Changing times for China’s tanners4 October 2010
Having lived in China for 14 years, there's one word that can best be used to summarise this experience and that's.... change. There's been a change from being a welcomed exporter to now, a welcomed importer. Entrepreneurs have been given tax and duty free rewards for their exporting. Now we see there is an almost equal emphasis on how much they can import.
Change has at the same time turned to the hot topic of ‘green and eco’ covering energy conservation, water consumption, waste disposal along with water and air treatment projects in part actually helped by the Beijing Olympics. Today you'll go nowhere without the proper permits for being green. In China the standard has jumped from zero care to striving to become the world's highest standard.
Another changing role is that of the employee and the employer. Workers used to queue up at the factory gates seeking their chance for a job opportunity. Now the employer has to recruit their employees from inland China to fill their vacancies. In other words the workers now have choices for better wages and working conditions as the employers are effectively begging for workers! This shortage is especially serious on China's east coast.
The good news out of all this is that at least these newly empowered workers with their higher wages are returning their wages back to the economy. At one level we see people who have moved themselves from bicycles to cars such as Buick and even BMWs. Riding bicycles has actually become ‘casual sport’ as in many other countries. It's no longer to just feed oneself and the family.
How are these changes affecting our leather business in China?
In China there are even more people than you would think that are waiting for consumer ‘goods’. The potential end users in China are getting richer quicker and are very eager to spend their new riches. For most of our businesses the Chinese domestic market is still a virgin land. Whether for a hide dealer, chemical, machinery, tanner or shoemaker you will find a place here. With a favourable exchange rate and importation policy,
all are welcomed.
The question is how do we manage our dealers and supply chain...how can we figure the custom and taxation system appropriately while working out the payment terms with Chinese local businesses? People often find out how
to run a successful Chinese domestic market by knowing how to give the right credit and incentives to the right people. To be sure it's a new age here in China. There are lots of chances here!
While operating as a tanner in China we are losing the benefit of having cheap labour and other resources. By improving with more efficiency the ‘eco’ side of the business is certainly one answer to securing our position here. The Chinese government is determined to close down those tanneries that are not up to the newest and highest environmental standards. Most areas now have quotas that have been set for production.
The ones who manage environmental issues better are more likely to succeed. In China and elsewhere we see all too frequently tanneries being shut down because of environmental problems that have occurred. Keeping up and even ahead of the international standard is the key.
On another level, both here and in the USA, successful companies are market driven...great companies are market driving. The ability to lead the customer into the future by creating leading edge products manufactured with cutting edge technologies is our goal and being quite frank, to reposition ourselves ahead of the competition.
At Tyche we don't want to just compete we want to set the industry standard. We strive to do this with a clear and concise message while providing clear attainable goals that stretch us but we provide the means to deliver them.
At Tyche we try to coordinate a greater communication between our production quality and sales. It is not considered an after thought.
We aim to offer our customers specifications on quality and environmental performance that meet their expectations. This is supported by a team of sales staff, product experts and problem solvers that are so essential in this world of leather making.
Tyche Leather Group