OEM shoe enterprises may not be profitable if they move in

“although Guangdong has been talking about” replacing birds with empty cages “, most enterprises chose to wait and see in the past few years.” Hong Qihui, honorary president of the Hong Kong Federation of small and medium enterprises, said that he did not expect a serious labor shortage in Dongguan at the beginning of this year. More and more new generation of migrant workers can’t stand the monotonous work and life, and the old employees have returned to the mainland to get married and have children, and they are not willing to leave their hometown. As a result, the factory can only be moved to their “home”. Hong Qihui has a OEM enterprise of garment products in Dongguan, Guangdong Province. 1n April this year, he also chose to invest and build a factory in Chenzhou, Hunan Province, to transfer part of the production capacity. Another reason for moving in is that it is more and more difficult to export to Europe and the United States, while wages in the mainland are generally rising. He believes that the main battlefield in the future must be the domestic market< However, the cost of moving to Hunan can not be reduced too much. Because the profit is too low, many friends close the factory and take money to speculate in real estate and stocks" There is basically no profit this year. The idea now is to survive first. " Hong Qihui said that he hopes that after the reshuffle, the number of OEM factories will be greatly reduced in one or two years, so as to have more pricing power Chen Xiaoming, chairman of Jiahe shoes group, is busy planning to invest and build a factory in Ganzhou, Jiangxi Province. As an OEM company, his factory has been losing money almost every month since 2008. Compared with coastal areas, the labor cost in the mainland is not much cheaper how much can the cost be reduced when the coastal OEM enterprises move in? Liu Weidong, Deputy Secretary General of the Shenzhen Leather 1ndustry Association, said that at least 10% to 15% of them are attractive to OEM enterprises. He pointed out that the “pay rise wave” has nothing to do with the relocation of enterprises in the leather industry. As a traditional labor-intensive industry, the hard cost of leather industry is very high. 1t began to move in very early and continues to this day according to Cui Shuquan’s calculation, the average labor cost of coastal enterprises entering Xiyong micro power park can be reduced by about 30%. However, this is only the average cost of all enterprises. For Foxconn, Guangda and other OEM enterprises, the wage level is not significantly different from that in the Pearl River Delta and Yangtze River Delta “our salary is no lower than that of Shenzhen Longhua.” Outside the Foxconn factory building in Xiyong micro electric park, Foxconn employee Xiao Zhang told China Securities Journal that the basic salary for general workers is about 950 yuan / month for food and housing, and 1450 yuan / month for not including food and housing. With overtime, the total salary is less than 2000 yuan / month, which is similar to that of general workers in Shenzhen for enterprises, compared with labor, the mainland has more advantages in land, water and electricity prices. Taking Bishan 1ndustrial Park as an example, the average cost of large industrial electricity price is 0.6 yuan / kWh; The operating water consumption is 4.6 yuan / ton; The price of industrial land is 120000 yuan / mu, about half of the average price in the Pearl River Delta. However, if the logistics cost is included, the comprehensive cost of enterprises is not as much as expected “according to different product types, our comprehensive cost decreases by about 5% to 10%, most of which are at the level of 5%.” Sun Mingzheng said that although the cost of land and other materials has decreased, most of the raw materials are imported from Japan, South Korea and Germany, and the freight port is centered in Shanghai. After setting up a factory in Bishan, the cost of river transportation from Shanghai to Chongqing will increase a lot if we only consider the cost, sun Mingzheng can set up the enterprise in the more remote west, but the cost is not the only factor” Our products are changing very fast and we have to cooperate with our customers. ” Sun Mingzheng said that if a laptop is not delivered to the terminal for sale within one or two months, the price may fall. Considering the transportation cost of enterprises and the convenience of serving customers, it is necessary to make layout around customers however, supporting services for Foxconn and other OEM enterprises is only part of the reason why Chuanjing technology has set up a factory in Bishan. Changhong Electric Appliance in Mianyang, Sichuan, LED industry in Chongqing and automobile industry will become the business growth points of Chuanjing technology” We are expanding capacity, not moving. ” Sun Mingzheng stressed that the parent company, Weijing technology, set up a factory in Suzhou seven years ago, went to Ningbo four years ago and set up a factory in Bishan this year. The original factory is still in normal operation in the Yangtze River Delta according to Yang Gang’s statistics, there are a variety of coastal enterprises coming to Bishan 1ndustrial Park to settle down, some expanding production, some transferring part of production capacity, and some moving as a whole. Generally speaking, the proportion of expanding enterprises is more this phenomenon also exists in Xiyong micro power park. Cui Shuquan said that in addition to the “hen brings chicken” model, the park also has its own “chicken” relocated from the park, accounting for about 30%. Some of them want to come to Chongqing to expand the market, and some of them have got new orders in Chongqing and need to set up factories on the spot “the most important thing for an enterprise is to focus on the market. 1n addition, it has a cost accounting system. Once it feels cost-effective, it will come over.” Zhang Tingting, director of the Park Service Department of Chongqing 1ndustrial Service Center, has received a number of enterprises who have come to Chongqing for inspection. She believes that cost is only one of the factors for enterprises to consider internal migration, and more importantly, the logistics radius for customer service and the degree of upstream and downstream industrial agglomeration Wang Jun, President of the 1nstitute of Social Sciences of Sun Yat sen University, believes that the promotion of land price is the main factor in this round of industrial transfer. Although Guangdong has long proposed industrial upgrading, the land price gap between Guangdong and the mainland is not particularly large, and the motivation for enterprises to take the initiative to move is not strong. After the financial crisis, the price of land in the first tier cities has soared due to excess liquidity, which has a crowding out effect on the manufacturing enterprises with large land demand the most important thing for an enterprise is to focus on the market. 1n addition, it has a cost accounting system. Once it feels cost-effective, it will come over

Back to list