Swiss cross rules send Kybun expansion to Italy

Swiss shoe manufacturer Kybun will create 40 new jobs in Italy instead of expanding its production in Switzerland, SRF reported. The company will retain its current 50 jobs at its plant in Sennwald in the St Gallen Rhine Valley.

Co-chief executive Claudio Minder said new rules governing the Swiss cross had changed the company’s plans. He expects foreign competitors to bring cheaper products labelled as Swissness to the market. “We cannot compete with that,” he said.

Kybun mainly produces health shoes and sandals in Sennwald for the Arab market. Products leaving the plant carry the words Swiss made and a Swiss cross on their soles. The quality label gives the company a competitive advantage. In the Gulf states, a Kybun sandal can cost up to 500 Swiss francs.

In spring, the Federal Institute of Intellectual Property, a Swiss government agency, relaxed its rules on the use of the Swiss cross on industrial products. Goods made entirely abroad can now carry the symbol if their design, research or development took place in Switzerland. The products must include a reference such as Swiss Research or Swiss Engineering.

The decision was justified by economic pressure on Swiss companies. It has also been linked to Swiss shoe manufacturer On, whose shoes are produced in Asia while their design and development come from Switzerland.

Minder said the change would create jobs abroad rather than in Switzerland. Production in Switzerland was already expensive, he said, and the new rules would put further pressure on margins. Kybun’s hiking shoes are already made in Italy, where the company has access to expertise in shoe manufacturing and lower production costs.

Under the new rules, those hiking shoes could also be labelled with a Swiss cross. Kybun will not do so, Minder said, calling the practice consumer deception and contrary to the company’s principles.

Sven Reinecke, a professor at the University of St Gallen’s Institute for Marketing and Customer Insight, also described the new rules as misleading. Customers pay significantly more for Swiss products, he said, while the changes could encourage Swiss companies to move production abroad.

Kybun nevertheless plans to maintain and improve its Swiss production. The company is working on automation to keep its Swiss-made shoes competitive.