This Jiangnan Leather Factory Is Really "Closed Down", But Who Will Be Next?

In August 8th, the Wenzhou evening news issued a notice that the "Zhejiang Jiangnan Leather Co., Ltd. bankruptcy liquidation re allocation plan" was approved by all the members of the creditors Committee on 12 May 2018, and was approved by the civil rulings No. 1-7 of Wen long Shang, Wenzhou Longwan District People's Court (2011) on July 2018 18. According to the 116th provision of the People's Republic of China enterprise bankruptcy law, it is executed by the manager and two times allocated to the bankrupt property of the company, and this distribution is the final distribution.

According to the announcement, the two allocation was implemented in August 10, 2018, and the final allocation of the bankrupt property was RMB 6338292.36 yuan.

Where did the "collapse" fire come from?

In 2011, the company's legal representative, Huanghe run road, is still unknown.

But in 2013, Huang crane suddenly became a celebrity. Many peddlers selling leather bags all over the country were circulating a recording of "Jiangnan leather factory director Huang Hexie's big money to take people on the road" to solicit business: "Zhejiang Wenzhou, Zhejiang Wenzhou, the largest leather factory, Jiangnan leather factory closed down......"

The recording became a popular buzzword in the 2013. It was dubbed by netizens as "yellow crane body" or "Yellow Crane recording".

The company suddenly disappeared and the workers paid their wages properly.

Statistics show that since the start of operation, Jiangnan Leather Co., Ltd. has been operating well, achieving sales of 341 million yuan in 2010, with a profit of 34 million 250 thousand yuan.

In the same year, a new factory was opened in Taizhou, and the output value of the two factories amounted to 500 million.

It is worth noting that, even in the most prosperous business, Zhejiang Jiangnan Leather Co., Ltd. has never produced a finished leather bag, its main project is PU synthetic leather manufacturing, synthetic leather raw materials sales.

The good operation lasted until 2011 when the director Huang crane ran away.

As for the reason why Huang crane has run away, it is still a mystery because his whereabouts are still unknown.

Huang Zuoxing, chairman of the board, produced nearly 130 million yuan and paid back the guarantee and wages of the factory.

The inspiration behind the passage

Although Huang crane did not run away with his sister-in-law, nor did he sell shoes and bags, the final bankruptcy of Jiangnan leather factory is an indisputable fact.

According to the "2018-2024 year China leather industry market depth analysis and investment prospect forecast report" released by Chi Yan research, China's leather industry has overcapacity and is dominated by small and medium-sized enterprises.

Due to the low standardization of raw materials and products, tanning, dyeing and matching, leather and other links in leather processing are mainly dependent on manpower, and the level of mechanization is not high.

According to the goal set out in the "12th Five-Year" planning guidance of leather industry, the proportion of large and medium-sized enterprises in leather making and shoemaking industry in 2015 will be 20% and 28% respectively, and small enterprises will occupy the majority market share.

Most small and medium-sized enterprises have low R & D design capability, and the phenomenon of product homogenization is prominent, resulting in low capacity overcapacity and serious pollution.

The average income of leather enterprises is small (10000 yuan).

The number of small enterprises in various sub sectors of leather industry in China is relatively high.

After 2011, China's clothing and footwear consumption growth continued downward, the export advantage weakened, and the leather industry growth rate was also affected.

In 2016, the income and profit of leather, fur, feather and its products and footwear industry increased by 3.69% and -2.43% respectively. The growth rate was the lowest level after 2000, and the prosperity index and entrepreneur confidence index of leather industry continued to decline.

In 2017, the leather industry achieved 1 trillion and 470 billion revenue, down 2.81% from the same period last year, and realized net profit of 89 billion 600 million yuan, down 1.75% compared with the same period last year.

China's leather industry revenue growth continued to decline after 2011.

The profit growth rate of leather industry continued to decline after 2011.

As the industry boom declined and the government increased environmental protection requirements, backward leather production capacity was phased out.

In 2010, the output of China's light leather reached 749 million meters, and then showed a downward trend, and the industry concentration increased.

In 2016, the output of light leather in China was 735 million meters, a slight increase of 3.31% over the same period last year. In 2017, the output of light leather remained stable in China.

Output of light leather industry in China in recent years

2018 where is the import and export of leather?

The classification of leather is various. At present, it is mainly classified according to the types and uses of raw materials. According to the types of raw materials, it can be divided into cow leather, sheep leather, pig leather and so on. The largest and most extensive use is cattle leather. At present, China's cattle hide is about 70%, sheepskin 18%, pigskin 10% and other raw skin 2%.

From this information, it can be concluded that the largest demand for leather industry in China is cattle leather, and the largest supplier of cattle leather imports is the United States on the other side of the Pacific.

The United States is one of the largest leather suppliers in the global leather processing industry. Raw material exports account for more than 90% of the total output of the United States.

China is currently the largest producer of leather and leather goods in the world, and the largest market for raw material exports in the United States.

In 2017, China became the largest buyer of American cowhide, with more than $871 million imported, accounting for more than 50% of the export of American cowhide.

In 2017, the total export volume of us cowhide was only more than 1 billion US dollars.

China is the most stable market for cowhide in the United States, and imports about $1 billion a year.

In 2018, President Trump opened trade war with China.

The Customs Tariff Commission of the State Council issued a notice yesterday that it decided to levy tariffs of 25%, 20%, 10% and 5% on the 5207 tax items originating in the United States for about 60 billion dollars.

According to the announcement, in July 11, 2018, the US government released measures to levy 10% tariffs on goods imported from China for about 200 billion US dollars.

In August 2nd, the US trade representative said it would raise the tax rate from 10% to 25%.

The US side deviated from the consensus of the two sides in many consultations, unilaterally escalated trade friction, seriously violated WTO rules, undermined the global industrial chain and free trade system, substantially damaged the interests of our country and the people, and would also have a negative impact on the world economic development, including the United States.

If the US side persists in putting its tariff measures into effect, China will implement the above tariff increase measures.

One of the most noteworthy is that China has imposed a 5% tariff on the whole raw cowhide of >16 kg, which is 41015019 of the tax code of origin.

As we all know, the United States is the largest exporter of raw cattle in the world, and China is the largest importer of raw cattle in the world. According to statistics, nearly 50% of China's imported raw cowhide comes from the United States, while 41015019 of the raw cattle hide category of the tariff code 4101 is the raw cow skin category with the absolute amount of superiority.

According to the monitoring data of China Leather Industry Information Center, in 2017, China imported a total of 41015019 kilograms of raw cow hide 29658902, worth 1702660557 US dollars, with a total weight of >16 kg, of which 13753298 imports from the United States accounted for 891886164 US dollars, accounting for 46.37% of the value, accounting for 52.39%.

At present, China has imposed a tariff rate of 5% on the tariff code originating from the United States. If calculated according to the import value in 2017, China's tanning enterprises will need to pay a huge tariff of US $44594308, which is worse for the tannery enterprises in the depressed market.

Take the import data of a large shoe upper leather in Fujian as an example, in June 2018, the company imported 78340 pieces of leather from the United States, worth 4902326 US dollars. If the tariff was formally implemented, the company would need to pay an additional tariff of $245116 per month.

Data obtained from China Leather Industry Information Center since 2017, China imported 41015019 of the US >16 kilograms of raw cowhide data. We found that since entering 2018, it has been affected by various factors. The number of raw cowhide imported from the United States has shown a slow downward trend, and the average export price of American raw cowhide has also been falling, which is close to the lowest point in 2008 when the demand side market is not strong.

It is not just raw cowhide. We see that China imports the largest category of blue wet cowhide. 41041111 full grain unsplit or grain split blue wet cowhide is also added to the 5% tariff list.

In 2017, China imported a total of 296290163 kg of blue wet cowhide, valued at US $807059179, of which the number of imports from the United States reached 54112340 kg, accounting for 18.26% of the value of 202933462 US dollars, accounting for 25.14%.

According to the import volume of 2017, China's tanning enterprises will need to pay a huge tariff of US $10146673.

The following figure shows the trend of China's import of us 41041111 full grain non split or grain split blue wet cowhide in 2017 1-2018 March.

However, this is just the tip of the iceberg in the tax increase list. According to the statistics of China Leather Industry Information Center, the tax increases on the US products involve 96 8 bit tariff code products in leather industry, covering leather chemicals, raw leather, finished leather, box bags, clothing, shoes and even machinery and so on.

Among them, 5% of the main products of tax increase are all kinds of raw materials, 10% of which are mainly footwear, footwear and footwear, and 15% of the main products are some fur, bags, rubber and footwear products. 25% of the tax increases are related to various leather tanning materials, wet blue leather and most bags.

The detailed list is shown in the table below.