Quanzhou Shoes And Clothes Are Faced With Money Problems

The cost of raw materials has gone up, the new labor law has been implemented, and loan interest rates have been raised.

This year, whether for Quanzhou's foreign trade enterprises or domestic enterprises, the internal and external environment changes are all brought about by the pressure of rising costs.

Under the pressure of capital, some enterprises are faced with the dilemma of stopping production or half stopping production, but enterprises are still trying their best to save themselves. Some of them may only bring short-term effects, but as long as they survive the severe winter, they will be welcome.

Mr. Chen is the owner of a machinery factory in Quanzhou. The first thing after attending a professional exhibition from Beijing last month is to borrow money from an old friend.

Because he had just received a list at the exhibition, he needed to make the order immediately, but he didn't have enough cash on hand.

His original idea was to borrow 1 million yuan for emergency response, but in the end he borrowed only 500 thousand yuan, and had to pay 510 thousand yuan in 1 months.

"This is the preferential rate of old friendship, which is only two cents a month."

Mr. Chen said that it is already very good to borrow some of the money. "Most of the people who do business this year are short of money. No one can guarantee how long the money can go out, the sooner the better."

When reporters interviewed in the company, they heard the most "lack of money". The direct impact of the shortage of funds was the sharp rise in interest rates of private lending, which began in the second half of last year.

The Fujian financial operation report released in 2007 by the Fuzhou central sub branch of the people's Bank of China shows that private lending in Fujian has become increasingly active. Last year, the total amount of private lending in Fujian increased by more than 40% over the same period last year. Interest rates also rose significantly, and the growth rate in the second half of the year was more obvious.

After the weighted average, the interest rate of private lending increased by 1.16 percentage points over the previous year.

"A few years ago, the monthly interest rate of private lending was between 1%% and 2%%, and now it is almost impossible to borrow money at such rates."

Mr. Zhang, an iron plant, said, "now private lending, the interest rate of 3%% and 4%% has been regarded as human feelings for a month. Some short time loans, 5%% and 6%% are regarded as normal monthly rates."

However, high interest rates aim at short-term loans, usually not more than half a year.

Business people believe that if long-term liabilities are "high interest rates", most businesses will fall down.

"No enterprise's profits can sustain such interest payments for a long time."

Mr. Zhang said.

One of the backgrounds of such an active private lending is tightening money, not to mention most of the small and medium-sized enterprises that have not entered the bank's legal eye. Even well-known enterprises, it is difficult to lend money from banks this year.

"Mobile loans can also be secured, and more than a year's fixed loans are not available."

A well-known shoe manufacturer in Quanzhou told reporters.

Reporters learned from the bank that the number of banks in the first quarter of this year ran out of loans.

"It is necessary to have new funds to refinance loans. Now we can only rely on loans that have been reissued in the past. This year, the funds of enterprises are relatively scarce, and no enterprise is willing to repay loans ahead of schedule."

One bank official said.

Under such circumstances, some enterprises even took risks and usured usury, but failed because they could not afford high loans.

"There is a shoe factory in Jinjiang, which has been maintained by a loan shark. After that, it had to run and the factory went bankrupt."

A shoe dealer told reporters that the shoe factory that closed down has six hundred or seven hundred workers. It has become a medium-sized enterprise in Quanzhou, but in the end it broke down because of the breakup of the capital chain.

The price of our products has increased again and again. "In the first half of this year, our product price has been increased by more than 20%% in three times, and we have to mention it later."

Carrie is the production of electric toy cars. Its products are mainly exported. Now the price of a car is close to 30 US dollars, but chairman Xu Qinghai said the profit is still very thin.

"In January, February and April, we went to Hongkong, Germany, Nuremberg and Guangzhou for 3 exhibitions, and the price was 3 times."

Xu Qinghai told reporters that basically every time he went to an exhibition, he had to raise the price of the product once.

Otherwise, only the appreciation of the renminbi compresses the profit margins of enterprises, so they have to be mentioned again and again.

For enterprises, the appreciation of the renminbi can also be resolved through consultation on the order, and the most important thing is the rising cost, and this increase is very unpredictable this year.

Reporters learned that, as a downstream industry of petrochemical industry, the price rise of raw materials has made textile, clothing, shoes, toys, resins and other industries face a situation of declining profits.

"Last year's price was 7000 yuan per ton, and it has risen to 20000 yuan a ton recently."

This is the price of plastic rice used for shoemaking when interviewed by PEAK in early June.

Similarly, the price of plastic toys for toys has also risen since April, from 12000 yuan / ton to 16000 yuan / ton.

"Basically, it is 2000 yuan a month, which is unexpected."

Xu Qinghai said.

In the bag industry, the prices of main raw materials such as polyester cloth and PVC film also increase significantly with the price of oil, which brings huge cost pressure to the low profit bag enterprises.

Raising prices is a way that enterprises have to take, but even such a method is not always effective. The key is whether guests can accept or not. The direct impact of customers can not be accepted is the reduction of orders.

"This year's Canton Fair, our 81 square meters of stalls, received orders less than 3."

Green chairman Zhao Jianhe said, in the 90s of last century, to participate in a Canton Fair can receive orders from twenty or thirty guests, the booth needed is only 5 square meters.

Nevertheless, raising prices is still something that businesses have to do.

For some small businesses, they are afraid not to raise prices.

"Do not take orders, that is, waiting for death, then pick up the list, that is to look for death."

The head of an export enterprise said that this also caused many enterprises to stop production, or half stop production, and some could shift from their own exports to other enterprises.

After entering the futures market to avoid risks, some enterprises began to focus on futures hedging in the case of rising prices of raw materials.

"Last year, the prices of raw materials in many industries have risen differently, so we can only reduce the risk of price fluctuations by buying raw materials and making futures in one hand."

Mr. Wang, director of an enterprise in Quanzhou, told reporters.

The basic feature of so-called hedging is to sell or buy the same amount of futures in the futures market while buying or selling real goods. After a period of time, when the price changes make profit and loss on spot trading, it can be offset or compensated by the deficit in futures trading.

Thus, a hedging mechanism is established between the "present" and "futures", between the short term and the long term, so as to minimize the risk of price.

Reporters learned that there are many domestic futures varieties related to Quanzhou enterprises.

Copper, zinc and other industrial futures have been sought after by many plumbing industries in Nanan. PTA, crude oil and other chemical futures are closely related to the industries such as Quanzhou, Jinjiang and Shishi, such as chemical fiber, cloth, clothing, shoe materials and so on. As for last year's "crazy farm products", food enterprises and food traders in Quanzhou are also inseparable.

"Now Quanzhou enterprises are paying more and more attention to the product of futures, and even some enterprises have specially set up futures department to conduct pactions in this area, or invite professional futures personnel to help enterprises to carry out practical operations."

One Quanzhou business man said.

"The price of raw materials such as copper and zinc has indeed risen rapidly, causing great cost pressures to enterprises."

Mr. Zhao, deputy general manager of brilliant plumbing, said that Quanzhou enterprises' concern for futures market has indeed become a "new craze".

"There are professionals in the enterprise who are responsible for studying futures, paying close attention to the price trend of raw materials and not necessarily carrying out hedging operations, but studying futures can provide enterprises with information assistance in purchasing and controlling inventory."

"The number of accounts opened last year increased by more than ten times compared with the number of accounts opened the year before. The number of accounts opened this year has increased by four or five times compared with the same period last year."

Wang Jinye, general manager of Shanghai Liang Mao futures brokerage Co., Ltd., general manager of Quanzhou Sales Department, told reporters that this year, not only has the number of accounts opened up, but also the scale of funds has increased.

"This is only an opening account in the local sales department of Quanzhou. Some enterprises may open accounts and trade in Futures Company, such as Xiamen, Shanghai, Beijing and other cities."

Wang Jinye said that with the listing of more futures varieties such as iron and steel, more spring enterprises will enter the futures market.

When the US dollar was borrowed from banks earlier than expected, the boss of Jinjiang's clothing business looked at the business opportunities of US dollar loans.

He believes that the US dollar lending rate is lower than that of the renminbi, and that the appreciation of the renminbi directly benefits the companies that use US dollar loans.

"If we estimate the monthly average appreciation of 1%% and use US dollars for 6 months, the exchange rate will only save nearly 6%% of the loan cost."

Chen said that this is a way to ease financial stress for export enterprises that are under pressure from the appreciation of the renminbi.

The choice of US dollar loans is the "wishful thinking" of many import and export enterprises. The reason is that this year's monetary tightening is very tight.

An enterprise told reporters that this year's business loans from banks, not only the total amount of loans will shrink, the bank loan interest rate is also helpless, whether it is business loans, or personal mortgage loans, most banks are floating on the benchmark interest rate 30%%.

"At present, the benchmark annual interest rate of banks is 7.47%%, up to 30%% after reaching 9.711%%.

Even the old customers of banks need to go up to 10%% at least to 8.217%%.

Although foreign exchange loans to banks are more cost-effective, foreign exchange loans are not so easy.

Reporters learned from the bank that although the foreign exchange loan interest rate of banks is based on the London Interbank Offered Rate (LIBOR), the foreign exchange loan is also very tight due to the state's control of foreign debts. Every bank will increase the benchmark interest rate and there is no fixed interval.

"If you want less, you need to add 400 basis points, or 500, 600 basis points, or even 700 base points."

One bank official said.

It is understood that LIBOR is 2%%, plus 700 basis points, the interest rate of foreign exchange loans should reach more than 9%%, in fact, the annual interest rate of RMB loans is almost the same.

But even so, companies are more willing to choose foreign exchange loans.

"According to the speed of RMB appreciation this year, by the end of the year, we may have to appreciate about 10%%, so that interest on foreign exchange loans is almost the same as the exchange rate. Using foreign exchange loans is equal to no interest payments."

Chen boss said.

However, banks' foreign exchange loans are not easy to borrow.

"Borrowing only from trade financing loans, which is short-term loans, usually does not exceed three months, and is based on the return period of different industries.

It is hard to borrow money with long term loans.

In the face of financing pressure, listed companies are not worried.

Last year, seven wolves were successfully issued A shares, raising funds amounting to 599 million 812 thousand and 500 yuan.

All these funds can be used for upgrading the company's sales network.

In 2007, Anta launched "one year ahead of schedule". Its opening price was HK $7.6 per share, and it closed at HK $7.5 on the day, up 2.22 HK $5.28, or the first day of trading.