Fujian Quanzhou Textile Enterprises Transfer Costs To Avoid Trade Barriers

A few days ago, the import and export statistics in January revealed that exports increased by 25%. However, local textile enterprises do not feel the happiness of order growth.

"We should look at Southeast Asian countries. Spin Garment export data have been growing rapidly over the past two years. Order transfer has become a reality. How to deal with it is a pressing problem. " Mr. Huang is a garment exporters in Jinjiang. He admits that customers who have worked together for many years have placed their orders in Southeast Asian countries last year.

Under the tide of this order, many textile enterprises in Quanzhou began to transfer their production to Southeast Asian countries. However, what are the pros and cons of moving to Southeast Asia? Many textile enterprises are also thinking deeply.

　　 Order transfer export downlink

"The domestic market is low in price and low in demand, and many international and domestic. Garment brand The order is gradually transferred to Vietnam. We will look at the Southeast Asian market and turn it into a new market that focuses on development. " Reporters learned that local textile companies including Longfeng textile said they would focus on the Southeast Asian market this year.

Last year, Quanzhou textile clothing The chamber of Commerce held a research meeting of member enterprises. At that time, many leading enterprises such as Gage mentioned the impact of high cost on orders.

"In recent years, our annual export volume is also decreasing year by year, with a drop of 10%, mainly due to cost factors." Bao de group is a large export enterprise, the company chairman Lin Xiangyang believes that from the current trend of textile and clothing exports, the next two to three years may be downward. "They have all moved to Southeast Asia and ASEAN."

Wang Yanzhu, chairman of gage group, also said that the rise of manufacturing industry in Southeast Asia is an important reason for the export of Quanzhou's textile and garment industry. "Vietnam, for example, as far as I know, the cost of Vietnamese garment manufacturing is less than half of that of the Chinese coast, and the tax and fees are only 40% of our total."

For this reason, Pan Shengquan, general manager of Fujian Feng Da textile, who has been engaged in foreign trade export for many years, said: "compared with Southeast Asian countries, the cost of raw materials is 1/3 higher than that of most Southeast Asian countries. The cost of labor in most Southeast Asian countries is 1/3. In addition, the EU will impose a 12% tariff on our exports and will cancel the import tariffs on Southeast Asian countries in the future. This undoubtedly causes Quanzhou's textile and garment export industry to face internal and external troubles.

　　 Transfer costs to avoid trade barriers

As for how to deal with it, Pan Shengquan believes that since the garment manufacturing has become a short board, the era of "demographic dividend" is gone forever. "We should take the initiative to think about it and move to the place where the manufacturing cost is low.

It is understood that Feng Da textile currently has more than 800 workers in Kampuchea, and the company plans to add another autonomous factory. "In 2012, an initial order of US $10 million was made in Kampuchea. What we are looking at is not only the lower local production costs, but also the EU's tariff free policy. " Pan Shengquan once told the media, "as long as we recognize the direction of the market and industry, local enterprises still have room for development."

The success of the Tianhong textile group of Fujian business enterprise is a lesson for local textile enterprises.

As one of the world's largest suppliers of cotton and spandex fabrics, Tianhong specializes in producing and selling high value added cotton fashion fabrics. The company is one of the first domestic enterprises to set up factories in Vietnam. In recent years, it has continued to increase investment in factories in Vietnam, and will shift more and more manufacturing to Vietnam. In the end, "made in Vietnam" also brought huge profits. Tianhong executives have said that in the early days of investment, the company enjoyed more preferential tariff policies and avoided trade barriers from Europe and the United States.

For this reason, many textile enterprises began to ferment away Southeast Asian countries such as Vietnam and Kampuchea. An incomplete statistics from industry showed that only half of the ten textile mills newly started in Kampuchea in the first half of 2012 were opened by Quanzhou people.

"Vietnam and other Southeast Asian markets have always been our consideration, and many member enterprises have begun to actively explore." Quanzhou textile export base chamber of Commerce responsible person also said that Southeast Asia's Burma, Bangladesh, Kampuchea, Vietnam and other places are actively promoting the development of the local textile and garment industry, attracting local enterprises to investigate investment.

　　 Policy blind spots industry is not perfect

While optimistic about the potential of Southeast Asian market, some people in the industry suggested that investment in Southeast Asian countries should not be haste. In recent years, there are many failures in the industry.

Mr. Liu, an industry personage, visited the Vietnam and other places with his boss many times, and maintained close ties with many friends who invested in factories in Vietnam. Last year, a friend shut down in Vietnam factory, which made Mr. Liu feel deeply.

"After all, the political environment is different from the economic environment. Some enterprises go to low labor costs, do not know much about local policies and staff needs, but are often tired of frequent strikes and eventually have to stop production. Moreover, many new enterprises entering the market only have a preliminary understanding of the local policy environment, and have not actually analyzed them thoroughly. With the follow-up local governments' adjustment policies, enterprises can not cope with them. If you really want to invest, you may wish to cooperate with local businessmen, so the feasibility of such a cooperation mode will be even higher. Mr. Liu suggested.

Similarly, after attending last year's Vietnam textile accessories exhibition, Longfeng textile has adjusted the Southeast Asian market development strategy. The new planning decision decides to postpone the opening of the Southeast Asian office.

At the end of last year, Longfeng textile learned the market of Vietnam and its surrounding countries during the exhibition. It was found that because of the lack of textile and apparel supply chain in Vietnam, some of the brands that Vietnam chose to manufacture were not local buyers, and their procurement areas were mostly focused on the more developed countries, such as China, Japan and Korea.

"What we consider is that the local industry supply chain is still not perfect. In the light of the situation of enterprises, if we set up offices and invest in factories in the past, the cost would be very high, and the investment return period would be longer. It's better to meet and build customer resources in regular attendance mode, which is more feasible. " Longfeng Textile Marketing Director Mei Kebing said.

"We have also considered overseas expansion, but we are powerless. In my opinion, enterprises should see clearly two situations, one is whether their own strength has reached the ability to invest and set up factories, and the two is whether the target market is good. Now, when we talk about Southeast Asia, many people are staring at two places in Vietnam and Kampuchea, but these two countries have been investing more and more people in the past, and their policies are not as favourable as those in the early days. Mr. Huang and other industry insiders believe that.