Zhejiang Aokang, the largest shoe manufacturer in Zhejiang, says no to “foreign capital mergers and acquisitions”

Rejecting foreign mergers and acquisitions is not blind confrontation. “The most rational way is to cooperate with foreign capital to a certain degree and leverage on big brands,” Wang said. “The cooperation between Aokang and GEOX in Italy is a successful case.”

As the "Supor case" and the resulting "influence of foreign capital mergers and acquisitions on industrial safety" gradually warmed up, the most competitive industries in Zhejiang began to become the focus of attention in the industry. In response, Wang Zhenxi, president of Aokang Group, Zhejiang's largest and the country's second-largest footwear manufacturer, said yesterday that O'Connell “has not yet been thought of by foreign mergers and acquisitions.” But he also said that refusing to buy and sell does not mean "confrontation."

Wang Zhenwei made the above statement during an exclusive interview with the Morning Post reporter during the 25th International Shoe Industry Conference held in Shanghai yesterday. This is the first time that the leading enterprises in the most competitive industries in Zhejiang have made similar public responses.

The view that "Foreign capital mergers and acquisitions affect Zhejiang's industrial security" first appeared in a report earlier this year by the Provincial Development and Reform Commission, and then it became more and more as the "SEB M&A Supor in France" was widely questioned. The Zhejiang Provincial Development and Reform Commission believes that the new trend of foreign investment that needs attention now is that “Foreign-strong companies intend to “kill” the enterprises with international competitiveness in the province at the beginning of becoming stronger, thus affecting Zhejiang’s industrial safety”.

In fact, as one of the most competitive manufacturing industries in Zhejiang, footwear has leapt to foreign investment. Wang Zhenlu revealed that only in the near future, several multinational investment groups have contacted Aokang and "we hope to have a joint venture or even mergers and acquisitions."

"But I refused them." Wang said there are two main reasons: First, from the industry, "O'Connell is not short of money. Shoes are still my interest and the realization of personal values." In terms of brands, "At present, China Shoes Association proposes that it takes 5 to 10 years to develop 3 to 5 international brands. Aokang hopes to become one of them, so it will not give up the brand."

However, he also said that the rejection of foreign mergers and acquisitions is not blindly confrontation. "The most rational way is to cooperate with foreign capital to a certain degree and leverage on big brands," Wang said. "The cooperation between Aokang and GEOX in Italy is a successful case." GEOX is the first in Italy and the fourth in the world. Shoe companies are known worldwide for producing "breathable shoes."

According to reports, in February 2003, Aokang and GEOX signed a cooperation agreement: The latter used Aokang's strong sales network to sell its products in China, and settled its Asian production base in Aokang. Ocon also used GEOX to sell in 68 countries in the world. The network has entered the international market while participating in the latter's product design and development in the Asian market. This is not only different from OEM (OEM processing) but also different from Sino-foreign joint venture "two-way channel" model, which is called "the third mode of Sino-foreign cooperation" by the industry.

“It is this unique cooperation model that has benefited Aokang.” Wang Zhenluo said that first is the management, technology and latest information of international brands; secondly, “With the EU’s continuous escalation of large anti-dumping duties on Chinese shoes, if There is no two-way route, O’Cahn’s road to internationalization is bound to be a thorny road. “As of now, O'Connell’s sales in the “world shoe capital” Italy has reached more than 200 million yuan.

The Zhejiang businessman, who is the vice chairman of the China Leather Association, believes that in the process of enterprise development, the power of a single enterprise is extremely limited. Especially in the context of internationalization, “learning to integrate resources to the maximum extent is to include Zhejiang. China's manufacturing industry should take the road.” “Some people questioned whether O'Connell’s cooperation with GEOX was to lead wolves into the room — but I think that cooperation with foreign capital is inherently risky, and giving up it and letting it develop at home is even more risky,” Wang said. They said, “It would be better to wait for others to shake the cake than to share the cake together and win a win game.” This is not groundless, just a few weeks ago, Aokang suffered a collective martyrdom of many domestic shoe companies and considered the former to be Foreign cooperation is "hopefully defeating domestic enterprises."

According to reports, at the 25th International Shoe Industry Conference held yesterday, Wang also elaborated on these points when addressing keynote speeches made by representatives of industry associations, shoe retailers and shoe manufacturers from various countries. The International Shoe Industry Conference, which has a history of more than 30 years, was first held in mainland China.

Although Own has no intention of being merged with foreign capital, O'Connell does not rule out the occurrence of foreign mergers and acquisitions in the domestic footwear industry. For this new round of competition, Wang Zhenluo said, "As long as companies strengthen themselves, no matter how others merge, they will not be threatened."