Leather industry chases new opportunities in the Midwest

From January to April this year, China's leather, fur products and footwear industry realized a surplus of 16.919 billion U.S. dollars, an increase of 2.53% year-on-year, accounting for 88.09% of China's total trade surplus. However, leather enterprises still face three major challenges: rising labor costs, rising raw material prices, and exchange rate risks. At present, the leather industry in the eastern region has developed steadily. The development of the leather industry in the central and western regions has become an emerging force.

The reporter learned from the China Leather Association that, as an important industry for export earnings, China's leather, fur products and footwear industry exported 19.344 billion U.S. dollars during the January-April period this year, an increase of 3.39% year-on-year. Imports of 2.346 billion U.S. dollars, a year-on-year increase of 10%. The surplus reached 16.989 billion U.S. dollars, an increase of 2.53% year-on-year, accounting for 88.09% of China's total trade surplus. From January to March, the surplus was 11.929 billion U.S. dollars, a year-on-year decrease of 0.59%.

Export rebound:

It is necessary to further observe that from January to April this year, the year-on-year growth in the output value and profit of China's leather, fur products and footwear industry fell compared to last year, and the growth rate of output value ended at a high rate of over 20%. At the same time, the imports of finished leather, semi-finished leather, raw hides, raw hides, furs, and furs have continued to decline year-on-year; the output growth of light leather, footwear, leather and fur garments has declined compared to last year, and production growth has slowed down. The trend is increasingly evident.

Zhejiang is a major province of China's leather industry, and Wang Dong of the General Statistics Department of Ningbo Customs has not fully grasped whether the foreign trade situation is improving. Wang Dong said: "It may be influenced by the foreign trade situation. At present, the number of single-dollar bills and some large-value bills is not as much as before, and some small-value bills will be more. It is expected that with the previous period, the country will have a series of stability. The implementation of foreign trade policy, Ningbo port foreign trade import and export will have a gradual rebound process, but the intensity and duration of the rebound still need to be further observed."

Insiders say that every spring, that is, April and May, foreign trade companies form orders with international partners and implement the peak period of trade volume. If this kind of growth rate can be maintained even in the next few months, it should be improved. It is said that enterprises have initially spent the most difficult period of foreign trade.

Raw material prices rise:

There is no doubt that companies are not profitable. The current rising cost of domestic labor and raw materials is an irreversible long-term trend. The person in charge of a shoe company compares the labor costs, raw and auxiliary materials, and exchange rate risk to the three big mountains on which the company heads.

According to statistical analysis, the proportion of workers' wages in the current cost of shoes has increased from 13%-15% five years ago to 17%-19%. However, the increase in wages is linked to the benefits of the enterprises. The enterprises have no benefit at present, but their wages are still increasing. Many companies are already overwhelmed. According to footwear companies, the current cost of materials has accounted for about 70% of the cost of shoes, which is 3-5 percentage points higher than five years ago. Raw materials have generally risen about 10% from 10 years ago.

The reporter learned that in terms of the main raw materials for making shoes, the price of the pig's head was 10% higher in 2010 than in 2009, and in 2011 it was 38.5% higher than in 2010. The soaring price of major raw materials has made shoe-making companies Profitable.

Central Region:

The new growth point of corporate profits The reporter learned from the interview that the development of the leather industry in China is based on the provinces. At present, the development of the eastern region is stable, and the performance in the central region is eye-catching. It has become a new and emerging force. From January to April this year, the largest proportion of the industrial output value of leather, fur and products and footwear industry above designated size in China is still the largest in Fujian, Guangdong, and Zhejiang. The three provinces together accounted for 51.29%; Hunan, Jiangxi, Henan, Hebei, etc. The growth rate of the output value of the province is higher than the average level of the industry, with the central area growing by 34.4% year-on-year and 20.2 percentage points faster than the eastern part.

In terms of profits, in the first quarter, the total profit of leather, fur and products and footwear in the country above designated size accounted for the largest share in Fujian, followed by Henan and Hebei, while Guangdong and Zhejiang, the major industrial provinces, declined year-on-year.

A sales manager of a large chemical trading company stated that the central and western regions have become the company's profit growth point: “Foreign trade orders fell by 30%-40% compared with the first half of last year. The decline in the number of companies to compensate for the growth of domestic sales, domestic sales The main areas are the entire central and western regions, and Chengdu, Wuhan, and Chongqing have specific business volumes growing at a rate of 30% to 40%."

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