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Single-client plan helps Apache Shoes in tough times
01
Sep '08
It has been noted that shoe export of China has weakened significantly since the beginning of 2008. The situation is especially worse for Guangdong Province footwear industry, whose exports account for 40 percent of country's total shipments.

Statistics from Guangzhou Customs show that the number of Guangdong footwear enterprises, which registered export performance, declined from 5,811 in the first half of 2007 to just 3924 in the corresponding period this year.

Of these, footwear export companies in the Pearl River Delta (PRD) Economic Zone, one of the largest consumer goods export base of China, fell from 5,043 to 2617, recording a decline of over 48.1 percent.

Guangdong Province exported 1.63 billion pairs of shoes in the first half of this year, down 15.8 percent from same period last year.

However, Apache Footwear Ltd in Guangdong is doing well because of Adidas, who has not cut down its orders to this manufacturer.

Thus, Apache has still kept its monthly production within the range of 1.1 to 1.2 million pairs of shoes.

Although the profit is shrunk due to international and internal trade factors, Company has been able to survive comfortably.

In 1996, with rapid expansion, Apache Footwear Ltd implemented a bold strategy to exclusively process for Adidas and give up other customers. This way, Company was able to serve Adidas with perfection.

For next 10 years, with Adidas's rapid expansion of global business, production capacity of Apache also achieved constant and steady growth.

Due to increased international trade frictions and rapid increases in production costs, the Chinese supplier set up a factory in India.

By the end of 2006, in less than two years, the production capacity of Indian factory rapidly expanded from 20,000 pairs a month to 100,000 pairs a month, and currently the produces 300,000-400,000 pairs per month.

In the past 2-3 years, Adidas's orders to Guangdong factory of remained stable, while its orders to Indian factory have registered a rapid growth.

Experts believe that deciding to concentrate on a single consumer has helped Apache to earn considerable profits in these tough times.

Fibre2fashion News Desk - China

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