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Shengzhou Necktie Industry Association to the Deputy Secretary-General Zhou Qingyu said that buyers from around the world, retailers, recently gathered in Shengzhou, in the tie at least 70% share of the global production of industrial clusters within each test, torture, the bottom line of manufacturers to bear.
Shengzhou Tie a collective price increases signal is from the April 2 issued.
The same day, Shengzhou Necktie Industry Association general, Barbados Group chairman was elected president of yao. His calculations at the meeting: first, exchange rate adjustment, at present nearly 5 percent revaluation last year, April 15 U.S. dollar against the yuan central parity for the 7.724 yuan, 6.996 yuan this year, is the same day; 2, the export tax rebate cut 2%, land tax increase 0.3%; 3, Labor Contract Law implemented, the cost of sales increased by 1.5%; 4, silk raw material price instability and the beginning of white steam filature 167,000 yuan per ton, are 185800-190000 yuan per ton, up 12.5%.
These combination of factors, pressure in the average price of exports is about 2.35 U.S. dollars / tie on a small section, a direct result of the whole industry into a low-profit or losing money. Yao suggested that if the price increase of 5 cents for each tie, necktie industry in Shengzhou you can get an 20 million yuan net profit. Zhe Fan confession obtained was unanimously agreed.
Shengzhou Tie Association, convened by the United States RANDA supplier of the company’s seven meetings, announced that on the basis of the original price, each silk tie price increases 0.2 U.S. dollars. The reason why the first aim RANDA company, is because it is the largest Shengzhou neckties buyers. In 2007, the company’s tie Shengzhou purchases more than 2000 million U.S. dollars, of which about 80% of yarn-dyed silk neckties, tie total exports accounted for more than 10%.
The next day, the Association to meet again. 6 Japanese market suppliers, the collective agreement signed at the price increases.
However, different voices soon emerged. Tie Association, a source, some local companies refuse to trade associations and price increases initiatives, in their view, market conditions, prices by themselves have the final say. If more orders from buyers not to participate in price increases the flow of the enterprise, then the collective price increase will undoubtedly become a bubble.
To this end, each tie-site visits to relevant business associations, but the “lobbying trip” with little success. Some enterprises have expressed a variety of different views: The first trade association does not have a mandatory binding; second is worried that their orders for transfer to other enterprises; 3 is due to the large and small processing plants there are differences in production costs, the price increase should be differences; Fourth, give equal treatment to domestic and foreign trade, preventing buyers “Quxianjiuguo.”
The tie Industry Association yao were very delicate situation. April 14, the U.S. company who visited RANDA Shengzhou, when he learned that after the price increase crisis, canceled dinner with yao agreement.
In each other’s eyes, the tie industry, chairman of the Association may be a “troublemaker.”
Competition pricing
“Wait and see.” Whirlpool of living in the event of price increases RANDA Peng Zhong, senior manager, said that it neither accepted the price increase, nor a refusal.
RANDA, Inc. is the world’s largest men’s jewelry buyers, their Shengzhou Office since its establishment in 2002, each year more than 2000 million in purchases. Most of these ties in the United States some large-scale shopping centers and supermarket shelves.
If each woven silk tie price increases 0.2 U.S. dollars, then the RANDA companies, an increase of about 2 million U.S. dollars a year purchasing costs. So, RANDA willing to give up this part of the profit margin?
“The United States is an unprecedented fierce competition, the retail industry, buyers say goodbye to us is very easy thing to do.” Peng Zhong said, RANDA can not pass on costs to end-retailer. However, from the generally less than 3 U.S. dollars of export prices to near 50 U.S. dollars in the United States between the end retail price, whether there are areas which?
Peng Zhong said the tie enterprises in Shengzhou can not skip the middleman, the direct and terminal vendors trade occurs. Because the U.S. retail industry is a very delicate area of specialization, brokers this group has its own independent living space.
Peng Zhong said, to a certain extent, brokers, professional design agencies to guide the tie of the global market trends, rather than manufacturers or retailers.
However, the tie enterprises in Shengzhou obviously want to be deprived of their pricing power. “We lost the tie Wal-Mart’s price 3.5 U.S. dollars, the profit of about 1 U.S. dollars.” RANDA in with the wall separates the company’s offices in Shengzhou’s “Taishen tie” and its general manager Zhang Fan says.
Shengzhou City Foreign Trade Bureau data show that, including Barbados, Yashi Lin, guinea Lang, including more than 10 Shengzhou neckties enterprises have set up offices overseas. In the world-famous Italian design center section ink tie, there are a number of companies settled in Shengzhou. Their objectives are: to lead the tie industry, fashion trends, and enter the terminal part of foreign sales.
“We want to raise prices persist in the end.” Zhou Qingyu said the Chinese silk neckties over 95% of exports are concentrated here, a large number of orders can not be transferred to the rest of the world. Yao said that China tie industry to be “self-help.”
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