The Depreciation Of The Yen Brings Great Pressure To The Enterprises.

Mr. P, the manager of Shandong Minmetals Clothing Co., Ltd. was not worried at all.

The company has not yet received an order this year, but it still maintained the company's operation last year.

Three months ago, the a href= "//www.sjfzxm.com/news/index_cj.asp" > yen to RMB exchange rate < /a > began to depreciate from 100 yen to 8.04 yuan. At present, 100 yen can only be exchanged for 6.68 yuan, and the depreciation rate is nearly 17%.

This led to the reduction of orders and the price of Mr Cheng's customers, which made him unable to breathe.

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< p > Mr. Zheng is the manager of Shandong Minmetals' a href= "//www.sjfzxm.com/news/index_cj.asp" > dress < /a > Ltd., he said that the depreciation of the Japanese yen has brought a great impact on the entire garment industry. He said that it is now a "difficult time" for the company.

60% of the company's business is Japanese customers. They are looking for factories for processing.

Generally speaking, it takes two months for a set of orders to come down, plus production, processing and export, and finally to settle foreign exchange. Because of the rapid depreciation of the yen exchange rate, Mr. Cheng's company has been greatly affected.

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< p > Mr. Cheng told reporters that the depreciation of the yen has caused direct impact on the company. Some customers may be more sensitive to the exchange rate expectations, and ask for a lock rate when signing the order.

Mr. Zheng gave an example to reporters. The customer locked the exchange rate at 100 yen to 7 yuan, then the order of 1 million yuan would require 14 million 285 thousand and 700 yen for the customer; if the Japanese yen depreciated to the current 100 yen, the exchange rate was 6.68 yuan, while the 1 million yuan would be 14 million 970 thousand yen, but the customer only paid 14 million 285 thousand and 700 yen, then the loss of 684 thousand and 300 yen (about 45 thousand and 700 yuan) would be borne by Mr. Cheng.

"At the end of 1 this year, the company lost an order of about 110 thousand yuan because of such a difference," he said.

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Mr. P now uses the US dollar quote. From now on, it is not only a loss of several fixed customers, but also because customers are more worried because of the continuous "a href=" //www.sjfzxm.com/news/index_cj.asp "loss" < /a >, and the price is even lower, causing the originally low profit space to be squeezed again.

Mr. Cheng said: "this pressure is also passed to the processing plant. We have fewer orders and fewer orders, so the two sides must now warm up."

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< p > ZHENG manager said that when they received orders, they would directly quote customers' quotations to the factory. Then, referring to last year's raw material procurement cost, the labor cost and profit space were calculated, and whether factories could take orders and receive them, then the two sides discussed the price issue together.

"Therefore, our procurement, profits and so on are very pparent to factories, and factories will also yield certain profit margins according to the situation. We now feel that factories and foreign trade companies have become a grasshopper on the rope."

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