Small And Medium Textile Production And Production Reduction &Nbsp; Enterprises Struggling To Revive

"The market price of 32 pure cotton yarn is 32 thousand and 500 yuan / ton, and the price is 1300 yuan / ton per week.

The purchase price of our batch of cotton yarn is 37 thousand and 500 yuan, which is about 5000 yuan per ton at the current market price.

Zhejiang Jinhua Yutai textile business manager Lao Dong told NetEase finance.

In addition to the loss of raw material inventory, it will also face the embarrassment of the huge increase in manpower costs.

According to Dai Huijuan, general manager of HSBC knitting garments in Ningbo, the labor cost of the company increased by 30% over the same period last year, accounting for 32% of the total cost.

"In addition, more than 70% of our products are exported, and our net profit margin has dropped to 1%-2%. I heard that the renminbi will appreciate in the second half of the year, and only zero profit will be produced then."

NetEase financial in-depth interviews with small and medium textile enterprises in Zhejiang found that most enterprises are now in a state of hard work, hoping to cut through production or other ways to get through this, and so on when the market recovers.

It is difficult for 2008 to lose 5000 yuan per ton of raw material stock.

"The collapse of the tide is not yet, but now the textile business is hard," Lao told NetEase finance.

In Keqiao, Shaoxing, because of last year's stockpiling, enterprises that accounted for tens of millions of books this year are everywhere.

Lao Dong is 34 years old and has been working for 18 years from the bottom workshop of textile industry. Jiangxi is now the business manager of Jinhua Yutai textile import and export company.

Because of its work reasons, Lao Dong has long been running among the Zhejiang textile industrial cluster cities such as Lanxi, Xiaoshan, Jinhua and Shaoxing, and has a personal understanding of the current textile industry.

According to the China Textile Industry Association's investigation in Zhejiang Province in 2009, there were more than 3000 enterprises in the textile industry above Designated Size in Zhejiang Province, 810 thousand employed, 250 thousand below the scale, and 1 million 400 thousand employed.

According to the report of Zhejiang Cotton Textile Association, the proportion of textile workers in Xiaoshan and Shaoxing accounts for more than 70%.

Xiaoshan is the first Chinese textile industry base named "China textile industry base".

1/4 of the country's fabrics, 30% of the printing and dyeing products, and 1/4 of the world's chemical fiber fabrics are produced in Shaoxing.

Shaoxing Keqiao town has become Asia's largest textile distribution center.

Because Lao Dong's company is engaged in the textile trade business, exports mainly, with some domestic cotton yarn, the ability to resist risks is relatively good. "But this does not mean that we are not affected by the low tide of the industry.

For example, the cotton yarn stored in our warehouse has lost nearly 500 thousand yuan since the beginning of the year. At present, 490 thousand sets of clothes are being made, and the loss is estimated to be no less than 500 thousand when the delivery is completed.

It is understood that Yutai textile domestic sales of 32 pure cotton yarn at the current market price of 32 thousand and 500 yuan / ton, a week down 1300 yuan / ton.

The purchase price of this batch of cotton yarn is 37 thousand and 500 yuan, which is about 5000 yuan per ton at the current market price.

"Fortunately, we are trading companies. There is not much pressure on inventory.

Last year, textile manufacturers with high price hoarding goods had a serious backlog of stocks this year, with prices changing daily and prices continuing to decline, and their books accounted for hundreds of millions of dollars, "Lao said.

The textile manufacturer mentioned by Lao Dong mainly refers to the Xiaoshan Shaoxing area.

As the domestic textile industry base, Xiaoshan and Shaoxing are the largest textile material market and textile raw material market in China.

Xu Guomin, a senior manager of a cotton spinning enterprise in Xiaoshan, has revealed to NetEase finance that because of the rapid fall in cotton prices this year and the textile industry's habit of buying or selling, the thousands of tons of cotton yarn materials purchased at high prices last year will be "miserable" if sold at the current market price.

"I don't know how to handle the cotton yarn.

What I can hardly bear is that the old stock is not digested, and the new stock is still increasing. I dare not stop working. This year, recruitment is difficult. If I dismiss the workers, then the market will improve. If there is no skilled worker, it will also delay things.

Seeing that stocks continue to increase and yarn prices slide every day, this is really harder than 2008. "

Xu Guomin said, now can only bite the teeth, hope to be able to support the market recovery day.

Last year, the wages of workers were 1500 yuan per month to 3000 yuan this year.

In June 4th, at the invitation of Lao Tung, NetEase Financial Editor came to Lanxi No. 8, Deng Sheng Road, and visited Zhejiang Jin Yao Textile Co., Ltd. to understand the situation.

Soon after the new textile factory of Jin Yao textile company was newly built, the factory building was very new, and there was still unused building sand for use in the factory area, and even a cement mixer.

Lu Shoujun, manager of the textile and supply department of Jin Yao, told NetEase finance that due to the fact that a loan of 10 million has just been completed, the pressure on the company's funds is not large at present. "To stress, there is indeed a pressure. This pressure comes from many aspects. The most obvious thing is that this year's wage increase is far beyond the previous years."

Lu Shoujun picked up his calculator and calculated it carefully, explaining that the increase in wages in the past year was generally at 5%-7%, doubling this year to 15%-25%.

In the past, labor costs accounted for nearly 7% of the total cost, which is expected to be as high as 10% this year. "Last year, the monthly salary of workers was 1500 yuan -1600 yuan, 3000 yuan this year, and 3500 monthly wages for some skilled workers."

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In fact, Jin Yao textile is located in the upper reaches of the textile industry, and the increase in labor costs is not too high relative to the knitting export processing industry at the end of the industry.

NetEase finance and economics visited Ningbo HSBC Knitted Garment Co., Ltd. in June 8th, and learned that the labor cost of the company increased by 30% over the same period last year, accounting for 32% of the total cost.

Dai Huijuan, general manager of the company, told NetEase finance, "last year, the labor cost is 9 yuan per hour, and this year is as high as 15 yuan. In this way, our staff is still not fully recruited."

According to Lu Shoujun, "Jin Yao textile was registered in 2009. Last year, the factory bought the equipment and debugged production. It was formally put into operation in March this year. According to the current monthly sales situation, the 200 million output value will not be very large this year."

Lu Shoujun admitted that this year's production is not a good time. "If we put it into operation last year, our pressure would not be as big as it is today."

In addition to rising labor costs, electricity bills are also a big burden.

"We have 154 imported machines, and the monthly electricity charge is 600 thousand yuan."

Lu Shoujun said, "the average electricity price here is 0.82 yuan /KWH this year. I heard that the electricity price has been raised, but we haven't received any notice. Once the notice is issued, our profit margins will shrink again."

Lu Shoujun said that this year's textile industry "decades of no experience" market, the difficulties in the second half of the year is that the order that has fallen sharply may not be particularly significant improvement.

"At present, the shortage of raw materials, the shortage of raw materials and the price of raw materials are decreasing every day. We dare not buy large quantities of raw materials and buy tons of tons with a few tonnes. The order is so small that the start-up capacity is not enough, and the factory capacity has not been completely released. We are going to use the limited production to reduce inventory, so as not to affect the gold chain, and we hope to be able to sustain it."

Dai Huijuan, general manager of Ningbo Huifeng garment making company, also told NetEase finance that this year's foreign trade orders dropped by 20% compared with the same period last year.

RMB appreciation and other factors push enterprises to deficit production

June 5th, Xiaoshan.

Rain falls in torrents.

Because the next day is Dragon Boat Festival, Wu Rongguo, a friend of Lao Dong and general manager of Zhejiang Shaoxing Keqiao Yongsheng group Hui Weishi textile company, went to Xiaoshan to attend a gathering convened by Lao Dong.

During the meeting, Wu Rongguo chatted about the current situation of Zhejiang textile industry in a cafe for NetEase finance.

According to Wu Rongguo, Hui Wei Shi is mainly composed of chemical fiber and textile.

When cotton prices are high, enterprises often choose to replace cotton with one material instead of cotton in order to save costs. This material is PTA.

The downstream extension of PTA is mainly polyester fiber, commonly known as polyester.

Polyester is the main raw material of the textile industry. Cotton yarn generally accounts for 60% of the textile raw materials, and polyester takes up 30%-35%. The consumption of the two will be replaced by price changes.

Statistics show that the ratio of cotton distribution in May 2011 has dropped significantly from 81.5% to 73.1%. This change is amazing, indicating that the substitution of chemical fiber and other textile raw materials for cotton increased.

In view of the above reasons, compared with cotton spinning enterprises, Hui Wei Shi company's order is relatively stable, there has not been a sharp decline, but the company also encountered the problem of rising labor costs. At the same time, because of the appreciation of the renminbi, sales fell more serious, coupled with the deepening of domestic inflation, raw material prices rose larger, reducing its net profit margin.

Wu Rongguo said, "the company has three main difficulties. First, this year, the workers' wages have risen to 20%-25%. Last year, the workers entered 18 thousand yuan -2.2 million yuan this year, reaching 35 thousand yuan this year. Two, the appreciation of the renminbi has led to 40% sales decline compared with the same period last year. Sales volume was 10 million yuan in May last year, and only 4 million yuan in the same period this year. Three, the price of dyestuffs needed for printing and dyeing rose by 20%-25% compared with the same period last year, resulting in a net profit margin decreasing from 8% last year to 5% this year.

In terms of appreciation of the renminbi, compared with Wu Rongguo, who is in the upper reaches of the textile industry, Dai Huijuan, who is at the end of the knitting industry in the textile processing industry, can be described as "huge" and "bleak" by pressure and gains.

Dai Huijuan has been struggling for 16 years in the textile and knitted garment industry. The company that created by hand is very influential in Ningbo's east Qian Hu Town, no matter its scale, performance or reputation. Last year, its company realized its output value of 60 million yuan, and its products mainly exported to Europe.

In June 8th, the industry veteran said to NetEase finance, "more than 70% of our products are exported."

Since the resumption of the RMB exchange rate reform in June 2010, the RMB has continued to appreciate against the US dollar. At present, the exchange rate has fallen below the 6.50 threshold and the appreciation of RMB has reached 2.20%. This year inflation has deepened, and CPI has been innovating repeatedly.

Compared with the decline in net profit margin of chemical fiber textile industry, the net profit margin of cotton textile industry has dropped by a larger margin.

According to Lu Shoujun, the net profit margin of its company fell from 5% last year to 2%-3% this year, and its decline is as high as 40%-60%.

Wu Rongguo's worry is far more than that. "I heard the news that from July this year, the export tax rebate will be reduced from 16% to 11%, which is much larger than the appreciation of the renminbi. We are now afraid to pick up foreign trade orders."

It is worth mentioning that Wu Rongguo and Dai Huijuan also said that the company had no special pressure on capital, and even said that even if profits fell, they would not dissolve workers, hoping to survive the hard times and usher in another spring in the industry.

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The difference is that Dai Huijuan told NetEase finance that because of the recent restart of the European debt crisis, the European customers began to lengthen their payments in the 30 days to 90 days, some even longer, reaching 120 days. "Although the company has no financial pressure, but the money has slowed down, orders have been reduced, net profit margins have declined, RMB appreciation and labor costs have increased. These factors are combined, and our capital chain is beginning to become tense. I am afraid that once a customer has bad debts, we will lose money. If such a large number of customers are more than one, it is possible to break up the capital chain."

"What is more serious is that our gross profit margin is only 4%-5% now. It is said that the export tax rebate rate will be reduced by 5 points (5%). If it is implemented, there is no other way out. We can only shut down factories and rent out factories for rent, which is easier than we are now."

Dai Huijuan said with a bitter smile.