Extreme Cold Hits The Textile And Garment Industry Quietly.

It was already dog days, but Cai Xuhui's heart fell into the ice hole.

The textile and

The manufacturers try to keep themselves warm and invest in the production to ensure the normal operation of the enterprises.

Persistence is the only thing Cai Xuhui and his colleagues can do now.

Shutting down means losing customers, losing the market and then completely withdrawing from the competition in the industry.

The sharp decline in export orders, the rise in labor costs, the shrinking of product profits, the difficulty in financing enterprises, and the sweeping economic crisis all over the world have made China's textile and garment industry in an unprecedented predicament.

The continued downturn in the market will be worse than ever for the already devastated industry.

The crisis is also a turning point. China's textile and apparel industry is standing at a crossroads of adjustment and pformation, and the new market shuffling is coming.

Poverty will change, but change will lead to death.

Frequent reduction

In July 13th this year, Feng Zhu textile (600493, stock bar) (600493) announced that its second largest shareholder revitalization Industrial Company on July 11th and 12 cumulative holdings of 13 million 464 thousand shares of the company, accounting for 4.95% of the company's total share capital.

A week later, in July 18th, the revitalization industry again reduced 136 thousand shares of the company's shares, accounting for 0.05% of the total share capital of the company.

If the time goes further, from February 27th to March, the revitalization industry will also sell 27 million 200 thousand shares of Phoenix Bamboo textile stocks, accounting for 10% of the total share capital of the company.

So far, in less than 5 months, the revitalization industry has gone through a frenzied cash flow through the Shanghai stock exchange block trading system and the centralized auction system, and has sold 40 million 800 thousand shares of Phoenix Bamboo textile stocks, accounting for 15% of the total share capital of the company.

But at the end of 2011, the revitalization industry also held 25.19% stake in Phoenix Bamboo textile.

At the same time, the price of Phoenix Bamboo textile fell from 7 yuan at the end of 2 to 4.31 yuan in July 12th, during which it dropped by 38%.

Feng Bamboo textile encountered a sharp reduction, not a case in listed companies.

In July, a number of Listed Companies in the A share market issued a notice that the main shareholders of the company were reduced.

In the listed companies being reduced, the textile enterprises are relatively concentrated.

According to statistics, since this year, 8 major textile manufacturing listed companies have experienced major shareholder reduction events, and most of the reduction occurred after June, with a total reduction of 410 million yuan.

For the above phenomenon, the industry analysts believe that the global economic crisis has caused unprecedented impact on China's textile industry, and exports are sluggish and domestic sales are sluggish.

Compared with previous years, the situation in the first half of this year is particularly bad. Shareholders are pessimistic about textile listed companies, so it is not difficult to understand how to reduce their holdings.

Experts predict that in the second half of this year, the operation of textile enterprises will still face greater difficulties and there will be no signs of recovery in the short term.

Therefore, for various purposes, the reduction of shares by major shareholders of listed companies may continue in the future.

Keep going by painstaking effort

"I have been doing this business for more than ten years, and I have never encountered such a situation this year.

What will happen later? I don't know. "

In an interview with Zeit weekly, Wu Chengyao, general manager of Jinjiang silk spinning and garment Weaving Co., Ltd. could not conceal frustration and confusion.

Compared with the same period last year, the volume of the company's business has been reduced by nearly 4, and the start-up rate is only 8.

"Not only the order is small, but also the capital is slow, and the arrears are very serious."

Wu Chengyao complained that in the past, when the economic situation was good, it would be possible to get the payment in a month or so. Now it is normal to be in arrears for three or four months.

There is almost no profit for the products, but enterprises still need to start working hard.

Although the cost of raw materials has dropped by about 10% this year, labor costs have risen sharply, and the profit margins have been further compressed in the industry's already very pparent textiles.

Starting work is just to maintain the normal operation of the enterprise and tell others that they are still alive.

"If we want to maintain our old customers and ensure skilled workers do not run away, we will be finished at the first stop and basically quit the market."

Wu Chengyao said.

Fortunately for Wu Chengyao, as a small company, because of its good product quality, his company survived the violent shock of the economic crisis.

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The days of big companies are also bad, especially for export-oriented enterprises.

Cai Xuhui, manager of Renhe Business Department of Jinjiang, told times weekly that the profits of the company in the first half of the year were greatly reduced, "almost shrinking 30%-50%". At present, it can only actively expand the South American market to make up for the deficit left in the European market.

In addition, he hopes to attract more customers through exhibitions.

In July this year, Cai Xuhui went to Hongkong to take part in an exhibition as a purchaser to inspect spring and summer clothing.

To his disappointment, there were more exhibitors than purchasers in the exhibition, and the turnover was not large.

Cai Xuhui asked around his peers. Many companies had no orders. Most of the machines had stopped. Some of the companies that ran the brand had a stock crisis and had a backlog of products.

Not only is exports blocked, but domestic sales are also grim.

What Cai Xuhui understood is that the number of orders made in some areas in Jinjiang has also dropped sharply.

In Cai Xuhui's view, the situation faced by China's textile industry this year is even more severe than that of the 2007 financial crisis sweeping the globe.

With the depreciation of the euro against the RMB, the European market continued to be weak and the signs of recovery were hard to see. Export textile enterprises suffered unprecedented heavy losses.

Many respondents told reporters that as a major textile and garment industry in China, Jinjiang and Shishi are relatively good.

In Jiangsu and Zhejiang provinces, some factories started less than 3 of their start-up power. About 60% of the enterprises were in a state of halting production and semi shutdown. In some places, even earlier in the year, workers returned home.

"Last year the situation was already very bad, and it was expected to be better this year, but I did not expect it to be worse."

Cai Xuhui is pessimistic about the future. "At least for the first half of the year, I have not seen any signs of improvement."

"It is estimated that this year is the only way to achieve a smooth pition."

He prayed, and predicted that by the end of the year, China's textile industry will usher in a large-scale collapse.

Tian Qiming, President of the Shishi textile and Garment Association, looks at how long the current situation will last. It still depends on the international situation. "Next year may not be very optimistic."

Forced pformation and innovation

In July 18th of this year, Adidas, the international sports giant, announced that it would close its only own factory in China in Suzhou Industrial Park in October.

Outside analysis is likely to move to Southeast Asia.

Regarding the reasons for closing the factories, Adidas's reply to the media is "strategic considerations for reintegrating global resources".

Industry analysis, Adidas's move may be to reduce production costs - with the rising wage level of Chinese workers, Adidas hopes to find cheaper labor in Southeast Asia.

In the past few days, Adidas, one of the biggest sponsors of the 2012 London Olympic Games, has been plunged into a "sweatshop" public opinion whirlpool for paying 10 pounds a week ($15 or 100 yuan) to the Kampuchea garment factory for its Olympic licensed products.

The average monthly salary of Adidas's factories in Suzhou is around 3000 yuan.

In fact, before Adidas, as early as after the global financial crisis in 2008, due to the consideration of labor costs, many famous brands such as Nike and Alex have moved manufacturing factories in China to Southeast Vietnam's Thailand, Kampuchea and other countries.

Made in China, is gradually losing its traditional price advantage.

Textile and garment industry is facing difficulties in export, but it is a microcosm of many labor-intensive industries facing the same predicament.

Statistics from the China Textile Industry Association Statistics Center: in 1-5 months of this year, China's textile and apparel exports totaled 93 billion 523 million US dollars, up 2.63% over the same period last year, down 23.57% from the same period last year.

Among them, the total exports of textiles amounted to 40 billion 566 million US dollars, and clothing exports totaled 52 billion 956 million US dollars, with the growth rates of 1.83% and 3.26%, respectively, representing a decrease of 28.57% and 19.86% over the same period last year.

In the 1-5 months of this year, China's textile and garment exports to all countries and regions, the EU textile and clothing exports amounted to $31 billion 216 million, an increase of -2.9% compared with the previous year.

According to China Customs data, since 2001, China's textile and garment exports have been affected by the global financial crisis in 2008 and 2009, while exports in other years have maintained a high growth rate of around 20%.

In the eyes of many respondents, the position of China's "world factory" is beginning to waver. In the future, the world manufacturing center is only a matter of time for the pfer of cheap labor in Southeast Asia and Africa.

However, respondents also admitted that the only advantage in Southeast Asia is lower labor costs than in China.

China's complete and mature industrial chain, the lowest price of raw materials in the world, is no match for the other party, such as Vietnam, and other countries often purchase fabrics from China in the past.

Therefore, "China's manufacturing industry will never fail."

Respondents believe that the current poor living environment is forcing Chinese manufacturing enterprises to pform and innovate from traditional mediocre products to brand creation.

"I personally believe that the textile and garment industry generally operates for 5-10 years, and if it does not make products with high added value, or establish a brand, relying solely on exports, it will be very difficult to survive."

Cai Xuhui said.

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According to the times weekly, local governments in some parts of the country have given preferential policies or economic subsidies in financing, pformation, innovation and patent technology to support local enterprises.

According to Cai Xuhui, with the support of the local government, a LED fluorescent lamp factory which started construction in 2007 was formally put into operation in 2011. "Because it is a national energy conservation and environmental protection industry, it has a good prospect and a high rate of return."

Crisis is also a turning point.

We should focus our efforts on the domestic market, maintain the normal operation of our enterprises, and wait for the economic situation to get better and work hard. This is the mindset and survival state of the textile and garment enterprises in Jinjiang and Shishi area.

To some extent, it reflects the current situation of China's textile and garment industry.

In the view of Tian Qiming, President of Shishi textile and clothing trade association, in fact, the foreign trade crisis of China's textile and garment industry appeared as early as the outbreak of the global financial crisis in 2008, not unique this year.

"From then on, we should actively expand domestic demand and put more energy into the domestic market, and later we did."

"But with the sudden arrival of the European debt crisis, great changes have taken place in China's domestic financial policies, such as tightening monetary policy and raising interest rates," he said.

Since then, the government has adopted some rescue measures, such as giving preferential policies and small loans, so as to repair the capital chain of enterprises.

However, in such a sudden financial environment, China's textile and garment industry has to suddenly pform itself to the domestic market. It needs a process. After all, the brand building can not be completed in the short term, and domestic demand is also crucial.

Tian Qiming believes that market changes are inevitable for enterprises to shuffle cards, and pformation will inevitably lead to regional competition. The original foreign trade dealers will block the market of local brands, and polarization will emerge.

Enterprises always encounter turning points in the development process, the key lies in how to deal with them.

At present, the crisis encountered by Chinese textile and garment industry is also a turning point for enterprises. The initiative adjustment and breakthrough will usher in a bright future.

While actively exploring the domestic market, China's textile and garment industry is also strives to break through the external resistance.

In July 24th this year, more than 300 enterprises from China participated in the thirteenth China Textile and clothing trade exhibition held at the New York Exhibition Center.

Under the pressure of economic downward pressure and the increase of labor cost in textile and garment industry, the number of exhibitors in this exhibition still hit a 13 year high. The number of exhibitors from enterprises in the central and western regions of China is on the rise.

Zhang Yankai, vice president of the China Textile Industry Federation, said that this shows that Chinese enterprises are looking for their own development in the predicament, while the ability to resist risks has been enhanced. Moreover, Chinese textile enterprises still have confidence in the market prospect.

It has been said that such an exhibition has helped a large number of industries to establish a sales network in the United States. Many small and medium-sized enterprises have also developed the US business on this platform and embarked on the track of healthy development.