Ecco, a Danish shoe manufacturing company, has established its first factory in China where the cost of production is far lower than that in Denmark, following several others, to survive competition.
But, only if the production cost is less, has been the motto for Eccco and the likes.
The company now fears anti?umping duties will affect their profitability in big way as EU may impose extra duties on cheap shoes imported from China and Vietnam.
Duties may be go up as high as 60 percent from a low 20 percent level at present.
Ecco is one of Europe? most successful companies that sells about 12 million pairs of shoes, which are exported to America, Europe as well as China.
Shoe imports to Europe surged 700 percent during the first three months of 2005, as textile trade barriers were eliminated, begining this year.
Italian shoe exports recorded 15 percent slump in volume terms during the first quarter; twice that posted in 2004.
Italian footwear association ANCI said 900,000 jobs in Europe are at stake; a third of which belong to Italy.
Other shoemakers, especially based in low-wage Southern Europe, called for European Commission to take serious measures to protect their business.
However, Mikeal Thinghuus, Chief Operating Officer (COO) & Deputy Managing Director Ecco, believes that duties may push up shoe prices rendering them costlier with little choice for customer.
Shoes as a product are designed, crafted and marketed in Denmark. However, labor-intensive jobs like stitching are costly in northern Europe since the past two decades, he viewed.
He also insists that Asian factories meet the same standards as the EU plants. He recently visited Brussels to justify why anti?umping duties will not do any good to EU.
He seeks to explain that his company still makes 45 percent of shoes in European countries like Portugal and Slovakia and provides 500 jobs in Denmark itself. And now, it employs around 750 workers in China.
Thinghuus claims that the production will not move back to Europe, and rather move from China and Vietnam to other low-cost countries like Indonesia, India, Thailand and Laos.
Horst Widmann, President, The Federation of the European Sporting Goods Industry (FESI), also concurs and adds that Europe will not gain any jobs, instead, thousands will be lost.
