Dongguan Promotes Enterprise Pformation Through Various Means

"The profit of less than 10 points can make the enterprise live very moist, and the large number of stable overseas orders is the biggest guarantee for most enterprises in Dongguan to maintain stable profits." the president of Huajian group still can not stop being fascinated when recalling the situation a few years ago. The group is the most important shoe-making enterprise in Dongguan. Among the top 50 internationally renowned footwear brands in the world, 15 brands of women's shoes are manufactured in the shoe factory under the group's shoes.

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Dongguan once lived on the "world factory" and is now beset by this name.

In particular, under the impact of the financial crisis, the inherent drawbacks of Dongguan's industrial structure and traditional development pattern are exposed.

In the past, the "world factory" is groping for a road suited to its own pformation.

Once the scenery was born with a hidden disease.

"World factory? NO!"

This term, which once brought pride and fulfillment to the city, is now a sensitive term which Dongguan is reluctant to mention in public.

Nevertheless, Dongguan is still the "world factory".

There are all kinds of brands: NOKIA, Nestle, and so on.

In the Hongtian handbag factory of Wang Niu Dun town in Dongguan, the common "CSCG" bag on the market in Brazil is displayed in the sample display window on the first floor, and the "PUMA" sports satchel can also be seen inside.

"Do not look at these world famous brands under the spotlight is boundless scenery, in fact, they are stitched out by ordinary workers."

Yuan Bojiang, a handbag factory owner, was a little proud of his casual remarks.

No one can tell how many ordinary factories in Dongguan are working day after day for the prestigious international brands.

Even the world famous brand "Prada", which flaunts "Italy production", has been exposed by the media from xingxiong shoe factory in the overseas Chinese industrial town of Daling mountain town, Dongguan.

Since reform and opening up, relying on the geographical advantages and cheap labor advantages of neighboring Hong Kong and Macao, Dongguan has started from "three to one supplement", and has been developing an export-oriented economy by introducing foreign capital, and has stepped out of an industrial shortcut.

But in this seemingly prosperous "world factory", a number of annoying diseases are slowly growing.

A fuse detonated the "soft rib".

"From 2006 to 2008, the average export price of a pair of shoes for women in our factory was between $15 and $16.2, although the gross profit of a pair of shoes was only 0.7 dollars to 1.1 dollars, but the profit below 10 points can make the enterprise very moist, because Americans can consume seven or eight pairs of women's shoes a year, and Europeans can consume five or six pairs."

Zhang Huarong, President of Dongguan Huajian group, recalled that the situation a few years ago still can not stop. "It can be said that the large number of stable overseas orders is the biggest guarantee for the vast majority of enterprises in Dongguan to maintain stable profits."

Located near the Guangzhou Shenzhen Expressway, the company is one of the leading shoe-making enterprises in Dongguan. Among the top 50 internationally renowned footwear brands, 15 of the women's shoes are handed over to the shoe factory under the group's shoes.

However, with the development of several decades, the inherent drawbacks of Dongguan's industrial structure and development pattern are exposed.

In the past, Dongguan has concentrated on intermediate manufacturing in the past for a long time, relying too much on the development mode of the international market. The industrial structure level is not high, the international competitiveness is not strong, and the ability of independent innovation is weak.

The main force of Dongguan's enterprise group is foreign capital processing enterprise. Once its overseas environment changes, it is very likely to "pack up and walk away".

Dongguan's development has long been an extensive growth path relying on material input, external expansion and decentralized development.

Taking land use as an example, the intensity of land development in Dongguan exceeds 40%, exceeding that in Hongkong, and the power consumption per unit GDP ranks among the highest in the province.

The international financial tsunami that broke out two years ago is more like a "fuse", which has blown up the "soft rib" of Dongguan's foreign trade economy.

"How many factories in Dongguan dare to keep the export price of their women's shoes at more than 10 US dollars?" it has been running for several years in a shoe material market in Houjie Town, Dongguan. Mr. Shaw told the Shenzhen Commercial Daily reporter that "international high-end shoe brands come to China to place orders in some large factories. A large number of small and medium-sized factories mainly produce two or three or a pair of rubber or plastic shoes for emerging markets such as Asia, Africa and South America, with low profit margins.

After the outbreak of the financial crisis, orders for shoe products at high and medium prices in foreign countries decreased. Although the number of low orders increased, the price of customers was even more severe.

If these orders are answered, it is possible for the company to lose money and do business, and it will leave the workers free to do anything.

Boosting thousands of enterprises to take the lead in pformation

For Dongguan, which is accustomed to the two digit growth rate, the number of digits is incomprehensible, and negative growth is unthinkable.

In the first quarter of 2009, Dongguan's GDP growth rate was negative 2.5%, and last year's growth was only 5.3%, far below the average annual growth rate of Dongguan's economy in 18% years of reform and opening up to 30 years.

In front of these figures, the Dongguan people quickly completed a brainstorming.

Dongguan currently has 14697 foreign-invested enterprises.

In the first place, Dongguan vigorously promotes pformation and upgrading of processing trade, encourages enterprises to enhance product level, increase technology content, enhance innovation capability, and highlight brand building.

In the process, Dongguan has selected 1000 capital and technology intensive processing enterprises from "unincorporated enterprises" to "legal person enterprises", and has helped these enterprises take the lead in pformation through a series of means.

Founded in 1995, Dongguan Changan Xinmin Xinyi glasses manufacturing factory is a labor-intensive enterprise engaged in processing and producing glasses and processing fees.

In 2008, the demand for overseas market shrinks, and the company intends to open up the domestic market. However, it is limited by the nature of the enterprise and the domestic sales procedures are cumbersome.

With the help of the government, the company was pferred to foreign-funded enterprises in 2009, and an additional investment of US $10 million was set up for R & D centers to expand the domestic market.

Data show that last year, Dongguan has 536 processing enterprises to become "three capital" or private enterprises, and 988 processing trade enterprises have 2678 registered brands at home and abroad.

Dongguan has also introduced various policies to encourage enterprises to pfer overseas R & D institutions to Dongguan, so as to push enterprises to change from the "foundry" production mode that is manufactured only to the "OEM" production mode with intellectual property rights as soon as possible.

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Embrace collective power

"Humen women's clothing", "Houjie furniture", "Changan hardware", "big wool weaving"...

For Dongguan, which has many strong industries with distinctive characteristics, it is a good weapon to pform and develop the domestic market.

In May this year, hundreds of clothing enterprises from Humen in Dongguan and Xintang in Guangzhou were in Humen Town, the national clothing enterprise sales alliance "south goods north" fair signed with Henan Zhengzhou Qu Liang Clothing Industrial Park, together to form the industrial alliance to set up a wholesale center in the north and expand the domestic market.

"At that time, we are not a shop selling clothes, but a business that embodies regional characteristics as a whole.

A single company can be stained with the brand of "Humen women's clothing", which is already well known in the country.

A head of Humen garment enterprise who has already been in the Industrial Park believes that with the strength of collective brand, it can alleviate the difficulties caused by the low brand awareness in the domestic market.

"World factory" has a new connotation.

Compared with most enterprises' perception, Ying Qi, a garment maker, is an early "turn around" Hong Kong funded enterprise in Dongguan's "world factory".

Dongguan Ying Qi Industrial Co., Ltd. is the mainland company of Hongkong Maoming group. It was registered in Dalang town in November 2005, and has more than 2500 employees. The output value reached 1 billion 160 million yuan last year.

Ying Qi has introduced CNC looms since 2007, and has introduced 580 units. It plans to increase the number of numerical control looms to 1000 units within two years.

According to statistics, a numerical control loom is equivalent to the efficiency of 6~8 skilled workers.

After the introduction of CNC loom, the company realized digital production and digital design, and improved labor productivity and product quality.

At the same time, since 2001, Ying Qi company has gradually pferred the labor intensive pre process such as weaving and sewing plates to the inland cities, and has set up 11 factories in Guangxi, Guizhou, Sichuan and Chongqing.

The company mainly focuses on the following processes, such as R & D, quality supervision and marketing management, and builds a production system for labor intensive production outsourcing and company headquarters coordination.

Dongguan is promoting the pformation of enterprises, business pformation and market pformation through various means. The pformation of the "world factory" is expected.