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Financial crisis bears down on goose, feather producers

(Xinhua)
Updated: 2008-12-02 23:48

"We've survived major disasters like the bird flu, but now the whole market is in trouble," said a goose breeder in southeast China, where the shockwaves of international financial turmoil are reaching even remote spots like Wuwei County in Anhui province.

Deng Licui runs a major breeding center in the area. The center produces more than 100,000 geese for food and 3 million goslings every year.

"I started the business more than 10 years ago and this feels like the worst year ever. Losses were getting out of control," said Deng.

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In Wuwei, which supplies 70 percent of the nation's down and feathers, a financial storm "on the wing" has shaken the local industry, which makes more than 1 billion yuan ($144.9 million) from raising birds and processing feathers every year.

In the past three months, the prices of feathers, goslings and geese slumped by one third in Wuwei. Buyers now pay only 120 yuan per kg of down, which used to cost them twice as much.

Even the most precious white goose feathers -- the 14 longest ones that run along a bird's wings and can be made into shuttlecocks and fans -- are down 18 percent in price. Many farmers are giving up on geese.

The factory of Wanlida Co., a feather and down products manufacturer, became a temporary market for down coats from a bankrupt Shanghai garment maker. When the Shanghai company failed, it left Wanlida with lots of bills -- and coats, which were sold to pay them.

Misfortunes never come alone, it seems. Wanlida's major client, US-based Pacific Coast Feather Co., abruptly canceled a 120 million yuan order placed only in August. Wanlida was forced to close its factory in Xiaoshan of Zhejiang Province and cut production.

Sales have fallen from 20 million yuan per month last year to less than 5 million yuan, and Wanlida has 100 million yuan worth of finished goods in inventory with no buyer.

Now, Wanlida is trying to borrow from banks, find new markets, reduce  production and buy cheaper down as means to weather the crisis.

Li Fangyi, the board chairman of Wanlida, thinks the storm might last three years. "If we can survive, we will become stronger in the industry."

Although the financial crisis has affected farmers and manufacturers alike, some companies are actually doing better.

Anhui Lanxiang Sporting Goods, for example, got 55,000 new orders from Germany, the United States, the Republic of Korea (ROK), Japan and Singapore in November alone.

The company expects revenue to rise 40 percent this year and it plans to open a new factory next year that will triple its production capacity.

The secret of its success is a competitive edge in shuttlecock-making technology. Lanxiang has several patented technologies that allow them to make tough and flexible shuttlecocks.

It is making shuttlecocks for leading brands like Victor and D &A and entering the ROK market with its own brand, "LanXiang".

"The financial crisis will end eventually," said Jin Xinchang, head of the company. "We are confident we can make good use of our excellent workers and lower material costs to develop our business."