Concern over the European Commission’s anti-dumping duties have prompted the world’s largest shoe manufacturer, Yue Yuen, to expand its production in Indonesia, and 12-15 other Chinese manufacturers are said to be taken the same route. Shoes that are affected by the duties account for 6 percent of total sales for Yue Yuen, which has customers like Nike, Timberland, ASICS, New Balance and Puma. However, the measures taken in Brussels haven’t scared Yue Yuen away from expanding production in China and Vietnam, due to its continuing growth (see next story).
Two other large Chinese footwear manufacturers, Feng Tay and Pou Chen, are both looking at India as the next frontier in shoe manufacturing. Pou Chen, which owns a stake in Yue Yuen, is reportedly looking at production options also in Bangladesh and South Africa to complement existing facilities in Vietnam, Indonesia and mainland China. Separately, Feng Tay plans to open 18-20 licensed Born and Bolo outlets for casual footwear in Taiwan, while raising to 100 the number of sporting goods stores it operates in China.
Another Chinese firm, Kingmaker, is building a $30 million factory in Cambodia in reaction to the European duties. The new facility is scheduled for production in December, with an annual capacity of 450,000-500,000 pairs of adults’ shoes. At the same time, Kingmaker’s production facility in Vietnam will shift towards babies’ and children’s footwear.
The loss of a contract with Timberland, which was related to the new European anti-dumping duties, caused Kingmaker to post a 32 percent drop in net profit to $60.1 million for the financial year ended last March 31.