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Thursday, August 13, 2009

Original equipment manufacturers in Crisis?

According to recent reports in the business and financial press the footwear export industry may have a crisis after it was discovered Yue Yuen, (the largest original equipment manufacturer (OEM) of shoes for Nike and adidas), recorded a loss in net income in the first seven months. Seems in China both increased costs of raw materials and labor are having an adverse effect on production. Nike has already closed its self-owned shoe factory in China and will transfer its production base to Vietnam and Indonesia, where the labor force and materials are cheaper.

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