Westward Advance Of Eastern Private Enterprises Has Become A Unicorn Game For Big Enterprises?

Walking into the production workshop of Chongqing Bishan County Red Bird shoe industry Co., Ltd., people have an illusion.

Every year 5 and June, the production of general shoemaking enterprises began to be light, and the staff took a vacation.

But here is a busy production scene, and every worker is bowed down and busy.

Red Firebird Shoes Co., Ltd. is a subsidiary of AOKANG group of Wenzhou.

After waiting for more than ten minutes, Cheng Yun talent came out of the workshop office.

Cheng said he stayed in the workshop for at least 10 hours a day, in addition to arranging production plans, and accounting for the manufacturing cost of the products.

Cheng Yunying, the director of the production planning department of the company, was pferred from Wenzhou to Chongqing by AOKANG group 5 years ago, and is familiar with the situation of shoes enterprises in Wenzhou and Chongqing.

When he first came to Chongqing, he found that on the basis of scale production, the cost of shoe making in Chongqing was about 20% lower than that in Wenzhou.

Moving from the southeast coast to the western hinterland is one of the routes of Chinese manufacturing pfer.

In the first half of this year, the production cost of footwear industry in Wenzhou increased by 20% over last year, and many enterprises were unable to bear the cost and shut down.

Building a production base in the West seems to have become a panacea for the cost reduction of SMEs in the East.

But AOKANG's westward mode is not replicable because of its uniqueness.

When more SMEs in Wenzhou move westward, they are often disappointed with the great gap between ideal and reality.

A shoemaking boss from Wenzhou, Chongqing, takes his company as an example to make an analysis. The conclusion is that the advantages of raw materials and labor in the West are not obvious, and more advantages lie in local preferential policies.

But policy is the most unstable thing to come and go quickly.

Westward story 5 years ago, when Cheng Yunying came to Bishan, it was almost impossible to see any foreign enterprises build factories here. At that time, the "West shoe capital Industrial Park" was just a rural wasteland scattered in the countryside.

Today, there are Eastern migration enterprises, local enterprises and foreign-funded enterprises in the park. Relevant footwear enterprises also come together to hear Wenzhou dialect, Minnan dialect and Cantonese at any time.

During the 5 years, the small town in Western China changed so much, but it started with a sad story.

In March 2000, Zhang Yan, a 17 year old girl who worked only 1 months in a leather shoes factory in Bishan, suffered from leukemia.

Due to lack of basic protection and ventilation facilities, benzene contained in the adhesive used by leather shoes manufacturers in Bishan seriously infringed on the health of workers.

After the death files of leather shoes workers were made public, all the spearheads directed at local governments.

As one of the ten largest leather shoes production bases in China, at that time, Bishan had 1800 Kang shoes manufacturers.

After the death files of leather shoes workers were made public, all the spearheads directed at local governments.

As one of the ten largest leather shoes production bases in the country, at that time, Bishan had 1800 leather shoes manufacturing enterprises, with an annual output value of about 3 billion yuan, accounting for 35% of the total industrial output value of the whole county, but still dominated by small workshops, with a small scale and low added value.

In 2001, the Bishan county government called for "the two pioneering work and revitalization of Bishan leather shoes" for the first time.

However, the owners of local enterprises still hold the idea of "getting rich and ready for safety" and are unwilling to accept new ideas and new things.

If the government wants to complete the above-mentioned "grand plan", it can only hope that those foreign shoe industry predators.

At the same time, the eastern private enterprises and foreign-funded enterprises also feel that moving to the West and reducing manufacturing costs are the trend.

As a result, the upgrading of the western footwear industry and the breakout of the eastern enterprises are compatible here.

In May 2003, Bishan introduced the "China shoe king" AOKANG, which invested 1 billion yuan from AOKANG group to build the "West China shoe capital Industrial Park". It covers an area of 2600 mu, and is built into the largest shoe material trading center in the west, shoe trading center and quality inspection center, and shoe brand enterprise production and processing base.

Due to the brand effect of AOKANG, the supporting manufacturers and sales merchants have followed up. 12 footwear enterprises such as Wenzhou shoe materials, Hangzhou Xinghua leather machinery, Chongqing Yuhua shoes industry and so on, have entered the industrial park, and the first 937 acres of industrial land have been all arranged.

Sales of commercial shops have not yet been opened, and 566 shops have been purchased by more than half.

Foreign shoe industry is also unwilling to lag behind in the westward advance.

In the middle of last month, Brazil shoe giant magnon company launched a project to invest 160 million yuan to build 8 international standard shoemaking lines in Bishan. It plans to produce 4 million 500 thousand pairs of shoes per year, and a number of shoe factories that have been matched for processing in Dongguan have also moved to Chongqing.

Zhang Shuhua, chairman of the China Leather Association, said that the footwear industry is a "migratory bird economy" and is always pferred to countries and regions where labor costs are low.

In the 60s of last century, the world shoe center was in Italy; in 70s, it moved to Japan and South Korea; in 80s, it moved to Taiwan, China; in 90s, it moved to Dongguan and Wenzhou.

Now, shoe center is moving to central and Western China.

Everyone's cost depression?

For the first arrivals and the AOKANG group, which already has the advantage of large-scale production, the West undoubtedly has the cost advantages of land and labor.

Cheng Yunying said, compared with Wenzhou and other eastern coastal areas, in Chongqing Bishan every production of a pair of shoes, enterprises can save 20% of the cost.

When AOKANG entered Bishan's "West shoe capital Industrial Park" in 2003, the purchase price of land per mu was less than 40 thousand yuan, and it was also the clean land that the government had levelled up.

In contrast, Wenzhou has at least hundreds of thousands of yuan per mu of industrial land. Because of the shortage of land, it is difficult for an enterprise to get more than 100 mu of land, which is obviously not conducive to the expansion of the scale of production.

Cheng Yunying calculated a cost account: in terms of water and electricity charges, the industrial electricity price in Bishan is 0.15 yuan cheaper than that in Wenzhou, and the labor cost per worker in Bishan is two hundred or three hundred yuan lower than that in Wenzhou per month. In the aspect of production materials, the cost of sole material is 9 yuan / double, which is 4 yuan cheaper than that in Wenzhou.

This can save a lot of cost for 4 production lines and 5000 red shoes shoes industry that produces more than two pairs of shoes.

Based on the cost advantage of Bishan, AOKANG has also adjusted its product strategy.

Cheng Yunying said that the red Firebird shoes produced in Bishan belong to the low-grade and popular products.

The AOKANG leather shoes produced in Wenzhou focus on the high-end markets both at home and abroad, and sell them through exclusive stores and shopping malls.

But the cost advantage of the West seems to be the exclusive patent owned by AOKANG's large scale production enterprises, which is another feeling for some small shoe making enterprises in the region.

Chongqing Yuhua footwear industry is a well-known local enterprise in Chongqing.

"Actually, what we earn is the government's preferential policies."

Yu Xiaohua, the general manager of the company, said that in the eyes of the circle, the western labor force is cheap and the price of raw materials is low, but in fact it is not so. The cost gap between the East and the west is not as obvious as that in the imagination.

Yu Xiaohua said that the supporting industry in Bishan and its surrounding areas was insufficient. The raw materials of the company were pported through the East and the land through the water and land, and the finished products were pported through the water and land, and the pportation of round and round pportation increased a lot of cost.

In addition, Bishan shoemaking workers are also scarce. Wages rose rapidly in recent years, and the per capita monthly income was only one hundred or two hundred yuan in the East.

Yuhua footwear industry has invested 18 million yuan so far. Last year, the output value of the company was less than 25 million yuan, and net profit was between 5% and 6%, and the profit was less than 1 million 500 thousand yuan.

It is worth noting that the net profit of the 1 million 500 thousand yuan is based on the preferential policies of the local government "free from" value-added tax and "less paid" matching fees.

"If I pay taxes in real terms, I lose at least 3 million yuan a year."

Yu Xiaohua said.

As orders are not in flux, shoe companies moving to the West are also underperforming.

Yu Xiaohua said that if the 3 production lines of the Yuhua footwear industry were fully opened, they could produce 5000 pairs of shoes a day, and now they only produce 1000 pairs of shoes a day.

In addition, in order to avoid the positive competition with the large enterprises in the East, some small and medium-sized enterprises in Bishan are turning to foreign trade businesses or processing brands at home and abroad.

Under the driving force of cost pressure, the pfer of eastern private enterprises to the mainland or overseas has become a trend, but the pfer is still cautious.

"This is a kind of tentative pfer, not a pfer that is uprooted, it is a gradient pfer."

Zhang Shuhua said.

Before, shoe companies were willing to migrate to Southeast Asian countries, mainly based on the fact that labor force is cheaper than China, but in recent years, labor costs in Southeast Asia have also increased by twenty or thirty.

Now the Midwest has become the best choice for the pfer of SMEs in the East.

As a matter of fact, the "westward route" of the Eastern shoe enterprises is started from Jiangxi, which is adjacent to Guangdong and Zhejiang.

In recent years, the attractiveness of Chengdu and Chongqing has increased rapidly. In fact, AOKANG group's "westward route" has been launched from Jiangxi, which is adjacent to Guangdong and Zhejiang.

In recent years, the attractiveness of Chengdu and Chongqing has increased rapidly. AOKANG group has built the West shoe capital Industrial Park in Bishan. Another Wenzhou enterprise Red Dragonfly Group has built a western shoe industry base in Chongqing Tongliang. The two star group has settled in Sichuan Dayi and established the western production base.

The establishment of a large scale industrial park has become the main way for the eastern enterprises to migrate.

Unexpectedly, it became a major source of earnings for these first entrants.

According to people familiar with the matter, in 2003, an Eastern enterprise took over 1000 mu of land in a county in Chongqing, less than 40 thousand yuan per mu.

Then the price of 78 thousand yuan per mu was sold to the later settled enterprises, and the final pfer price was higher and higher.

Only from the pfer of land, the eastern enterprise profits hundreds of millions of dollars, the shoe business has become a land developer.

This seems to be a major mode of entry into western enterprises.

So far, the "Industrial Park", which has been led by Wenzhou enterprises, has spread to Southeast Asia, Africa, South America and other countries.

In 2006, Wenzhou Kangnai group jointly invested about 2000000000 yuan in the construction of "economic and trade cooperation zone" in usurusk, planning to occupy an area of more than 3400 mu, and plans to introduce 60 enterprises.

In April of this year, Wenzhou hahan Shoes Co., Ltd. and Nigeria Lagos Lai Ji free trade area signed an agreement to invest 500 million yuan in the area, and build the largest African shoe making base covering 400 mu. The second phase of the 300 mu land will be introduced into the local shoe enterprises in the form of lease or pfer.

It can be seen that in the operation of these parks, land is undoubtedly the main weight to attract eastern enterprises to migrate to the Midwest and overseas.

However, unlike the big enterprises, the vast majority of the Eastern small and medium-sized enterprises, including leather shoes, go west.

A Wenzhou insider who did not want to be named said that before Wenzhou, there were also some small and medium-sized enterprises, moving through the central and western parts of the country through the chamber of Commerce or acting alone.

But the feedback information is that most enterprises are facing serious financial pressure.

To this end, the Wenzhou chamber of Commerce in a western city has also set up an investment Guarantee Corporation to provide member guarantees for these enterprises.

In addition, in recent years, the cost of land in the central and western parts of the country and overseas has also climbed steadily. In addition, factors such as the straight rise of raw materials, most of the small and medium-sized eastern enterprises have been unable to bargain with the local government.

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