7 Leather Enterprises Are Seeking To Seize The Right To Speak In International Procurement

Recently, Xiamen Asia Gulf Hotel, a leather enterprise fraternity held by Jinjiang Xingye leather products Co., Ltd. was quietly held. This "friendship" is hidden behind the ambition of Chinese leather enterprises to seize the right to purchase international raw leather.

At this gathering, 7 large leather enterprises in China reached a series of consensus on the purchase price of international raw leather and the unreasonable trading rules of us suppliers.

The establishment of the consortium to participate in the leather enterprise sorority, including Jinjiang Xingye leather, Hualian tanning, Zhejiang Haining Volkswagen leather and Wenzhou Sheng hung group and so on, are 7 relatively strong leather enterprises in China, because they are small-scale internal meetings, so this association is not known to outsiders, and even a lot of people in the industry know little about this, which adds a lot of mystery to them.

In fact, the fraternity system consisting of 7 leather enterprises has been running for over a year.

According to Xu Gonghe, general manager of Jinjiang Hualian tannery Co., Ltd., at the Shanghai leather exhibition last year, Lin Shengxiong, chairman of Wenzhou Sheng Hsun group, suggested that several enterprises establish a fellowship to explore the current development trend of leather industry at home and abroad, especially in the aspect of international procurement of raw materials, so as to prevent vicious competition and increase the right to speak.

"After Lin Shengxiong put forward this proposal, we think it is very necessary that we start to take the form of 7 enterprises taking turns in the East and hold a fellowship every two months. The heads of the big enterprises sit together to explore the direction of the development of the industry and put forward corresponding countermeasures."

After more than a year of operation, the system has been improving. Especially in the international procurement of raw leather, a prototype similar to the international procurement negotiation coalition has emerged.

According to a member of the Quanzhou Leather Association who went to Xiamen to take part in the fraternity, at the meeting, 7 enterprises first made a top price line after analyzing the international raw leather supply market situation. "Beyond this price, we will not consider purchasing."

It is learnt that at present, the importation of domestic raw leather is mainly dependent on the United States. After that, because the various enterprises have not been able to form a resultant force in the procurement of raw leather, the right to speak for the purchase price of raw leather has always been in the hands of us suppliers, and the phenomenon of suppliers' wanton price increases has occurred frequently, and domestic leather enterprises have also suffered a lot.

"After the 7 enterprises are united, the total procurement volume is quite amazing."

The above Leather Association told reporters that after the alliance of 7 enterprises, "although the pace of procurement time is hard to be completely consistent, such a consortium will stick to the same price ceiling, which will certainly enhance their bargaining power in international procurement."

To change the bargaining power of the US trading rules in enhancing the price of international raw leather procurement, changing the unreasonable trading rules of us suppliers will be a long-term goal for the Fraternity Association.

The trading rules between us suppliers and domestic downstream manufacturers have lasted for 70 years, and Xu believes that this rule can not only adapt to the development of the market, but also has many unreasonable aspects for downstream manufacturers in China.

Xu Gonghe told reporters that in the current trading rules, the error in the number of pactions is allowed to be within plus or minus 1%. "For thousands of raw leather purchases, the 1% error is a very difficult number to accept."

At the same time, if there are quality problems, Chinese downstream manufacturers will lose their claim if they do not raise objections within a week after the arrival of the goods.

"And the reality is that a week's time is too late for goods to go out, and claims are even more impossible."

These unreasonable trading rules are the focus of discussion in all previous fellowships. "Every fraternity will choose one aspect of the trading rules as the focus of discussion."

At present, many ideas of fellowship have been supported by China Leather Association and will be discussed with us suppliers.