Textile And Garment Industry: There Is Still Bright Sunshine Between Mountains And Hills.

In the past two years, the textile and garment industry has encountered an unprecedented cold current. First, the sharp fluctuation of raw material prices has caused the operators to slap the palm, followed by the soaring cost of production, which has made it impossible for enterprises to make profits.

Fortunately, more and more entrepreneurs break through the cage and go out of the country. In turn, they are good at making use of this crisis, adjusting their product structure, practicing hard work and innovating.

A few years ago, I came across some textile entrepreneurs with strategic light. They realized the existence of the crisis very early, and prepared for the precaution ahead of time.

A real business operator must be someone who can make money in the climax of the market and get a cut in the doldrums.

After the 2008 crisis, they began to work together with me to set up the early warning mechanism and contingency measures for the textile and garment industry, and some of them should be used for reference: (limited space, only a few points to share with you).

1) early use of imported raw materials.

In order to protect the interests of cotton farmers, China's management has introduced a minimum cotton protection price of 19800 yuan per ton.

This causes the price of China's real estate cotton to be higher than that of the US cotton.

(19800+1000 warehousing, logistics, inspection fee = "21000", the United States cotton after clearance 17000 or so).

For example, the price of 10 ring spinning in Pakistan is the same as that in domestic countries, while the price of 32 Cotton Combed Yarns in India is 1500-2000 yuan a ton difference compared with domestic prices.

The cost of imported raw materials has obvious advantages.

In labor-intensive industries that only know price, the advantage of raw material prices will undoubtedly have great competitive power.

Import cotton must be quotas and import yarn should not be quotas.

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2) use the strong currency to calculate and the weak currency to settle.

Imports of raw materials are settled in US dollars.

We can achieve the result of "one stone and three birds".

The appreciation of the renminbi is a major trend, with occasional fluctuations, but the trend of long-term appreciation will not change.

Using US dollar settlement can not only hedge the risk of currency appreciation, but also enjoy 90-120 days' payment period and the exchange earnings brought by the depreciation of the US dollar.

Dollars in contract

3) speed up product structure adjustment and squeeze all unnecessary production costs.

For example, the same output of 20 yarn spinning is much less than that of ring spinning.

Today, with the increasing labor costs, any measures to save labor force and employ workers are undoubtedly the gospel of enterprises.

Clean dyeing and finishing technology in the downstream printing and dyeing industry can save a lot of environmental protection and the cost of sewage treatment.

4) intensify the research and development of innovative products.

Increasing investment in R&D can get rid of competitors' plagiarism and low-level duplication. The textile group enterprises I know in Xiaoshan, Zhejiang, have invested a lot in R&D in the past few years, helping them successfully escape the crisis of 2010-2011 years, social benefits and economy.

The blowout of raw material prices in 2010 and the diving price of raw materials in 2011 are not all bad things.

In a larger sense, it is a profound risk education for entrepreneurs in the textile and garment industry.

From 2012 to 2013, entrepreneurs will face greater challenges.

Pessimistic negative people see "three big mountains". Optimistic people see the "sunshine" between mountains and mountains.

Victory is beckoning to you. The dawn is ahead.