Serious Cost Increases Shaoxing Textile Industry'S Overall Losses

"Most businesses are running at a loss."

Deputy mayor of a textile town in Shaoxing told the author that in March, two garment factories and one lace lace fabric factory went bankrupt.

Among them, a garment factory signed a lease contract with the town four years ago to lease the idle plant of the industrial asset management company at a price of 120 thousand yuan per year, but until now, its rent of 360 thousand yuan has not been paid yet.

The town has 25 Industrial Enterprises with a production value of more than 5 million yuan and a staff of more than 100 employees, 173 registered small and medium-sized enterprises, and more than 700 small family workshops that have not been registered.

From the Shaoxing Municipal Development and Reform Commission, the prices of raw materials, such as coal, electricity, oil and pportation, have been rising. The price of raw materials has continued to rise, and the purchasing prices of raw materials for industrial enterprises have risen by 8% over the same period, or a new high of two years.

The ex factory price of industrial products increased by only about 2% compared to the same period last year, and the difference between the two increased from 1.6 percentage points in the same period last year to 6.4 percentage points.

"Dye prices have risen by 15% to 30% over the past year."

China Dyestuff City, Mr. Hu Yan, said the price has gone up, and its downstream customer Zhejiang Yong Tong bleaching and dyeing Co., Ltd. has increased the average processing price of T/C cloth per meter by 8 cents.

Mr. Sun, senior manager of Shaoxing Tianrun Weaving Co., Ltd. complained that the cost of raw materials, labor and so on has been rising. The price of printing and dyeing has risen from 1.4 yuan to 1.7 yuan per metre, more than a year ago, to 1.9 yuan to 2.5 yuan now. However, the price of garment fabrics can not be raised at the same time, and its performance has been greatly affected.

According to the China Keqiao textile index, the export boom index in March 2008 was 1006 points, down 22.82% from the previous period, and the downward trend is obvious.

"The whole situation is not optimistic, but no big company is out of business."

The deputy mayor said that once the business was shut down, not only the customer resources would be lost, but also the banks would be forced to pay for their debts. This would inevitably lead to a vicious circle of social assessment and the failure to receive receivables and devaluation of fixed assets.

"Better die than live, even if the order is small or the order is not profitable, large enterprises will adjust their business to each other and maintain a normal operation state."

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