Manufacture of footwear in Ukraine, compared with 90-years declined slightly, while imports rose. In this huge volume of imports to Ukraine are imported by the “gray” schemes. Despite this, the shoemakers are convinced that the domestic footwear is far superior in quality Chinese, and so could easily make it to the competition.

About the one who actually makes shoes for world famous brands, as well as how much to invest in starting a shoe manufacturing, in an exclusive interview with the chairman of the League of shoe manufacturers, leather goods, furs and leather goods (“Ukrkozhobuvprom”) Alexander Borodynya .

– Tell me, what now remains of the industrial production of footwear in Ukraine?

– I believe that the Ukrainian footwear industry is not in bad condition. Over the last 15-20 years, Ukraine has been created a few dozen good shoe companies that have between a few dozen to several hundred jobs. Work and several hundred smaller companies. In all, according to statistics, shoe-making deals with some 1,500 business entities.

Most shoe companies created “a new place,” some – on the basis of the enterprises working in the Soviet era. All these companies have very high technical level and skilled management. Otherwise, in conditions of severe competition, they would not have survived. In recent years, this fate befell many. Remains the best.

– What is currently produced footwear in the country?

– Of course production of footwear in Ukraine in the early 90s, compared with those volumes, which are made now, have been much greater. If then we let the order of 180-190 million pairs of shoes, but now, in my estimation, about 3 times less – 50-60 million pairs.

Official statistics show about 20 million pairs. But such is the peculiarity of our statistics, it does not account for all production volumes. Incidentally, this is – the usual European practice. In Italy, for example, official statistics also do not take into account the entire production of footwear and shoemaking association has statistics.

– Why has decreased the volume of production?

– The main reason for the decline in output in the first stage in the 90s was the decrease in consumption of shoes – seriously people become poor. The second reason – the growth in imports. At the end of the 90 volumes of their greatly increased and exceeded 100 million pairs a year.

– Why increased imports? Were lowered import rates?

– Just do not. Import tariff rates in the 90s were quite high – 20% of customs value plus VAT. The problem was that the shoes were imported at a low customs value. For example, in 2002 in Ukraine have been imported over 100 million pairs of shoes at an average cost of 20 cents per pair. At the then exchange rate of hryvnia to the dollar – is 1 UAH. a pair of shoes.

Understatement of customs value for imports and now remains the main obstacle for the development of Ukrainian-made shoes. The situation changed somewhat in recent years, but it is similar to what it was before.

– How many were imported shoes in 2010?

– During the first 9 months of 2010, imports of footwear in Ukraine amounted to about 98 million pairs. This is more than one and a half times more than in all of 2009, when it was delivered about 70 million pairs of shoes. In 2010 the evidence yet. But we can speak of at least 120-130 million pairs of imports. It is our great concern.

– This low imports of footwear in 2009 was associated with crises?

– In 2009, imports of footwear as compared to previous years, declined slightly, but I would not call it low. Reasons for the decline in imports was two. Of course, in Ukraine reduced income, loss of purchasing power on the footwear market was 20-30%. In addition, this contributed to the devaluation of the hryvnia to 60%.

But I emphasize that the crisis well worked out our shoe company, despite the fact that the cost of production of footwear increased significantly. The reasons are linking local producers to import equipment, materials, and wage growth.

As imports, which accounts for two thirds of the Ukrainian market, fell by 20-30%, the Ukrainian shoemakers in the crisis have kept production. This suggests that the shoe industry, which is focused on our, the Ukrainian market, the most resistant to the crisis in the global economy.

– What proportion of the structure of the Ukrainian market is the domestic production of shoes?

– Production of Ukrainian shoe is about 30% of the market.

That the market volume – 180-190 million pairs of shoes, which was in the 90s, now preserved. Ukrainians, especially our women, can save on food, but will buy nice clothes and shoes. And this is a good prospect for our industry and the country as a whole. 190 million pairs of shoes – it is not less than 150 thousand skilled jobs.

The market volume of shoes at wholesale prices of today, according to conservative estimates, at least $ 2 billion in retail it – more than $ 4 billion

– Current import duties for shoes still fell compared with those who were in the 90s?

– Import duty now stands at about 10% (incidentally, this fee does not cause complaints from the WTO), was previously – 20%. Of course, the shoemaker more comfortable to work when the high import duties, as may be more relaxed to compete in the market. But we do not go on this way, competition stimulates the development, but it must be good. We do not consider imports as such a negative phenomenon. None of the shoemakers are not raising the issue of closing the market.

To import duty has been deployed, you must correctly declare the customs value. Because it is the basis for calculating fees. Thus, by lowering the customs value of shoes can be avoiding the payment of import duties and, more importantly, 20% VAT. In this case, our businesses pay taxes and can not compete with imports. In developed countries it is called “unfair competition” and severely punishable by law. We do not have.

For example, in 2002 imported 100 million tons of shoes at 20 cents per pair. There is no such shoes, that would have cost 20 cents per pair, taking into account shipping costs, insurance, cargo, for example from China (except, perhaps, disposable slippers in expensive hotels). Thus, a real understatement of customs value was at least 20-30 times. At that time – this is the real facts – Italian leather boots that never cost the manufacturer less than $ 50 per pair, was declared when imported into Ukraine for $ 1.5 per pair.

Chairman of the League of shoe manufacturers, leather goods, furs and leather goods "Ukrkozhobuvprom" - Alexander Borodynya

– Why is there such a substantial understatement of customs value?

– Matches the interests of the importer and, obviously, the interests of customs officers, who turn a blind eye.

I then worked in the Ministry of Industrial Policy, and we are acutely raised these issues at different levels. When the situation is pumped, it made state agencies more or less control the importation of shoes. As soon began to collect customs duties from the customs value of approximately real (although the total cost – almost never) pay 10% import duty and 20% VAT. In this case, the imported products was close to the competitive environment, Ukrainian.

In this case, at the expense of very high quality Ukrainian shoes and ability to work in our market we can and can now compete.

– Ukrainian manufacturers of footwear imported raw materials (leather, furniture, shoe soles, heels and other accessories) for the production and there are only sewing?

– There are two areas of the shoe industry of Ukraine.

The first – is the production of “their” shoes, when the company itself buys the materials, she makes and sells its products itself (usually through middlemen – wholesalers and retailers). The second – working on tolling scheme, which takes a large share, as the first line. If in the manufacture of clothing tolling scheme takes the lion’s share of total garment production (80-90%), the shoes she has less than 10%.

Our company is 100% dependent on imports, both equipment and in many ways – from the import of materials. Equipment for the production of footwear in Ukraine in general is not performed, thus it is very expensive. For example, a machine for pribivki heel for women’s shoes costs 30-50 thousand euros. However, some of the materials in Ukraine is also successfully carried out: the soles, a certain range of leather for shoes, and some other components.

Ukrainian arch supports, for example, are usually the buyer does not see until they break down, largely determine the “wear” shoes, not inferior to world standards and are exported to many countries, in Italy the same.

– Where is mainly imported shoes in the Ukraine?

– In Ukraine, exporting footwear for more than 50 countries from all continents. Most of South East Asia – up 90% from China, but also from Vietnam and other countries in the region.

Moreover, imported from China from January-September 2010 about 82 million pairs, only 6% – of genuine leather. The rest is mostly – synthetics, which the buyer is often “vparivayut” like genuine leather. For example, sometimes the seller uses the term “pressing the skin.” So, this is – a literal translation of the term – synthetic leather.

There are about 70 thousand pairs of shoes made of genuine leather imported from Italy. Although judging by the offers of trade, this shoe is much more. For example, one well-known shoe brand that is positioned as a salesman of Italian shoes, virtually all footwear imports from China.

In the end, I say we are not against imports. Fair competition – this is an incentive to improve the quality of Ukrainian products. But honest.

– Do you think that Ukraine can compete in the footwear market in China?

– Absolutely. We produce and sell 50 million pairs of shoes!

Of course, we have difficulty competing with imports from South-East Asia in economic terms. There working day and working week lasts as long as necessary to the employer. One day a colleague who worked in China, said that he does not know when the workers off and leave. They work 12 hours and 30 days a month. Workers usually do not receive a pension. Accordingly, the production costs and taxes are minimal.

But the Ukrainian shoemakers compete quality and product range, quick reaction to changes in market demand.

– How different labor costs, such as China, Ukraine and Italy?

– The cost of the labor force in Italy in the cost of shoes – about 50%, in Ukraine – about 15-25%, depending on the type of footwear. For China to call specific numbers is difficult, but judging by the above – the rate of one working hour – several times lower.

– Which segments of the strong Ukrainian shoes?

– This high quality spring and autumn, winter men’s and women’s shoes made of genuine leather in the mainstream segment and a segment of the “average plus.” For summer and beach assortment us to compete with China is very difficult, especially in the price factor. In addition, completion of this range requires the widest range of materials, which makes China itself. But in this range of perspectives and have some results. This will largely depend on its ability to solve a problem if “gray imports”.

– From import to Ukraine materials and components for footwear?

– From different countries: Turkey, China, Italy and Poland. However, as soon as the Ukrainian market there are components or materials of Ukrainian origin, domestic shoemakers willingly waive import. But it should always be respected for the competitiveness of quality, range, price and delivery terms.

By the way, a number of tanneries in the last year formed an association “Ukrkozhprom”, and invited me to her head. One of the major tasks of this organization is just the production of high quality leather for shoes.

– That is, it makes no sense to initiate a rise in import duties on shoes?

– We have been abandoned by this. When duties were twice as high, the market situation was not better. But we will never give up control over the customs value of imported understatement shoes.

Today, the average customs value pairs of shoes imported to Ukraine is about $ 3. This, of course, is much higher than the then average price – 20 cents. If, for leather shoes is $ 10 per pair, then the synthetic shoes – about $ 2.7 per pair. This is – far from the customs value of real shoes.

– anyway it’s a low customs value?

– There is a simple arithmetic: the price of imported shoes in the store should be in 2, the maximum is 2.5 times higher than the customs value (including VAT). Q: We Ukrainians that annually buy in shops and markets 100 million pairs of shoes for 50-70 USD. a couple?

It is interesting to hear the information of customs authorities on improving their performance in this regard. But for the first 9 months of last year against 2009, the average customs value of imported leather and synthetic shoe dropped. This is alarming. In addition, in our view, there is a danger in declaring imports of footwear of leather and artificial leather deliberately declare.

We will seriously review these issues and did not leave alone. We are talking about economic security.

– It is difficult to distinguish from genuine and artificial leather?

– Externally distinguish synthetics from natural leather, without cutting the shoe can be difficult. But I would venture to give one piece of advice to buyers: if the visible edge of the shoe parts are bent so that the cut was not visible, it is very expensive or elite leather shoes, cheap shoes, or synthetic. The rule is triggered at 95%. However, now there is such a synthetic leather, in which the cut after a special treatment is difficult to distinguish from genuine leather.

– And what about today, for your data, the situation of trafficking in Ukraine shoes?

– I do not think that Ukraine get large amounts of contraband shoes. The fact is that even the 100 million pairs of footwear imports in 9 months plus domestic production is almost completely satisfy domestic demand in Ukraine.

That is a weighty niche for smuggling, I do not see. All the more reason to import “in black”, smuggling, with crime, with all the risks, if possible, or underestimated the value declared as artificial leather shoes, bring in legally?

If the customs value of one pair – $ 3, all other payments are about 90 cents. This – not so significant sums of money to pay their overhead was. But if the customs value – $ 30, then payments to the budget increased by 10 times.

– How does the situation in the light industry second-hand? Do you support his ban, initiated by the Office of Brodsky?

– Second-hand clothes – a huge problem for Ukraine in all respects. 7 years ago, working in the Ministry of Industrial Policy, analyzing the statistics of second-hand, I find that every year in Ukraine, then imported 3.4 products per capita in Ukraine. With revenue, not net income, and so-called “rise” of the business ranged from 1,000% to 5,000% of customs value. That’s why this business is so booming in Ukraine.

It is now imported second-hand in Ukraine in 2 times more. It affects the economy, though at a shoe industry is less than the production of clothing.

– Domestic vengeance designers trying to promote “ukraїnske” on the world market, to convince us that we can produce high-quality footwear, apparel and accessories. Do you believe in the success of this PR project?

– We are currently preparing an action. Will be registered trade mark, that is, the words “I love ukraїnske VZUTTYA” with a heart. Our association will provide an opportunity for all shoe companies that meet certain requirements to apply this sign next to their logo. This will be an additional indication for the consumer that the manufacturer of footwear has a good reputation in the market.

– What do you think will the shoemakers to put this inscription?

– Will. Best Ukrainian shoemakers now write “Zrobleno in Ukraїnі.” And the shoes are being exported to Europe, – “Made in Ukraine.” As consumer confidence to the Ukrainian perspective, our shoes.

As for the Ukrainian designers, then, in my view, among them many talents. But the talent in design, but not in the business.

– What is the role of Ukraine in the quality of products, including shoes, are State Standards?

– In our society there is a myth that the supposedly state standards can ensure the quality of consumer goods. It is – true.

Older people remember what a queue lined up for the Yugoslav shirts. And the quality of Italian, Spanish, Finnish or West shoes were legendary. I have studied this question. So, neither in Italy nor in Spain, nor in other European countries has never been, no, I assure you, there will be national standards in terms of quality footwear.

However, each firm knows what quality and knows how to implement it in their products, but this is her “know-how.” Each brand has positioned itself in the market with a certain level of quality. And it focuses on the buyer.

– So you have to offer guests cancel their shoes and do not control the quality of our products?

– Let’s look at the issue from the perspective of the buyer.

Existing standards have been in Soviet times. Strictest control of their observance – at all levels. Result: 99% of the shoe meets the standards for first grade, 1% – in the second. But the shoe and the first and second grades are overwhelmed with the counters, and the buyer is lining up for the import of footwear (and clothing, and furniture), produced not by state standards. Here’s to you and answer whether you need to control the “Soviet” or “Ukrainian” standards in production.

In the case of a defect caused by footwear manufacturer, then, for example, European legislation provides the consumer the right to protect their rights – to exchange, repair, etc. It works around the world. But even the concept of state or national standards of quality shoes there does not exist.

In the same Italy, for example, the manufacturer does not provide a fixed warranty period for the use of shoes – the law is not provided. If the defect is found in the shoes of the manufacturer (which existed in the product at the time of sale), it will change the product and after 2 years. The European manufacturer is responsible for its brand reputation in the market and so loyal to the complaints of consumers.

If you have purchased at least once some shoes and then they parted (which is unlikely, given the high level of quality adhesives used in footwear production), then you will no longer buy in the store or that brand. So cherish the Ukrainian shoemakers reputation among consumers and untwist their brands.

– whether to the Ukrainian enterprises shoes for world famous brands?

– There is. By tolling scheme. The shoes then come back here in Ukraine and is sold in boutiques in the capital. This suggests that the produced products in Ukraine – the European quality. The Europeans are willing to buy clothes and shoes, made in Ukraine.

– Is it profitable to produce shoes in Ukraine tolling scheme?

– Not really. We have the majority of enterprises davaltsev only work on this scheme and do not implement their own product under their own brands. This deprives them of their commercial flexibility in negotiations with European partners. Foreign customer knows that the Ukrainian company to 100% depending on the give and take orders, and dictate terms.

I am not an opponent of tolling schemes, they can not destroy. Tolling scheme retained the capacity, professional capacity, intelligence, and it gives people a piece of bread, let them callous, but it does. To make butter, you can not throw a piece of bread.

– How much “pull” today the launch of shoe production in Ukraine?

– We mean business – 50-150 employees. This, in my view, the optimal size for a shoe factory in Ukraine. If you buy the equipment for 100 new jobs will require at least 500 000 euros, a protracted car (one job) is worth 100 thousand euros or more. This – not counting the cost of buying or leasing a building, and working capital needs.

The modern shoe production – this is not a shoemaker and shoe-thread with an awl, it is – high technology, computer graphics and computer-aided design of footwear, hi-tech equipment and advanced materials, which produce the most developed countries and, of course, highly professional workers and specialists.

In the footwear industry in general is very difficult to calculate future profits, because the huge role played by skill manager.

To do this, Ukrainian shoemakers attend various exhibitions, studying global trends. He or heel shoe, which appeared on the show in Italy, after a year find a buyer in Kiev, Dnepropetrovsk and Lvov. So if you’re lucky there are not shoe manufacturer of their designers, it is just “flies in the tube.” It may invest as much as necessary, but if that does not manufacture the shoes, which like the Ukrainian girls, all it will remain in the warehouse.

– According to the regulatory authorities, consumers are now protected from the bad low-quality goods. In particular, by law, the businessman warned about test for 10 days, which allows him to get ready and hide possible flaws or simply to temporarily close the shop. How do you assess the level of state control in Ukraine for the quality and safety light industry?

– With regard to state supervision. Indeed, nowhere in the world there is no rule about the need to prevent trafficking of checks for 10 days. But for now, I believe such a rule in Ukraine should be. Because that state control, which today is carried out, it’s absolutely not necessary.

– Why?

– Because today by the state control of standards, rules and regulations. Compliance with standards do not test products anywhere in the world.

None of the light industry in the Ukrainian market does not meet Ukrainian standards. And does not match because it can not and should not respond to them in the interests of consumers. Consumers do not need to meet these articles with Ukrainian standards. The role of standards in a shoe – it is a myth.

Besides, the Ukrainian standards are required only for Ukrainian goods and for imports – is not required. This is – discrimination Ukrainian manufacturer.

I once asked a European expert on the WTO issue, contradict the requirements of the World Trade Organization that the Ukraine for Ukrainian goods establishes requirements that are not available to imported goods. He replied that he certainly does not contradict the main thing that you did not create the worst conditions for imported goods. And if you’re doing worse conditions for their products – on health, but this is tantamount to suicide. That is – our system of Ukrainian standardization and state supervision.

Also, I would say that no pair of very high quality and expensive Italian shoes does not match the Ukrainian standards and can not meet them, because it is made for the consumer and take into account its quality requirements that are impossible to describe in the national document.

– What are the documents certifying the quality, should require the seller to the consumer? What should I look?

– It makes no sense to require the seller to the documents confirming the quality and safety footwear. Nowhere in the world there are no such documents. The fact that safety shoes made health service. All materials used in the manufacture of our shoes are hygienic sansluzhby and stored in the enterprise. Accompany these documents shoes in the store – is a Ukrainian unnecessary invention.

By the way, which was introduced some 15 years in Ukraine, the mandatory certification of children’s shoes are absolutely useless in terms of respecting the child’s interests and detrimental to the Ukrainian manufacturer. It is therefore up to the introduction of this certification, we released six pairs of shoes per child per year, and now – a couple of the 20 children, and have lost 30 thousand jobs in the shoe industry.

– Whether there was an adoption in 2010 of any legislation that improve the situation in the footwear market for the consumer?

– The Verkhovna Rada of Ukraine in December last year adopted the Law “On State market surveillance and control of non-food products”, which should enter into force 6 months after publication, and noticeably improve the situation with state control of Ukraine.

In addition, the Ministry of Industrial Policy now prepared a draft technical regulation which specifies requirements for marking shoes. Revised project by the Ministry of economy – will not deny my participation – it is generally consistent with the legislation of the European Union. We evaluate it positively: the buyers will be able to get the available information, from which it is made shoes – in the form of simple icons that we sometimes see on the shoes.