Once the home of the world's leading footwear exporter, then cobbler to the Soviet bloc, the Czech shoe sector is now a shadow of its former self and overshadowed by Asian imports.
On the eve of a March 9 meeting of EU ministers to discuss how to protect European producers against cheap Asian imports, Czech companies from children's shoe producer, DPK, to riding and leisure shoe maker, Moleda, and mid-range manufacturer, Bata, are agreed: the proposed steps are unlikely to save them from having one foot in the grave.
"I see the future as very dark," commented Petr Kubat, the 45-year-old head of the Czech Shoe and Leather Working Association and joint owner of DPK.
"A few years ago I employed 100 people, now it is 20," Kubat said of the 12-year-old family business based in the south-eastern city of Zlin, home to most of the sector's survivors. The Czech industry now employs around 4,500 people, compared with 35,326 in 1990.
"I cannot really say what the future will hold," Kubat said, adding that it is probably "a question of time" before Asian producers target his niche market as well.
Kubat does not look for salvation from the anti-dumping duties that Brussels could impose on cheap imports from China and Vietnam. "A duty of 10-20 percent will not make any difference," he said.
The Czech industry cannot compete against Asian wages of 30 US dollars a month or production by children or prisoners in China, he said. Czech authorities should nonetheless end their indifference to Asian imports at such unrealistic prices as 1.70 dollars a pair, he said.
In 2005, around 73 million pairs of shoes were exported to the Czech Republic, around 80 percent of them from China. This compares with 50.3 million pairs in 2004. Czech companies produced 5.5 million pairs last year, a record low.
Kubat says there are around 25 surviving Czech shoe producers. One of the biggest, Bata Czech Republic, manufactures around 350,000 pairs of mid-range shoes a year with 300 workers near Zlin. Around half its shoes are sold in the Czech Republic, the remainder across Europe.
Managing director, Michal Jansky, says the plant only keeps going because of its tie-in with the group's 42 retail stores and ability to meet specific Czech tastes for a "wider, more solid, casual and matt-looking shoes."
"Even with the shops and our ability to design for this market, I would not bet on the future. We are probably okay for the next four or five years, but after that there is no guarantee," he said.
Around half of the shoes sold at Bata's Czech stores, which account for around 20 percent of all Czech shoe sales, are manufactured in India and east Asia, including China.
Jansky is able to take a global perspective. "It is no longer true to talk about Chinese production as low quality. A lot of Italian companies are moving their production there," he said.
EU duties will do nothing to boost European production, he warned. Manufacturers will get round duties by shipping shoes through third countries and pretending they are produced there. European companies will still relocate production in east Asia, he added. Moleda is another of the bigger survivors. Its 80 employees produced 280,000 pairs in 2005, half of them PVC riding boots and the remainder "Prestige" leisure shoes.
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