Yaqoub Roalm, President and CEO of the Shanghai -based Velong Enterprises, a manufacturer and a source of cooking equipment, is moving in changing customs tariffs and trade.
Global Finance: Can your business in China remain applicable by 30 % of the American definitions?
Yaqoub Rawad: I now think there are some problems that lead this, and they are difficult. The main issue is: Can I trust this number? Our customers are looking for this and because retail products are working in the way we quoted or transfer to our customers for the next season.
GF: To enhance the strategy to look beyond manufacturing in China?
Roch: The recent decisions made by the Trump administration regarding the definitions of Chinese imports in the United States have not changed our boost to move manufacturing outside China. However, can we work 30 %? We built large stocks, ranging from $ 8 million to 10 million dollars.
We need money to build our factories abroad, which is widely about $ 160 million in China along with our Indian manufacturing partners now – we have two factories in India and one in Cambodia – we get about $ 250 million. Based on these groups, 10 million dollars are much for us and I need money for cash flow and investment. Thus relief at the tariff level came 30 % of the ability to move our stock, but our customers should worry about cash flow as well.
GF: What is the situation related to charging and charging?
Roch: Some ports such as Chengdao, Yanteian, as well as Shanghai, and Ninjo are soaked for a while, but they are not that way now. One of the factors is a significant increase in shipping prices, and the shipping prices in the Kofid era. The number of vessels carrying goods from China or Asia in general to the United States has decreased significantly. The shipping pricing may take 18 months to return to where they were, and they were already high.
GF: How does your peers respond?
Roch: They say, let’s focus more on Europe, but we have a lot of capacity on much smaller markets. Thus, we are all forced to force each other to pursue a smaller pie, and frankly we do it because we should do so.
GF: Is it very sensitive to prices?
Roch: It is sensitive to prices and more now because we are all competing for those markets. However, we have never focused on the United States. Canada is a good but small market. The population is a small part of the population in the United States. Over the years, you had superior division traders like Walmart, Home Depot and Lowe’s, which dominates the majority of the market and the same in Europe with Carrefour or Tesco. Each of these markets works differently in terms of demand for the product, in addition to that you do not have the same folders you get in the United States. European regulations are another consideration.
GF: How important is the exchange rates for your work?
Roch: When I got here for the first time 20 years ago, Renminbi was to the dollar 8.2 and now 7.4 years old – which is contrary – has affected this positively, but the dollar is now weaker and this year is expected to be 5 % to 8 %. This makes Chinese exports more expensive, and we have the definitions and shipping prices that harm us. All these things together add up. Therefore, I think that when I saw that mitigating tensions between President Trump and President Xi was an initial pest, but when all these factors add it, it is still difficult.
GF: There is a lot of talking about re -calibration of the supply chain inside APAC. Is this achieved?
Roch: During President Trump’s first term during the period of Biden, the majority went to Vietnam, and you have Japanese factories, Korean factories and Vietnamese factories. Now I would like to say that China has taken the initiative.
The issue is that people see that this commercial dispute now represents an American issue, but it is an issue in China as well. And I think people want to see a more balanced supply chain and the people who will work through this will remain alive, the trade will be balanced, and this may be better for the world. But it is definitely painful now.
