Best foot forward

Last year was tough for many manufacturing enterprises in the country as profits were squeezed by rising material and labor costs, the renminbi's appreciation and anti-dumping charges.

However, there might be some good news for shoemakers in Jinjiang, which is known as an international "footwear hub". There, these negative trends have forced companies to reshuffle and update technologies.

As home to over 3,000 companies that do business in the footwear industry, as well as over 1,000 supporting enterprises, the city in East China's Fujian province produces 1 billion pairs of shoes each year.

In 2007, the average price of shoes exported from the southeast Fujian city increased by 20 percent from a year ago despite a slight decline in export volume. That means the industry in Jinjiang is shifting from volume expansion to a focus on quality.

Shoemaking enterprises in Jinjiang have started a campaign to list on stock exchanges, which will turn asset management into capital management.

"Three shoe manufacturers in the town have started their listing procedures with an attempt to get listed in 2008. It is expected that six or seven companies will get listed by 2010," says Wang Maoquan, head of Chendsaysai town - the cradle of the shoemaking industry in Jinjiang.

In November 2005, Hongxingerke Group was listed on the Singapore Main Board at a price 7 times more than the Price/Earnings Ratio, raising about 200 million yuan. Last July, Anta (China) Co Ltd was listed in Hong Kong, raising HK$3.16 billion.

A special fund has been established in Jinjiang to help enterprises get transformed and listed as fiscal subsidies, and other comprehensive supports and assistances in such aspects as qualifications for getting listed, procedures for getting listed, risk evaluation and economic investigations.

Yang Yimin, an official with the local government, says that guiding enterprises to do a good job in their transformation and listing could not only help companies raise money and grow while encouraging them to increase their inputs in science and technology, but also help them get rid of the family enterprise management pattern and introduce modern management patterns and high-end talent.

The footwear industry in Jinjiang has been attaching more attention to technology improvements and encouraging innovation in terms of new technologies, new materials and new craftworks.

The development of the footwear industry has already entered a new phase in terms of technology upgrades, says Ding Zhizhong, president of the Jinjiang Shoemaking Industry Association.

"If footwear enterprises in Jinjiang want to get stronger, what is most important for them is to introduce new technologies, improve the technical contents of their products and advance along the road of quality-benefit development, which is supported by technology," says Ding, who is also head of Anta, a Jinjiang-based sportswear company.

In 2005, Anta invested 20 million yuan to establish the Sport Science Lab, a sporting goods research and development institute. In the lab, the movement patterns of athletes' feet can be recorded and simulated. Athletic footwear suitable for the foot dynamics of respective athletes can then be developed.

The city is hoping to develop into a national sportswear base by extending its industrial chain from athletic footwear and garments to equipment.

In 2007, the Sport Equipment Research and Development Base of the China Institute of Sport Science (CISS) was unveiled in Fujian Sidelong Sporting Goods Co Ltd, located in Jinjiang. That is the second cooperation between Jinjiang and China's General Administration of Sport since the Chinese Badminton Team set up its training base there in 2003. This program is to collect data on peoples' foot shapes nationwide.

Experts on sports mechanics will then set up the first foot shape database in China after processing and analyzing data. Enterprises will manufacture athletic shoes suitable for different foot shapes and the data will become the first "Chinese standard" for sports shoes.

Local governments and industrial associations have also given full support to the industry's development.

The Fujian provincial government, China Council of the Promotion of International Trade, China National Light Industry Council and China Leather Industry Association has held the Jinjiang Footwear International Exposition for the past nine years, in a move to bridge local shoemakers, material suppliers and buyers at home and abroad. The 10th session will open from April 19-22.

With a planned exhibition area of 40,000 sq m and 1,600 international standard exhibition booths, this session is expected to attract companies from major footwear production regions in and out of China from 16 countries and regions as well as professional purchasers.

Highlights at the event include technology innovation, well-known brands and small- and medium-sized enterprises. It will also have the first European Footwear Fashion Trend Lounge and World Footwear Fashion Designer Forum.

(China Daily 03/24/2008 page10)