Five Big Bad Wenzhou Shoe Companies Struggling Through Winter

Five big profits

What drives Wenzhou businessmen with strong vitality and extremely sensitive smell to die?

On the morning of 2 am, when reporters interviewed in Liushi, China's electrical appliances capital, they heard the most: "the prices of upstream raw materials are rising, while the prices of downstream electrical appliances are not up, and profits have been diluted."

The size of Liushi town is not large, but it has gathered 3000 low voltage electrical appliance enterprises, which are mainly distributed by CHINT and Delhi.

Pan Yu, the owner of the copper cap production enterprise, calculated the accounts to reporters: 3 years ago, the price of copper was more than 10 thousand per ton, now it is fifty thousand or sixty thousand; other non-ferrous metals, which price is not doubled?

The product is subject to terminal price but can not rise.

With the international oil price surging to 140 US dollars, the domestic oil price and electricity price have been raised. The price of raw materials has been increasing continuously. The price list of polyester yarn with oil as the primary raw material has been raised by journalists, and the price of 1 tons has increased by more than 1000 yuan.

Ruian's latest survey shows that 31 enterprises are spending more than 3 hundred million on raw materials this year.

Labor costs also rose sharply with the implementation of the new labor law.

Zhou Dewen, President of the Wenzhou SME Promotion Association, said that now every worker has to increase the cost of about 5000 yuan per year compared with the past.

This has great impact on labor-intensive industries.

Reporters in Longwan Industrial Park encountered a postman who was posting advertisements for jobs. According to him, it was impossible to recruit people with last year's salary, and it was difficult to recruit skilled workers by raising hundreds of dollars in wages.

The appreciation of RMB has entered the "6 era" with an increase of 20%.

It is estimated that the profit rate of the garment industry will drop by about 6% when the value of RMB rises by 1%.

The average profit of the garment industry is only 10%.

In fact, bad money also includes macroeconomic regulation and control policies.

The export tax rebate was abolished in fiscal policy, and the profits of export enterprises were directly taken away. The average business of Xie Fucheng's medium-sized enterprises is millions of dollars per year.

Under the tight monetary policy, the central bank raised interest rates 5 times in a year and raised the deposit reserve ratio 16 times. Commercial banks strictly adhered to the loan quota, making the bottleneck of financing difficulties continue to increase.

Like Wenzhou's large enterprises such as the Great Wall, cloud top and Walda, annual interest and expenditure are over million yuan.

"A pair of shoes earn 5 cents, you calculate, how much profit do we have now?"

Xie Fucheng was very excited about stopping production.

According to statistics, in the first half of this year, the production cost of Wenzhou shoe enterprises increased by 20% over last year.

Wenzhou shoe and leather industry association latest public data show that this year, a variety of factors are estimated to squeeze at least 15% of the profits of enterprises, especially foreign trade enterprises.

The average profit of manufacturing industry is about 10%.