Corriere.it – ​ The case of Coronet in the Wall Street Journal

The CEO Tagliarini: «Our customers flee to Southeast Asia, we cannot avoid it. The market in Italy has collapsed “

Too early to clarify the future of the three locations of Coronet, a company active in the production of synthetic leather used in the footwear, leather goods and clothing sectors. “I’m about to go to a meeting to discuss it with management, it is certain that the Italian market has collapsed,” Jarno Tagliarini told Corriere.it. The operational headquarters in Corsico, in the Milan area. Two plants in Lazio: one in Cisterna di Latina, the other in Velletri. The latest in Huizhou in Guangdong, with over 300 employees.

ENTRY IN VIETNAM – Now – writes the Wall Street Journal and confirms Tagliarini to the Corriere – the hypothesis of an upcoming opening in Vietnam, «a country sufficiently developed in terms of infrastructures and with a lower labor cost», admits the manager. «We are forced – he adds – because all our customer shoe factories are relocating there. And if we want to survive, while also maintaining employment levels in Italy (over one hundred employees and a domestic turnover of 12.5 million euros, ed.) We have no alternatives. Either we invest in Southeast Asia or we die ».

INVESTMENTS – The Coronet case is not the only one. Indeed, it is used as a model by the American newspaper to detect an increasingly widespread trend. Which gradually sends the last thirty years of global investment flows into the attic. Since Deng Xiaoping’s opening to the market, China has developed into a genuine manufacturing platform on a global scale. Attracting direct investments from companies in Western countries. The ratio has been explained countless times by economists and stems from a lower labor cost, capable of making greater profits. Obviously these are products with low added value, basically semi-finished products suitable for sub-supply.

THE SECTOR – The footwear sector is one of those most affected by this mass migration to countries capable of reducing production costs. So far it was China that had taken the lion’s share. Now the Land of the Dragon is also converting its industrial model to higher added value processes. Not only in textiles, but also in consumer electronics. The Chinese domestic market is growing more and more. It becomes more selective, consumption is moving towards a greater search for taste and elegance for the growth of the purchasing power of the Chinese middle class. And at the same time, trade union pressures are also making themselves felt, demanding wage increases and thus a gradually increasing labor cost. This is why for the first time since the Great Crisis, foreign direct investment to China in 2012 fell by 3.7%, a fall that observers call cyclical, but which some think is the beginning of a trend with no possibility of reversal. Thus the decision of those like Coronet to focus on Vietnam, Indonesia and Thailand. “For now we are also staying in China – explains Tagliarini -. If anything, the problem is Italy, I hope the next government understands that without a tax reduction, domestic demand does not restart and the risk is to close ». With or without Vietnam to keep us afloat.