Zhejiang Shoe Leather Export Enterprises: No Closure Of Mergers And Acquisitions

In July 22nd, the temperature in Ningbo was 36 degrees Celsius.

He drives a modern business car and drives to He Cheng Road, Jiangdong District. He is going to talk to a pawn shop today about property and land mortgage.

In the past few days, Peng Xiaofeng was in a depressed mood and had been wondering how he could bring his business back to life. His Ningbo Xili Clothing Co., Ltd., like many Zhejiang private enterprises, had encountered financial difficulties and was close to shutting down production.

Before that, he thought about selling the business, but no one was willing to pay for his business.

In Ningbo, there are too many garment manufacturers like Peng Xiaofeng.

The acquisition is not very meaningful. He really wants to sell the factory, but others are looking at its land instead of the factory.

For the takeover, Dai Chunming, chairman of Shanshan Stock Exchange (600884), said very clearly: "there are no plans for the acquisition of surrounding garment enterprises. There are lots of enterprises close down recently, which is a good time to buy, but this acquisition is not significant for Shanshan."

Like the clothing enterprises in Ningbo Xili, Dai Chun Ming believes that their ability to withstand environmental changes is poor and their survival depends on low cost. Under the multiple pressures of RMB appreciation, raw material prices and export environment deterioration, the advantages of low cost have disappeared and the elimination will be an inevitable trend.

This view is prevalent in large conglomerates.

YOUNGOR (600177) Dong Fang Liu Xinyu believes that the acquisition of local clothing enterprises is not necessary for YOUNGOR, because only on the factory, copying is very easy, some small and medium private enterprises, and did not form a special core competitiveness.

Yang Yuan, a deputy general manager specializing in stationery export (002103), also said: "we have seen many dangerous stationery enterprises close to business, but honestly, there is no plan to acquire them."

Yang Yuan said that the competitiveness of these enterprises is very clear. As an export oriented enterprise, the difficulties they encounter are the same. A competitive enterprise will do well as well as other companies.

The timing of mergers and acquisitions did not merge. According to the data released by Zhejiang economic and Trade Commission, there were 1.07 enterprises in Zhejiang in the first half of this year, with a deficit of 19.6%, of which the loss of light industry, especially leather, chemical fiber, clothing, printing and so on, was greater than that of the Zhejiang Provincial Bureau of industry and commerce. In the first half of this year, more than 1200 enterprises in Zhejiang Province closed for business.

From the law of M & A, there are two good opportunities for mergers and acquisitions. First, when an industry is at a low level and most enterprises are eager to spend more money than ever before, the cost of acquisition will be the lowest. Two, when the original pattern of the industry is still in the era of intense integration, the chances of mergers and acquisitions will increase greatly.

Obviously, these two points are very applicable to the current private enterprises in Zhejiang, especially in the light textile industry, but strangely, no capital seems to show interest in the existing M & A opportunities.

What the media can see is the "collapse tide", but there is no "M & a tide".

Gong Yi, deputy general manager of Shanshan Venture Capital Co., Ltd. believes that although it seems to be a good time to buy and buy, the real purpose of M & A is to bring capital gains to the capital, or to play the industrial role of the acquired enterprises, while China's light manufacturing enterprises mainly deal with the work of OEM. Most SMEs do not have the value of mergers and acquisitions. If there are difficulties for large and medium-sized enterprises in the future, the possibility of M & A will be greatly increased.

Retain the most competitive part and retain the most competitive part, which is learned by many enterprises from Ge Corp.

Ge CEO Jack?

When Welch took office, he faced thousands of subordinate companies at a loss.

He asked Drucker, the world's best known management scientist, how to integrate these companies. Drucker said, "if your company is valuable, you only need to see if anyone is willing to spend money to buy it."

Drucker's approach made GE one of the greatest companies in the world, because it kept GE the most competitive part.

In fact, a province or even a country hopes to retain the most competitive part, and whether the test is competitive. Drucker's approach is undoubtedly the best way under the market economy.

Many observers in Ningbo have been aware of this change.

A senior executive of Ningbo development and investment group, after observing the development of Ningbo private enterprises in the past twenty years, talked about the problems encountered by private enterprises now, and believes that the market environment is no longer an opportunity for "opening factories to make money". The market needs them to innovate, upgrade and create brand names so as to form competitiveness, otherwise they will only be eliminated.

In this way, the test before Peng Xiaofeng may be much more severe than he imagined.