African Clothing Industry Must Be Alert To Potential Risks Of Rising Costs

The output of cotton is abundant, the price is reasonable, policy support, preferential tax, low wages, and the bonus of factory building.

Many advantages lie in China.

In front of practitioners.

"Our company is optimistic.

Business, African businessmen are "very good cooperation".

Yao Qiaoe, director of foreign trade in Fujian Quanzhou Caroline apparel limited, said, "African merchants are willing to carry out our standards, unlike big American companies, they have the final say in all specifications."

The output of cotton is abundant, the price is reasonable, policy support, preferential tax, low wages, and the bonus of factory building.

For some Chinese garment manufacturers, the temptation of Africa is much more than "good cooperation".

In 2011, the "roller coaster" cotton price seems to have gradually stabilized, not only a decline, but also once below the state's purchase and storage price adjustment.

In September 26, 2011, the spot price of domestic grade 328 cotton was 19982 yuan / ton, compared with 30 thousand yuan per ton in 2011 March, a decrease of 36%.

Although cotton prices have plunged sharply, the price of clothing closely related to cotton prices has not been loosened. The price of autumn clothing in 2011 is still rising.

Due to high cotton prices in the spring of 2011, many cotton companies hoarded cotton at high prices, resulting in higher cost of products.

It is still in the stage of digestion and inventory.

Clothing industry order operation, raw materials rising pressure lag from last year until now only to the clothing terminal retail area.

The instability of raw materials such as cotton has brought endless troubles to China's garment industry.

"Production and circulation costs continue to rise, and manufacturers have to raise their prices," said a garment boss who acted as a foundry.

According to the National Bureau of statistics, the producer price of industrial producers increased 6% in 2011 compared with the previous year, and the purchasing price of industrial producers increased by 9.1% over the previous year.

In addition, the rise in oil prices in the domestic market has led to an increase in freight costs, and the price of clothing has naturally increased.

Moreover, the Dacron contained in clothing materials belongs to synthetic fiber. It is a byproduct of the petrochemical industry and coking industry. The rise in international and domestic oil prices will also lead to higher clothing prices.

To add insult to injury, with the increase of prices, many enterprises' inventory also climax.

According to a quarterly report, the amount of U.S. state clothing inventory reached 3 billion 160 million yuan, not only increased by about 600 million yuan compared with the 2 billion 550 million yuan earlier this year, but also far higher than the 2 billion 75 million yuan in the first quarter of 2011.

Advantages of pferring Africa

Some people have made an image analogy to the group of enterprises in the process of industrial pfer: enterprises like migratory birds will find the habitats that are most conducive to their survival and development according to market climate changes, and then decide whether to move or not.

The "market climate", the decisive factor, is the "profit depression" that economists often hang around.

In many people's eyes, Africa may be the last "profit depression".

All this stems from the increasing saturation of China's clothing market and the cost of expanding businesses, and the financial crisis sweeping the globe has played a role.

Just as the garment industry is worried about the impact of foreign trade on business, some businessmen intend to temporarily shift their business to African countries, while developing new markets while avoiding them.

The adverse effects.

The price of Chinese clothing exports has weakened due to the price advantage of raw materials.

However, African cotton and other raw materials are well supplied.

LeComit consultatifinternationalducoton has predicted that next year, the total output of French and African cotton is expected to reach 619 thousand tons, an increase of 25%.

{page_break}

In 2000~2010, cotton production in French Africa fell from 1 million tons to 495 thousand tons.

However, since 2011, the situation has reversed, and cotton production in Mali has increased from 103 thousand tons in 2010~2011 to 171 thousand tons in 2011~2012.

Cameroon is also encouraging cotton farmers to expand their planting area from 0.6 hectares per household to 1 hectares, so as to expand production. It is estimated that the total output of cotton will exceed 70 thousand tons next year.

"The Ivory Coast of West Africa is not only rich in cotton production, but also a preferential investment industry in the country," said Pang Lu counselor of the Chinese business office in Cote d'Ivoire.

"Our products have entered the West African market, and we also consider building factories locally."

Yao Qiaoe believes that not only the reasons for raw materials, the company also looks at the rich cheap labor force.

With the disappearance of China's demographic dividend, the problem of recruitment difficulties and labor shortage has intensified in recent years, and even has spread to the central and western regions.

Labor shortage is the rapid rise of labor costs.

It is understood that the employment cost of clothing enterprises in Fujian Quanzhou area increased by 10~30% between 2011.

Labor shortage also allows clothing companies to consider pferring to Africa with a large number of surplus labor force.

The head of Kunming Smoot import and Export Trading Co., Ltd., who is engaged in garment production and import and export business, said that the company intends to go to Namibia to develop. He said: "with the improvement of all aspects of Africa, more people are willing to go to Africa to find out.

This includes building factories in situ.

The southern African Customs Union (SACU) is working together with the government of Botswana to formulate an industrial development policy to encourage foreign enterprises to invest.

The textile and garment industries have been identified as the priority areas for the development of the southern African Customs Union member states (namely, Lesotho, Swaziland, Botswana, Namibia and South Africa).

"There are many communities in Africa. As long as we can enter a market, it is easy to enter other related regional markets."

Yao Qiaoe believes that this is another reason why Africa attracts businesses.

The West African community, the Central African Economic Community, the southern African development community, the East African community and the southeastern African community...

Many African countries are members of several communities and enjoy preferential policies on Tariffs and other import and export taxes among Member States.

This facilitates the development of enterprises in Africa.

However, "it's not easy to go to Africa". Some fashion dealers expressed different views.

"It is suggested that enterprises and individuals should conduct a thorough and thorough investigation before they invest. For example, Mali's labor skill level is yet to be improved."

Liu Qi counselor of China's business office in Mali pointed out.

"The timing system here is not a piecework system. It is all in one size fits all. No matter what is good or bad, more can be encouraged and less can not be punished.

Labour productivity is very low. "

Not only the West African countries, but also Chen Xiangqian, who owns garment factories in South Africa, also faces the problem of low labor skills and low efficiency.

In addition, the employment of local workers is also faced with the problem of "making it easier to give people away."

"In South Africa, it is also difficult to dismiss workers. There are four warnings to be followed, and a third party hearing will be summoned.

According to the current local capacity, 100% is payable according to legal pay, and the factory survival is a little difficult.

Chen Xiangqian believes that the minimum wage standards introduced by the South African government last year made it even more difficult for Chinese clothing enterprises.

According to the regulations, wage standards will reach 516 Rand per week (1 South African rand = 0.8128 yuan) in April 2012.

"Such standards, there are no small risks in building factories in Africa."