Our second day in Shanghai started already at 7.15AM as we had planned a tight schedule for the day. The focus on today’s program was laid on leather.
A 2.5-hour bus ride took us to Hangzhou. There we met Mr. Bi and Mr. Frank Chan who accompanied us throughout the day, which consisted of three visits of Chinese SME’s. The three companies are all part of a leather cluster within each company covers multiple steps along the value chain.
Lili Leather Goods
The first company we visited, Lili Leather Goods, is specialized in the production of leather garments, mainly jackets. After a short introduction by Mr. Wang of the company, which was founded in 1984, we were invited to take a look at the sample products in the showroom. Lili Leather Goods produces leather garments for about 20 different brands among which are household names such as H&M, s’Oliver, Esprit, Charles Vögele or Chevignon. About half of the products are exported either to Europe or the United States. The other half is distributed on the domestic market.
After that we took a tour the production facilities where we were impressed by the good working conditions of the employees. Almost all the steps within the leather jacket production are still done by hand. An average leather jacket requires four hours of labor, meaning an average employee produces two jackets per day.
The morning program ended with a delicious chinese lunch at a hotel closeby.
NICELINK Home Furnishings
The second visit of the day led us to a company called NICELINK Home Furnishings. The company was founded in 1997 and produces a wide range of leather sofas and chairs. Their products are almost exported almost entirely to the United States, Europe or the Middle East. Ms. Jenny Cao, Mr. Raank Cao and the production leader Roger led us through the different production sites. Every task within the production process is attributed to specific workshops which again are closely interlinked. The processes range from the cutting of the leather, assembly of the wooden frame to the preparation of the foam cushion, etc. This simple setup allows the roughly 1’300 employees to produce the equivalent of 450 shipping containers full of furniture per month and it serves as a good example of a well-integrated value chain.
Zhejiang Fubang Leather Co Ltd.
To close the business visits of the day we were brought to a tannery to see where the leather for the aforementioned companies and products come from. Zhejiang Fubang Leather Co Ltd. is the tannery of the leather cluster above. We were shown around the facilities and had a look at the tanning wheels and also got to know the distinctive smell of a tannery. Mr. Chan also led us to their research center, where a set of small tannery wheels are installed for testing and research purposes.
The three visits of the day gave us impressing insights into the different stages and processes involved in the production of leather garments. From an economic point of view it showed us an example of a successful process integration along the value chain. For most of us it was also the first time to ever see and especially smell a tannery, which might have affected the buying behavior of some when it comes to leather garments.
The bus finally brought us back to Shanghai where we had some time to explore this great city on our own.
Written by C. Chevalier, P. Kull, G. Walser, F. Röllin