Wenzhou Shoe Downtime Effect Amplifies Industrial Chain Risk

Wenzhou shoes export suffered "cold current" for 08 years, 1 and February, the number of footwear exports in Wenzhou was 98 million 440 thousand pairs, with a total value of 440 million US dollars, up 1.13% over the same period last year.

In January, it exported 280 million US dollars, an increase of 25.32% over the same period last year, and 159 million US dollars in February, a 24.54% decrease compared with the same period last year.

Excluding the February Spring Festival and other reasons, the downward trend is still obvious.

Wenzhou shoe 60% is used for export, so it has the same sensitivity to anti-dumping, export tax rebate reduction, US dollar depreciation, labor cost and raw material price increase.

Because of Wenzhou's local shoe enterprises, most of its trading partners are from the European Union, and most of Guangdong's orders are different from the US. Therefore, Wenzhou shoe industry has been paralyzed in the last half of last year.

However, since the beginning of 08, labor costs have suddenly increased due to the implementation of relevant regulations. At the same time, many domestic shoemaking Export enterprises are turning their eyes from the us to the EU countries, and the industry competition is intensified. The Wenzhou shoe enterprises with slightly profit margins are facing a grim price war, leading to some small and medium-sized enterprises opting out.

The most direct manifestation of the industry level is the continued decline in profits.

According to the report provided by the association, in the past 08 years, due to various comprehensive factors, it is estimated that at least 15% of the profits of enterprises, especially foreign trade enterprises, have been squeezed.

After decades of development, Wenzhou shoe industry has formed a complete industrial cluster.

A shoe company is equivalent to a vehicle plant, which is only responsible for assembly. There are dozens of enterprises with the heels, sole, shoe leather, shoe leather, shoe machine and accessories. Therefore, the more than 70 shoe companies that have stopped working in pition will have a magnifying effect in the whole industrial chain.

AOKANG, Lilis and other Wenzhou shoe enterprises insiders reflect that the problems faced by their upstream suppliers are even more grim. As it is difficult for them to shift all the pressure of cost increase to the more powerful enterprises in the downstream, some supporting enterprises choose to go bankrupt or half stop.

Wenzhou shoe leather industry association uses "difficult steps" to describe local small businesses, and many enterprises can only open one of the three production lines.

The average net profit of Wenzhou shoe enterprises in the past year is about 5%, and according to this calculation, the loss of footwear industry, which takes 08 years as the export oriented industry, will not be an individual phenomenon.

In recent years, Sichuan, Taizhou and other provinces and cities shoe industry base rise, Taizhou shoes price is lower than Wenzhou shoes, domestic overcapacity phenomenon is obvious, even without the impact of international trade, shuffle is inevitable.

At present, large export enterprises are now raising prices to maintain a profit and loss balance.

At present, Wenzhou shoe industry export enterprises are affected by the backward industrial structure and the rising cost, and the industry is facing the reintegration.

Small and medium-sized enterprises, which rely heavily on products and low prices to occupy the market, are facing the risk of withdrawing from the market or being taken over by large enterprises because they can not bear the pressure of rising costs.

And in the footwear industry of Wenzhou, enterprises that have established brand and reputation can pass the price pfer to ease the impact of rising costs on profits through the advantage of product structure.

Therefore, banks should be more cautious about the credit granting of Wenzhou footwear industry and export trade credit secured by accounts receivable.

The decline in the international competitiveness of the export products of small and medium-sized shoe making enterprises in Wenzhou may reduce the value of future accounts receivable and affect the quality of bank credit.