Textile Industry, Money And Trouble, Mixed YOUNGOR With Commercial Real Estate

The zero profit or even negative profit situation of textile industry is intensifying.

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

Li Rucheng, chairman of YOUNGOR, recently said that enterprises are indeed experiencing pressure from RMB appreciation, exchange rate adjustment, price rise of raw materials and new labor contract law.

Under the new labor contract law, the management cost of YOUNGOR will increase by about 3000000 yuan.

To shift the cost pressure, YOUNGOR plans to invest 2 billion 500 million yuan to implement 50 "ball making projects" in various localities.

The so-called "ball" is about 2400 square meters of marketing company in front of YOUNGOR headquarters building. The exterior of the building is mainly circular glass, which can create 30 million yuan of sales per year.

Industry analysts said that YOUNGOR's move meant that some production factories began to pform their channels after accumulating certain capital.

However, from product development to real estate development to commercial property development, this attempt sequence is rarely seen in China, and confidence may come from YOUNGOR's real estate investment in recent years.

According to Liu Xinyu, YOUNGOR's executive director, it is estimated that in 2008 and 2009, the real estate revenue of the company will be 4 billion 800 million yuan and 7 billion 200 million yuan respectively, and the contribution to the company's profits will reach 680 million yuan and 1 billion 120 million yuan.

YOUNGOR group's initial investment budget for each marketing branch is about 50 million yuan, and 50 marketing centers will be built throughout the country.

The sales volume of each company is 15 million yuan / year.

If Li Rucheng's plan is successfully implemented, sales promotion is only the tip of the iceberg.

More importantly, the value of real estate embodied in commercial property will far outstrip YOUNGOR's profits in residential projects.

According to Li Rucheng's preference, the site selection of "ball making project" may be a combination of urban and rural areas or emerging cities in developed cities, so as to avoid fierce competition between mature business circles and existing channels.

Up to now, YOUNGOR has at least reached initial intention with some land regulatory authorities in some places, such as Chongqing, Suzhou, Hebei Langfang, Shenyang and other places, and has obtained certain preferential policies.

In order to better complete the "ball making" plan, YOUNGOR set up a Asset Management Co.

"The main job of this company is to do the work of buying a house, building a house and selling a house, for the location, construction and relocation of 50 marketing companies."

On another public occasion, Li Rucheng, chairman of YOUNGOR group Limited by Share Ltd, also said that this year it will integrate several property companies and set up an independent Limited by Share Ltd.

The company is expected to be established in the first half of this year.