PRD "Cheap Foundry" To The End

"I finally decided to leave Dongguan for home after the end of July."

Xu Mingcai just sat down when he met in July 11th.

In the early 90s of last century, Xu Ming Cai came.

For most of the time, he worked in Hongkong and Taiwan Group Limited (now renamed Asia 00645; HK).

The group has been a foundry for world-renowned sports brands. The founder is a well-known Hong Kong businessman Deng Jian group, known as "Dr. shoe king", with more than 2 employees.

On the morning of June 29th, the group's Dongguan Changan night edge Yong Rong rubber factory (hereinafter referred to as Yong Rong factory) posted a notice that the factory will be formally dissolved in July 31, 2012.

"More than ten years old staff, how many feelings inside."

Xu Mingcai said.

Yong Rong factory is the last factory in the mainland of Hong Kong and Taiwan group. Its main business is

。

Previously, the group has closed in 5 other shoe factories in Guangdong.

Although the latest news shows that the Asian and Asian board of the Hongkong and Taiwan group has decided to continue the operation of Yong Rong factory, but Xu Mingcai believes that the former well-known shoe factory - the Hong Kong and Taiwan group has become a history.

A sudden announcement of dissolution

In July 11th,

The recruitment information is still posted at the gate of Yong Rong factory in the second industrial district of Changan town.

The factory is running orderly and there is no sign of disintegration.

The above recruitment information shows that the Yong Rong plant was established at the end of 1990.

An employee introduces, at present, they mainly produce shoes for Merrell shoes and Timberland shoes.

The announcement of disbanded in June 29th broke the peace here.

"Because of the continuous rise in production costs in recent years and the corresponding increase in the prices of customers, the production and operation of our plant will be seriously difficult. In the future, the bad operating environment will not be improved."

The circular explains the reasons for the dissolution of the business.

The announcement also indicated that Yong Rong factory was the last factory in the Hongkong and Taiwan group. Li Zhiqiang, the company's top leader, solemnly promised that all cadres and staff members would receive full financial compensation in accordance with the law and settle all their salaries before leaving office.

The inscription was signed by Huang Huandong and Li Zhiqiang, head of Yong Rong factory.

Although Xu Mingcai even said "regrettable", he was not particularly surprised. "Before that, I have witnessed the closure of 5 other factories in the Hong Kong and Taiwan group."

Before the Yong Rong factory, the Hongkong and Taiwan Group's 5 other shoe factories in the Pearl River Delta have been closed down.

The Hong Kong and Taiwan group was listed on the Hong Kong Stock Exchange in 1992, when the chairman of the group was Deng Jianqun.

As early as 1982, Deng Jianqun, a businessman from Hong Kong, came to the mainland to set up a shoemaking plant. He joined the Taiwanese businessmen in 1987 to jointly set up factories in the mainland to produce sports shoes. After 3 years, the "Longgang and Taiwan shoe city" was set up in the Longgang District of Hong Kong. This is the initial form of the Hong Kong and Taiwan group.

According to the press, the Hong Kong and Taiwan group has 25000 employees, with a turnover of HK $about 2000000000 and an annual output of more than 25 million pairs of famous brand sports shoes.

The Hong Kong and Taiwan group had 6 factories in the mainland, and 3 in Shenzhen and Dongguan.

Shenzhen has Longgang Hongtai shoe making Co., Ltd. (hereinafter referred to as Hongtai shoe making), Han Tian Shoes Co., Ltd. located in Pinghu (also known as Pinghu shoe city) and Pinghu East shoe shoe laminating factory; Dongguan has Tangxia Hongye shoes manufacturing Co., Ltd., Hongfa shoe material Co., Ltd., Yong Rong factory.

The annual report of RTHK group showed that in 2007, the group received "satisfactory results" (annual report), with a turnover of US $102 million, and profit attributable to shareholders increased by 36% to US $7 million 600 thousand over the previous fiscal year.

{page_break}

5 shoe factories have closed down.

With the whole world

With the advent of the Hong Kong and Taiwan group, the performance of Hong Kong and Taiwan began to decline.

In the 2008 annual report of the RTHK group, Li Zhiqiang, then chairman of the board of directors, wrote in the opening paragraph: "the Hong Kong and Taiwan group has gone through an extremely difficult year.

Like other export processing plants, RTHK has encountered unprecedented difficulties and challenges.

This year, the number of employees in Hong Kong and Taiwan decreased by 2000 to more than 7000.

At the same time, the Hongkong and Taiwan footwear companies in Shenzhen and Hong Kong experienced a relocation.

Xu Mingcai introduced that in the middle of 2008, as the Shenzhen subway repaired to Longgang, just needed the land of Hongtai shoes, the Hongkong and Taiwan group decided to move the production facilities here to Dongguan.

Before the relocation, Hong Kong and Taiwan footwear industry is the main operating base of the Hong Kong and Taiwan group. Data show that as of fiscal year 2007, its capacity accounts for about half of the Hong Kong and Taiwan group.

In the 2008 fiscal year, the RTHK group suffered its first loss in 8 years, with a loss of $4 million 100 thousand.

"At that time, the group gave employees the right to choose independently, but many people did not want to go to Dongguan, because they worked in Shenzhen for many years, and many people settled down."

Xu Mingcai said that the relocation caused some staff turnover.

Meanwhile, under the influence of multiple factors such as the rising cost of manpower and the global financial crisis, the performance of RTHK declined further.

This situation worsened in 2009.

Unable to reach a set of feasible pricing models with its main customers, RTHK announced that it was no longer producing the footwear for the main customers who account for 60% of the group's turnover.

The Hong Kong and Taiwan group has stopped working with Reebok, an old customer of over 20 years, and has shut down factories and severed employees.

The RTHK group finally decided that "as the turnover of the group will fall sharply in the coming year due to the reduction of the largest customer orders, the directors of the group decided to accelerate the pace of restructuring and suspend all production operations of the group in Shenzhen and the production business of the two Dongguan plant."

So far, the group's factories in the mainland are only left by Yong Rong factory.

A broken arm is hard to beat.

In the fiscal year ended March 31, 2010, the turnover of the RTHK group dropped sharply from $64 million in the previous year to $18 million, but the profit rose to $2 million 300 thousand, up from $300 thousand in 2009.

Reporters combed the annual report found that this is mainly due to the group's demobilized staff to compress manpower costs, and the sale of redundant equipment and assets.

After the "broken arm to survive", the Hong Kong and Taiwan group has great confidence in revitalized the flag.

"Hong Kong and Taiwan should break through this dilemma, or pfer the industrial base to countries with lower production factors such as India or Bangladesh, or to reintegrate them out of the role of 'export processing plants' and promote the status of the industrial chain and the value chain in an all-round way."

The group said in its 2010 annual report.

But these efforts are hard to overcome.

In the fiscal year ending March 2011, the Hong Kong and Taiwan Group's turnover was $29 million 99 thousand, an annual growth of 60.9%, but a net profit of $797 thousand was recorded, with a reversal of 65.3%.

In the fiscal year ending March this year, its turnover amounted to $27 million 970 thousand, down by 4% year on year, and a loss of $1 million 540 thousand.

There are many reasons why the Hong Kong and Taiwan group has stepped down step by step.

Xu Mingcai said, one is the economic downturn, and in terms of cost advantage, it is no match for the factory of Fujian, another shoe making cluster. For example, the Hongkong and Taiwan group has to have at least $13 for a pair of shoes, but some factories in Fujian only have 12 dollars.

Xu Mingcai also believes that Li Zhiqiang has made some mistakes in employing people.

Huang Rirong, executive vice president of Dongguan Association of foreign investment enterprises, said in an interview with reporters that similar foundry factories with Hongkong and Taiwan group have common features. The added value of their businesses is not high, and the cost is very high.

He added that even if the government introduced remedial or supportive measures, it could only "tide over the difficulties in the short term". In the long run, it would depend on the enterprises themselves.

{page_break}

Factory reservations Hong Kong and Taiwan group into history

Despite the announcement of the dissolution of the business, it is still "dead and alive."

In July 4th, a letter from the board of directors of Anning Asia Limited (hereinafter referred to as "Asia safe Asia") was sent to the senior management of Yong Rong factory. "Our company is not surprised to discuss the matter with the company prior to the decision to dissolve the factory," he said.

What is the relationship between Ann Asia and Yong Rong factory?

It is understood that Li Zhiqiang is the chairman and controlling shareholder of the former board of Hong Kong and Taiwan group. However, in early 2011, Baoqiao financing Co., Ltd., representing STARCROWNCAPITALLTD, acquired all the issued shares in the capital stock of the Hongkong and Taiwan group. Li Zhiqiang himself resigned as executive director of the Hongkong and Taiwan group in February 16th last year.

In April of this year, the RTHK group was renamed Asia safe.

Asia's main business is changing after the Hong Kong and Taiwan group is backdoor.

Earlier this month, Asia announced that it was negotiating with the independent third parties to acquire a majority stake in a logistics company in Indonesia.

In July 3rd, Li Zhiqiang was informed of the above disbanded news. But, "before making any decision about the future of your factory, we hope to clarify the intention of your factory to continue its business."

We need to collect relevant information and discuss with you to evaluate the operation and operation of the factory.

We hope that you will maintain a status quo with your factory at this time and issue a supplementary circular to its customers and staff. It is a preliminary decision that they have been dissolved in July 31, 2012 by their earlier announcement that the dissolution of the plant and their factory in July 31, 2012 must be approved by the consent of the ultimate holding company.

The recipient of the letter is director Ye Yu Chan of Asia Pacific.

The reporter found that he was appointed chief executive of the group in June 13th this year.

The Asia Pacific board of directors still entrusted Li Zhiqiang with the affairs of the escrow group.

"The Hong Kong and Taiwan group was renamed this year after being purchased by Asia Pacific.

Li Zhiqiang was a former boss. He quit early, and the board of directors entrusted him to manage. "

Huang Huandong, director of Yong Rong plant, told reporters.

Perhaps because of the intervention of the Asia Pacific region and the news that "the factory will be dissolved in July 31st", Huang Huandong replied to reporters, "no, continue to operate."

Yesterday, the reporter learned from Xu Ming Cai Department that the Asia Pacific board of directors has decided that the Yong Rong factory will continue to operate.

The factory staff will get service age compensation, and after compensation, employees have the right to choose independently.

"Although the Asia Pacific region also supports the retention of this factory, the RTHK group is history."

Xu Mingcai said.

Reporter observation

PRD "cheap foundry" to the end?

Not long ago, the Sona electronics factory, located in Changan Town, Dongguan, fell with the Hongkong and Taiwan group.

This is not an isolated case.

Guyue toy factory, a toy giant located in Humen Town, has also been declared closed. This factory was founded in 1995, once the boss behind the scenes is Li Jiacheng, the richest man in Hongkong.

Public information shows that whether electronic or toy, clothing or shoemaking, since 2008, a large number of foreign capital enterprises have been evacuated from the Pearl River Delta.

"Basically, you can't stand feet."

The owner of Tai Cheng toy factory in Houjie Town, bluntly speaking, is on the one hand

The impact of the European debt crisis, on the other hand, is that our economic growth is slowing down.

Fang Baijin said that the main problems facing the foundries are orders and manpower.

His orders are also deteriorating. This year, 1/3 is less than that of last year. Even in terms of wages, recruitment is still hard.

In addition, the problem of supply and demand is also very serious. Oversupply has led to bad competition among enterprises.

"The government wants us to pform, but how to turn it?" in Fang Fang Jin's view, the better way is still "moving west" and reducing labor costs.

But Huang Rirong, executive vice president of Dongguan Association of foreign investment enterprises, said, "if you pfer to other provinces, the cost of manpower will eventually catch up.

It may be the same in two or three years. "

Chen En, director of the Hong Kong and Macao Economic Research Institute of Jinan University, believes that although the decline of the foundries has a macroeconomic impact, the main reason lies in the enterprises themselves.

In particular, he pointed out that it can not simply say that the "cheap contract" mode has come to the end, because the foundry itself is also hierarchical, for example, there are also foundry industries in Taiwan, but it is "advanced OEM" and is a high value-added foundry.

"At present, these factories in the PRD should consider how to increase the added value, how to extend the industrial chain, and how to increase the proportion of products sold domestically."

Chen En said.