they often have systematic operation mode and management rules. In Mr. Cao's view, behind this system is their strict control over their cooperative factories with their own experience.

To cooperate with them, first included the preliminary works such as factory inspection, check the workers' social security and employment contracts, check the accommodation and living conditions of workers, check the management of factories and overtime work.

It has passed, and then is a complete set of operational requirements. From the first sample shoe provided by the customer, the first edition, trial and dress, confirmation, single code confirmation, full code confirmation, full set of die and mold tests will be carried out for large production, then the process inspection of large cargo production and the first part of the air freight, and the confirmation of the foreign customers to the final shipment.

"From the process, quality to delivery time control, they are very standardized, which is worth learning, and my factory and team also benefit a lot from it."

Cao Jianjun said.

However, behind this system and rigorous mode, the processing enterprises have almost no voice.

Some enterprises develop products, customers get it later, directly to a number of enterprises quoted price, and then pick the lowest price of the factory order, but also questioned the completion of the development of the factory, why do you give me the price is so high?

The offer will come down later.

In addition to controlling development, customers are also squeezed and squeezed again in terms of product prices.

Let many factories compare prices, pick the lowest factories, and this is not over yet.

Their demand for this factory is also that you must reduce the price again.

You can't drop it. Okay, I'll help you negotiate with your supplier. Can't he reduce the price?

I'll change the supplier for you.

After controlling the price, customers also make many restrictions in terms of payment and delivery.

Payment requires you to sign a letter of credit for 45 days or 60 days.

The faster we deliver, the better we will give you time to fly.

Then, send someone to your factory to investigate if there is any overtime.

If there is, this is a bullying worker.

No way, big companies holding orders, of course, their advantages.

Speaking of these, Cao Jianjun was very unfair but helpless.

Business is bad, and the exchange rate of the renminbi against the US dollar has risen sharply.

Now the exchange rate of US dollar to RMB is changing every day, and many of our peers have no way to quote customers.

No quote, no business, quote, but lose money.

According to their experience, they can quote at least one month.

But if you quote us dollars in one month, you will lose money.

Because customers do not accept the explanation of the change of US dollar exchange rate, they require the factory to deliver the goods at the agreed US dollar price.

Many orders of trading companies are not going down now, because no factory can quote or order.

They have to cancel orders or pfer to factories in inland China, and even India, Pakistan and Vietnam.

Cao Jianjun had no choice but to give up his favorite industry.

Since last year, he began to invest in the domestic market and increase the development of the domestic market.

It is hoped that we can gradually establish our own brand and channel and establish our own right to speak.

"We are just beginning. It is very difficult. You can watch TV.

At the beginning of the five sets of CCTV, how many footwear companies advertise, they also have money and ambition, but now many enterprises have disappeared.

Cao Jianjun said.

Domestic sales and export sales bring Cao Jianjun many new problems.

He also made many attempts.

As a diligent shoemaking man, he worked hard.

In fact, his industry is seeking its own way spontaneously and consciously.

Mr. Cao recently went to Europe with several shoe factory owners and visited Germany, Spain and Italy.

This trip to Europe gave him a lot of new information, "those big brands, they do have many new ideas and design worthy of our reference."

In particular, Cao Jianjun visited the production plants of these brands in Italy, gave him many new ideas, and also gave him a great shock. He saw with his own eyes that a Italy brand that he used to identify with in shoe making magazines is still using the same design as before.

"I even imitate their shoes, but their designs are exactly the same as they were three years ago."

It was a Italy lady who received him in the exhibition hall. He was fifty years old.

"The language is blocked, but I would like to tell her that your development needs to be improved."

Cao Jianjun said.

On this trip to Europe, I saw new information and saw the model I could learn from, which is very important to my business.

In addition, this visit has also given him great confidence. "Our development is fast, and our development is also for a reason, not only because our prices are cheap."

Cao Jianjun said.

"You see, 5 years ago, I often went to Italy to see shoes. Every pair of shoes looked good to me.

Now, except for a few top brands, many shoes feel that design and workmanship are very common, and the progress of our mainland China is also very fast.

Cao Jianjun saw challenges and saw opportunities.

Though he felt very difficult in 2008, he was willing to continue his efforts in shoe making industry.

"We also hope that the government will support us and that the environment should be beneficial to us, so long as we maintain a relatively stable economic environment."

First of all, not only high-tech enterprises are good companies, but also our labor-intensive enterprises have the same advantages.

The government should not discriminate against us, intentionally or unintentionally, let us move out and make way for hi-tech enterprises.

In fact, we can face the European and American customers that we have independent design and development and core competitiveness, we have our own experience summed up the production process.

European and American customers can not agree. We can talk about the products we design and develop with customers in Russia or other markets. Do those high-tech enterprises really have their own design development or core competitiveness?

Cao Jianjun started the new factory in 2005 and has not yet used electricity in the industrial area.

They didn't go on supporting them anymore.

Resources turn to invest and support high-tech industrial parks.

Seeing that his factory had to figure out a way to generate electricity, the neon lights of the Hi-tech Industrial Park continued to shine.

But will labor-intensive industries move out of technology intensive or high-tech enterprises?

There is a lot of comprehensive work of talents and services to be arranged and accumulated over a long period of time.

If the old goes, new cities will be hollow.

Cao Jianjun has decided to go all out to work hard for Russia and the domestic market.

If the situation is still not improving, he will close one of the factories to control the cost.

"Now many shoe factories are closed down. We recruit workers relatively easily than last year, and their employees are relatively stable.

I still have hope and I think there is still a chance, but the situation is stronger than the people, and we will see it by the end of the year. "