One of Brazil's largest manufacturers of ladies' footwear Calçados Azaléia has decided to transfer part of its production to China. According to the company, the decision to move production is an attempt to stem rising costs caused by a falling dollar exchange rate and a strong Real.

The company, which closed one factory in the state of Rio Grande do Sul at the end of last year, is to produce 30 styles in China. Operations at the new facility should begin this year.

"Officially, we are no longer a 100% Brazilian company. All those shoes will no longer be Made in Brazil," stated Paulo Ricardo Wolff, an executive in the export department of Azaléia. "Our exports have dropped from 25% to 20%.... We need the US dollar exchange rate at R$2.90 minimum."

Mr Wolff explained that Azaléia had already signed production agreements outside of Brazil before. "Since the US dollar started falling almost two years ago, we have been subsidising part of our exports in order to keep our position in the market," he said. 

Heitor Klein, managing director of the Brazilian Association of Footwear Manufacturers (Abicalçados), said it is not only Azaléia that is leaving the country. "Dumont-Paquetá has announced that it will transfer part of its production to Argentina. And there is word that another two companies will follow suit," he said.