Guangzhou, China – Xuchuan Chemical, which makes polyester polyols for footwear, said US sanctions will stop its revenue growing in 2019.
‘Our US orders have plummeted,’ the company’s South China business director Sun Gang told UTECH-polyurethane.com. He was talking at PU China, held in Guangzhou 5-7 September. Before the trade conflict Xuchuan had maintained a growth rate over 10% for several years.
As well as making polyester polyols, the company makes PU resin for footwear; water-based and solvent-free PU resins for faux leather; and, PU adhesives. Xuchuan supplies a number of China’s top sneakers labels such as Anta, 361°and Li-Ning.
The company’s overseas sales, especially in Southeast Asia’s footwear sector, have been expanding much faster than its domestic business, said Sun.
Some exports have rerouted their US sales through Vietnam to avoid the tariffs on exports from China to the US. But Vietnam has announced a plan to raise taxes on such re-exports unless a considerable amount of value is added in the country. Reports suggest this could mean that unless a product increases in value by over 70% an export tariff could apply.