As the most developed private capital of China, Wenzhou, under the continuously tightening monetary policy, is now unusually short of money. Recently, Jiangnan Leather, Portman, and Sanqi Group's three private enterprises went bankrupt due to financial problems, and "Wenzhou" was once again pushed to the cusp.
A few days ago, a sample survey of 35 enterprises in Wenzhou by the Institute of International Trade and Economic Cooperation of the Ministry of Commerce showed that a quarter of companies were close to losses, and less than 10 companies had profits exceeding 5%.
In such an economic environment, Yueqing SMEs, which are mainly engaged in low-voltage electrical manufacturing, faced with unclear economic expectations after experiencing the ups and downs of the market, and responded with a positive and confident attitude: “Living first!â€
From this point of view, Yueqing enterprises regard 2011 as a development stage, whether it is downsizing, cheating, or raising a low profile, these tricks are nothing but foreshadowing to “live†in this war.
Meager competition
"From last year to now, plastics have gone up by 18%-25%; copper prices have gone up by 20%-30%, and the price of silver has risen so far. From February to April this year, we cannot see any pattern of price changes at all. A little green bean silver contacts, the original 0.4 yuan, had risen to 1.15 yuan, and a switch but also to sell more than 4 yuan." Yueqing Chen Tai Metal Products Co., Ltd. Chen Jian sensitive director sighed.
In his impression, he never encountered the simultaneous rise in the prices of these three raw materials. What he did not expect was that this year's electricity situation will be so tight, and the cost of autonomous power generation will more than double.
Mintai is a traditional enterprise that produces low-voltage Electrical Accessories, and is mainly made of accessories for miniature circuit breakers C45. Due to the large market demand, Yueqing has more than 60% of electric companies producing this type of C45 product. Because of the low added value and homogeneity of products, the profit is lower than other electric products.
Chen Jianmin said that his purchases are cash to manufacturers, but the recovery of the payment must be made once every four months, and some companies may not be delivered on time. Now that the capital flow is so tight, profits are getting lower and lower. If these funds are borrowed from the private sector, interest will exceed profits.
“Some of the smaller companies are facing greater pressure.†Chen Jianmin said that due to the difficulties in returning funds, or unprofitable, small companies in the industry have stopped or switched to other businesses, and can be said to have been eliminated by the market.
Statistics of Yueqing City Bureau of Statistics show that in the first quarter of this year, the profitability of many companies was declining, and 122 enterprises above designated size suffered losses. It is expected that the loss will increase in the second half of the year.
Zhejiang Ruihe Import & Export Co., Ltd. is a large-scale foreign trade company and there are thousands of foreign companies that cooperate with it. "As far as domestic sales enterprises are concerned, foreign trade export companies are also under pressure from the RMB exchange rate, and the pressure is even greater." Mr. Chen Hongsheng, CEO of Ruihe Company, estimates that since June of last year, the RMB has appreciated by 5.1% cumulatively, and export companies have exchange rate losses of at least 5%. .
"The competition in the market is cruel. For our company, there are many companies that can produce similar products, but for those companies in the city of Liuzhou, improving the production and management efficiency will not be able to absorb the cost pressure. If it is not transformed, The market share will be lost step by step." Chen Hongsheng said that his company later found a company in the Bohai Sea with cheaper prices and better product quality. This means that export-oriented SMEs that are not competitive in the market will be eliminated first.
Weight-loss strategy
Located in the North Baixiang Baitawang Industrial Park, Zhejiang Garcia Electronic & Electrical Co., Ltd. is a labor-intensive and export-oriented enterprise.
“This year, I don’t want to make money. As long as there is sufficient liquidity, companies can develop normally.†For Wu Manhuai, head of Garcia, financing pressure comes first in the many factors that affect companies.
According to Garcia’s normal development plan, this year the company will recruit 600 more people on the basis of 800 workers last year. In order to accommodate the newly recruited workers, the company had spent more than 700,000 yuan at the end of last year, and set up more than 7,000 square meters of production workshops near the company.
"I saw that the reserve requirement ratio was adjusted without limit. I quickly stepped on the 'slam brake' and slowed down the expansion plan. We have only recruited more than 200 people so far." Wu Manhuai said: Last year, I thought that the country will tighten monetary policy this year. , but did not expect to be so tight. He is worried that by June next year, if the financing problem can not be eased, it will affect the overall development of the company.
“As for the research and development of core technologies and high-end series of new products, this year it has originally invested 15 million yuan, and now it is temporarily canceled. For enterprises, they can not vote as much as possible and the production scale can be compressed as much as possible.†With full of enthusiasm, in order to cope with financing pressure, companies have to adopt a "slimming" strategy.
"Only one project was built at the end of last year and it can't be stopped now." This project is a base for production and research and development that Garcia established in Shanghai. At present, half of the project has been built and it is estimated that more than 70 million yuan will be invested. Wu Manhuai said that after the completion of the second half of the year, the park will only have one plant for R&D and design, and the rest will be rented out to ease the financial pressure.
In the past few years, Garcia was in a period of rapid expansion and its output value almost doubled every year. Even during the financial crisis in 2008, it could maintain a growth rate of more than 60%. This year, the annual output value is expected to increase by more than 70%.
Last week, the company’s Ministry of International Trade and the Production Department held meetings to formulate a strict operating system and perform performance appraisal of relevant salesmen to ease the shortage of liquidity and reduce inventory pressure.
“Every order that has not been paid for 20% of the advance payment is cancelled.†This is a rigid requirement for the salesperson to take orders. Su Jianxin, the company’s senior manager, said that the order situation this year is very good, and now there are more than 60 batches each month. To book an order, the company selects some quality customers for cooperation.
"I believe that many companies and my company face the same pressure. As long as we highlight our advantages in customers, management, and products, we will certainly win new development opportunities." Wu Manhuai said that the company declined a few days ago. The South American customers who have cooperated for many years will have 700-800 million U.S. dollars worth of business according to the orders placed by customers this year. However, because the customers are unwilling to pay prepayments, the company still refuses to accept orders to control business risks.
Tangled employees
Wang Aixiang is an ordinary salesman of the Garcia Department of International Trade. In 2005, he was hired to Garcia and always engaged in foreign trade. He has a large Russian customer and his sales potential is very large. Since the company's cooperation with the company in 2009, its business growth has been over 100% annually. Last year's total order contract reached 14 million US dollars. According to Wang Aixiang's conservative estimate, this year's business volume will increase by more than 50%.
According to the normal situation, the business of this Russian customer will bring great bonuses to Wang Aixiang. At the end of last year, he had already calculated that only this customer, his bonus commission this year could be increased by 450,000 yuan.
However, due to the sharp increase in cost pressures in the first quarter, especially as the price of silver rose too fast, the company asked customers to increase their prices. However, this Russian client only wishes to mention 5%, which is too different from the company's 11% increase.
“The actual cost of our products has increased by 16%, and we have only added 11%. The company takes care of the customers. This is for longer-term cooperation.†This is Wang Aixiang’s most talked about customer. Because the two sides could not negotiate, the US$1.5 million that had been issued last month has not yet been issued and the two sides are still deadlocked.
Wang Aixiang was very entangled with this matter. On the one hand, if the customer does not increase the price, the goods cannot be issued, resulting in a backlog of inventory, which is required to deduct part of his performance-based salary; on the other hand, if the customer first delivers, the customer does not want to increase the price, and he himself must bear the risk of collection.
Wang Aixiang’s monthly basic salary is 2,000 yuan, and a large part of it comes from business performance assessment. The company’s just-initiated loan recovery meeting has made it clear that if it fails to handle the collection issue as scheduled, the company’s capital recovery pressure and the risk of customer loss will increase. For himself, this year’s revenue will also be significantly reduced.
Wang Aixiang’s wife and children are all in his hometown in Jiangxi. He needs to send at least 2,000 yuan a month to his family. His son will take the college entrance exam this year. Going to college will be a big expense. If he does not get the expected bonus, his family pressure is not small.
"I hope that raw materials can maintain a stable price, not fluctuate so much." Wang Aixiang said that he is optimistic about this year's economic forecast. As long as the company is well developed and raw material prices are stable, his business volume will also grow steadily.
Live to win
Garcia's products, 30% of the accessories through the distribution of foreign companies. One of them is the Hexing Group of Hongqiao Xixi Industrial Park. It mainly supplies injection molding accessories for low-voltage electrical appliances.
Unlike the pressure on Garcia, the biggest pressure on the Hexing Group comes from power curtailment.
"The injection molding machine consumes a lot of power. If we calculate the cost of power generation, the cost will increase by 5%, and there will be almost no profit." Zheng Jingyu, deputy general manager of Hexing Group, told reporters that the value-added products of accessories suppliers are lower and are affected by raw materials. Bigger.
In the second half of last year, Hexing Group has analyzed the economic situation this year, and it is very optimistic about the low-voltage electrical appliance market this year and next year, and has done some plans for expansion and development. Of course, some unfavorable factors have also been forecasted. In particular, the company’s financial department has made reasonable inventory arrangements in terms of raw material prices.
“Now the raw material prices are already at a high level. In the second half of the year, it should come down. If the diesel supply is guaranteed, even if there is no profit, it will be possible to generate electricity on its own to ensure production.†Zheng Jingyi said that for a private enterprise, the living space is still somewhat flexible. . There are many orders this year, including some unprofitable orders. However, in order to meet the needs of customers and the market, companies will also take orders.
Zheng Jingyu said: “Different companies have different expectations for this year. Our mentality is good and we can't make money. At present, most companies have similar difficulties. As long as we can work hard, we believe that many resources will be reintegrated as long as we Taking the path of specialization, improving the production efficiency and the passing rate of products, the company's long-term development is also good."
Under the pressure of various economic factors, as long as the financing platform for SMEs has not been broken, companies will still have a strong desire for survival.
"If you survive, you will have food." Facing cost pressures, Cai Jianmin, the head of McClub, is very calm. Although the company formulated a series of price increases at the beginning of the year, it was invisiblely rejected by the market. He said that since rising prices cannot relieve pressure, they must first survive and cultivate their internal strength.
"These pressures are a test for enterprises and will, to a certain extent, promote the reform of the company's business model and technology." Cai Jianmin said that this is a reshuffle of the market economy, and for some companies that are prepared, It is not necessarily a bad thing. Sticking to it is the winner.
A few days ago, a sample survey of 35 enterprises in Wenzhou by the Institute of International Trade and Economic Cooperation of the Ministry of Commerce showed that a quarter of companies were close to losses, and less than 10 companies had profits exceeding 5%.
In such an economic environment, Yueqing SMEs, which are mainly engaged in low-voltage electrical manufacturing, faced with unclear economic expectations after experiencing the ups and downs of the market, and responded with a positive and confident attitude: “Living first!â€
From this point of view, Yueqing enterprises regard 2011 as a development stage, whether it is downsizing, cheating, or raising a low profile, these tricks are nothing but foreshadowing to “live†in this war.
Meager competition
"From last year to now, plastics have gone up by 18%-25%; copper prices have gone up by 20%-30%, and the price of silver has risen so far. From February to April this year, we cannot see any pattern of price changes at all. A little green bean silver contacts, the original 0.4 yuan, had risen to 1.15 yuan, and a switch but also to sell more than 4 yuan." Yueqing Chen Tai Metal Products Co., Ltd. Chen Jian sensitive director sighed.
In his impression, he never encountered the simultaneous rise in the prices of these three raw materials. What he did not expect was that this year's electricity situation will be so tight, and the cost of autonomous power generation will more than double.
Mintai is a traditional enterprise that produces low-voltage Electrical Accessories, and is mainly made of accessories for miniature circuit breakers C45. Due to the large market demand, Yueqing has more than 60% of electric companies producing this type of C45 product. Because of the low added value and homogeneity of products, the profit is lower than other electric products.
Chen Jianmin said that his purchases are cash to manufacturers, but the recovery of the payment must be made once every four months, and some companies may not be delivered on time. Now that the capital flow is so tight, profits are getting lower and lower. If these funds are borrowed from the private sector, interest will exceed profits.
“Some of the smaller companies are facing greater pressure.†Chen Jianmin said that due to the difficulties in returning funds, or unprofitable, small companies in the industry have stopped or switched to other businesses, and can be said to have been eliminated by the market.
Statistics of Yueqing City Bureau of Statistics show that in the first quarter of this year, the profitability of many companies was declining, and 122 enterprises above designated size suffered losses. It is expected that the loss will increase in the second half of the year.
Zhejiang Ruihe Import & Export Co., Ltd. is a large-scale foreign trade company and there are thousands of foreign companies that cooperate with it. "As far as domestic sales enterprises are concerned, foreign trade export companies are also under pressure from the RMB exchange rate, and the pressure is even greater." Mr. Chen Hongsheng, CEO of Ruihe Company, estimates that since June of last year, the RMB has appreciated by 5.1% cumulatively, and export companies have exchange rate losses of at least 5%. .
"The competition in the market is cruel. For our company, there are many companies that can produce similar products, but for those companies in the city of Liuzhou, improving the production and management efficiency will not be able to absorb the cost pressure. If it is not transformed, The market share will be lost step by step." Chen Hongsheng said that his company later found a company in the Bohai Sea with cheaper prices and better product quality. This means that export-oriented SMEs that are not competitive in the market will be eliminated first.
Weight-loss strategy
Located in the North Baixiang Baitawang Industrial Park, Zhejiang Garcia Electronic & Electrical Co., Ltd. is a labor-intensive and export-oriented enterprise.
“This year, I don’t want to make money. As long as there is sufficient liquidity, companies can develop normally.†For Wu Manhuai, head of Garcia, financing pressure comes first in the many factors that affect companies.
According to Garcia’s normal development plan, this year the company will recruit 600 more people on the basis of 800 workers last year. In order to accommodate the newly recruited workers, the company had spent more than 700,000 yuan at the end of last year, and set up more than 7,000 square meters of production workshops near the company.
"I saw that the reserve requirement ratio was adjusted without limit. I quickly stepped on the 'slam brake' and slowed down the expansion plan. We have only recruited more than 200 people so far." Wu Manhuai said: Last year, I thought that the country will tighten monetary policy this year. , but did not expect to be so tight. He is worried that by June next year, if the financing problem can not be eased, it will affect the overall development of the company.
“As for the research and development of core technologies and high-end series of new products, this year it has originally invested 15 million yuan, and now it is temporarily canceled. For enterprises, they can not vote as much as possible and the production scale can be compressed as much as possible.†With full of enthusiasm, in order to cope with financing pressure, companies have to adopt a "slimming" strategy.
"Only one project was built at the end of last year and it can't be stopped now." This project is a base for production and research and development that Garcia established in Shanghai. At present, half of the project has been built and it is estimated that more than 70 million yuan will be invested. Wu Manhuai said that after the completion of the second half of the year, the park will only have one plant for R&D and design, and the rest will be rented out to ease the financial pressure.
In the past few years, Garcia was in a period of rapid expansion and its output value almost doubled every year. Even during the financial crisis in 2008, it could maintain a growth rate of more than 60%. This year, the annual output value is expected to increase by more than 70%.
Last week, the company’s Ministry of International Trade and the Production Department held meetings to formulate a strict operating system and perform performance appraisal of relevant salesmen to ease the shortage of liquidity and reduce inventory pressure.
“Every order that has not been paid for 20% of the advance payment is cancelled.†This is a rigid requirement for the salesperson to take orders. Su Jianxin, the company’s senior manager, said that the order situation this year is very good, and now there are more than 60 batches each month. To book an order, the company selects some quality customers for cooperation.
"I believe that many companies and my company face the same pressure. As long as we highlight our advantages in customers, management, and products, we will certainly win new development opportunities." Wu Manhuai said that the company declined a few days ago. The South American customers who have cooperated for many years will have 700-800 million U.S. dollars worth of business according to the orders placed by customers this year. However, because the customers are unwilling to pay prepayments, the company still refuses to accept orders to control business risks.
Tangled employees
Wang Aixiang is an ordinary salesman of the Garcia Department of International Trade. In 2005, he was hired to Garcia and always engaged in foreign trade. He has a large Russian customer and his sales potential is very large. Since the company's cooperation with the company in 2009, its business growth has been over 100% annually. Last year's total order contract reached 14 million US dollars. According to Wang Aixiang's conservative estimate, this year's business volume will increase by more than 50%.
According to the normal situation, the business of this Russian customer will bring great bonuses to Wang Aixiang. At the end of last year, he had already calculated that only this customer, his bonus commission this year could be increased by 450,000 yuan.
However, due to the sharp increase in cost pressures in the first quarter, especially as the price of silver rose too fast, the company asked customers to increase their prices. However, this Russian client only wishes to mention 5%, which is too different from the company's 11% increase.
“The actual cost of our products has increased by 16%, and we have only added 11%. The company takes care of the customers. This is for longer-term cooperation.†This is Wang Aixiang’s most talked about customer. Because the two sides could not negotiate, the US$1.5 million that had been issued last month has not yet been issued and the two sides are still deadlocked.
Wang Aixiang was very entangled with this matter. On the one hand, if the customer does not increase the price, the goods cannot be issued, resulting in a backlog of inventory, which is required to deduct part of his performance-based salary; on the other hand, if the customer first delivers, the customer does not want to increase the price, and he himself must bear the risk of collection.
Wang Aixiang’s monthly basic salary is 2,000 yuan, and a large part of it comes from business performance assessment. The company’s just-initiated loan recovery meeting has made it clear that if it fails to handle the collection issue as scheduled, the company’s capital recovery pressure and the risk of customer loss will increase. For himself, this year’s revenue will also be significantly reduced.
Wang Aixiang’s wife and children are all in his hometown in Jiangxi. He needs to send at least 2,000 yuan a month to his family. His son will take the college entrance exam this year. Going to college will be a big expense. If he does not get the expected bonus, his family pressure is not small.
"I hope that raw materials can maintain a stable price, not fluctuate so much." Wang Aixiang said that he is optimistic about this year's economic forecast. As long as the company is well developed and raw material prices are stable, his business volume will also grow steadily.
Live to win
Garcia's products, 30% of the accessories through the distribution of foreign companies. One of them is the Hexing Group of Hongqiao Xixi Industrial Park. It mainly supplies injection molding accessories for low-voltage electrical appliances.
Unlike the pressure on Garcia, the biggest pressure on the Hexing Group comes from power curtailment.
"The injection molding machine consumes a lot of power. If we calculate the cost of power generation, the cost will increase by 5%, and there will be almost no profit." Zheng Jingyu, deputy general manager of Hexing Group, told reporters that the value-added products of accessories suppliers are lower and are affected by raw materials. Bigger.
In the second half of last year, Hexing Group has analyzed the economic situation this year, and it is very optimistic about the low-voltage electrical appliance market this year and next year, and has done some plans for expansion and development. Of course, some unfavorable factors have also been forecasted. In particular, the company’s financial department has made reasonable inventory arrangements in terms of raw material prices.
“Now the raw material prices are already at a high level. In the second half of the year, it should come down. If the diesel supply is guaranteed, even if there is no profit, it will be possible to generate electricity on its own to ensure production.†Zheng Jingyi said that for a private enterprise, the living space is still somewhat flexible. . There are many orders this year, including some unprofitable orders. However, in order to meet the needs of customers and the market, companies will also take orders.
Zheng Jingyu said: “Different companies have different expectations for this year. Our mentality is good and we can't make money. At present, most companies have similar difficulties. As long as we can work hard, we believe that many resources will be reintegrated as long as we Taking the path of specialization, improving the production efficiency and the passing rate of products, the company's long-term development is also good."
Under the pressure of various economic factors, as long as the financing platform for SMEs has not been broken, companies will still have a strong desire for survival.
"If you survive, you will have food." Facing cost pressures, Cai Jianmin, the head of McClub, is very calm. Although the company formulated a series of price increases at the beginning of the year, it was invisiblely rejected by the market. He said that since rising prices cannot relieve pressure, they must first survive and cultivate their internal strength.
"These pressures are a test for enterprises and will, to a certain extent, promote the reform of the company's business model and technology." Cai Jianmin said that this is a reshuffle of the market economy, and for some companies that are prepared, It is not necessarily a bad thing. Sticking to it is the winner.
Haiyu Automotive Lamp Co., Ltd. , http://www.nbautomotivelamp.com