Foshan Textile Industry: No Profit, But Also To Endure.

In April 10th, the central parity of RMB against the US dollar announced by the China foreign exchange trading center was 6.9920, breaking through the 7 pass at one go, and the RMB exchange rate officially entered the "six era".

Since the reform of the RMB exchange rate formation mechanism in July 21, 2005, the appreciation of RMB against the US dollar has reached 13.8%.. In Foshan, known as the manufacturing sector, quite a few export enterprises have been trapped in the loss of orders and the decline in profits.

The impact of RMB appreciation on Foshan's manufacturing exports is self-evident.

Case 1 Xinguang knit has no profit and must endure.

Recently, Lu Mingkeng, chairman of Foshan Xinguang Knitting Co., Ltd. looked very helpless.

Almost all products used for export of textile enterprises, profit margins will be less and less, and now the dollar continues to depreciate.

In the past, exports were settled in US dollars, whether exported to Europe or exported to Japan or the United States. Now, Lu Ming Kai wants to call European or Japanese customers to settle euros or yen, but they are all rejected.

"At present, the company has no profit at all. It just keeps the company running."

The maximum cost of $1 is RMB 9.7 yuan.

"Foreign customers are very familiar with China's policies. They know that at that time, the state had export tax rebate policy for export enterprises and demanded that we give them rebates."

Foshan Xinguang Knitting Co., Ltd., formerly known as the first knitting factory of Foshan, was pformed into Foshan Xinguang Knitting Co., Ltd. in 1999. It has a history of more than 40 years.

The company has more than 1000 employees and a factory area of 40 thousand square meters, which plays a decisive role in the textile industry of Foshan. The products produced by the company are almost exclusively used for export.

"Our customers are major customers in the US, Japan and Europe. The price of our products is also up to the top grade, and each product can be sold for more than $15, but we still have no money to make."

Lu Mingkeng spent more than 20 years in Xinguang textile mill. He saw the former state-owned enterprise Foshan first knitting factory pformed into Xinguang knitting.

"The highest period of our export reached US $20 million, which was almost 1.8 billion yuan at that time," he said.

Lu Mingkeng said that at the peak of exports four or five years ago, a dollar could be exchanged for 9.7 yuan.

Lu Mingkeng disclosed that foreign customers are very familiar with China's policy. "At that time, the state had export tax rebates for our exports. They knew that when the exchange rate was 9.5 yuan, they would calculate the export tax rebate, saying that our exchange rate was actually 9.7 yuan, and then we had to ask them to rebate."

Customers who refuse to buy dollars do not buy it.

"Now it's a buyer's market. If we want to raise the price, they will go to other companies.

The company has no profit, but no layoffs.

Such a big factory, it is difficult to stop, it is more difficult to reopen. "

Last year, Xinguang knitted from the best sales of 20 million US dollars to 13 million US dollars, and it became much more reduced to RMB.

"Our enterprises are all export oriented. Unlike some enterprises, they have both domestic and export markets.

In the past, our exports were settled in US dollars, and now the US dollar has depreciated constantly, which has reduced our original profit margins almost to nothing, and many textile enterprises are losing money.

Lu Mingkeng said it was very passive now, although it also discussed with European and Japanese clients to settle accounts in euros or yen, but was eventually rejected by the other side.

"Now it's the buyer's market. If we want to raise the price, they can go to other companies.

Now the company has no profit, but it can not lay off workers. After all, unlike those small textile enterprises, it can be closed for half a year, and so on, and the market is slowing down. It is hard for us to make a big factory stop and reopen it harder.

Lu Mingkeng said, now their income is probably to maintain the operation of the company.

"In the past few years, the cost has increased by about 20%, but the price has increased by only about 3%.. Now the standards of hydropower, fuel, raw materials, recruitment cost and minimum wage are all rising, and prices are also rising. Now our business owners are the most passive."

Lu Mingkeng was rather helpless.

Cost of opening plant in Southeast Asia is reduced by two times.

"Many bosses went to Vietnam and Kampuchea for a visit some time ago, where the labor cost is only fifty or sixty dollars per month, which is almost less than our 1/3. here."

Lu Mingkeng told reporters that at present many small textile enterprises have been closed because they can't withstand pressure. "Some of them have changed careers to do other things. Some plan to shut down for half a year before looking at the market. They are few people, and it's easy to turn them off and open, but we can't."

"A few days ago, the provincial textile industry conference said that the profit margins of Guangdong's textile industry had slipped to 0.6%, and everyone was trying to figure out a way.

Many of the bosses I know have gone to Vietnam and Kampuchea for inspection. The cost of labor there is only fifty or sixty dollars per month, almost no 1/3. for us here. Lu Mingkeng did not plan to open factories in Vietnam or Kampuchea for the time being, because it was so chaotic that he planned to move to Xiqiao for development.

Lu Mingkeng said that although he is under great pressure, he will continue to support it.

Case 2 miss underwear quickly orders after receiving orders.

Let new customers open Euro pound account

"But the higher is not much higher. In the past, our export profits were about 15%, and up to 5% now, and many underwear enterprises do not even have profits."

Yantai is China's largest underwear production base, and Macy's underwear is one of the most representative enterprises.

Although there is a brand support, but for exports, the export manager of the enterprise Sun Jing confessed that it is difficult to do.

Sun Jing revealed that Macy underwear was 80% domestic and 20% used for export.

"We do not exclude exports now. We have customers' needs. We try to satisfy each other.

It will not refuse to accept US dollar orders as some underwear enterprises do.

Although we know that there is really no profit, all of them are old customers. We don't want to break up. After all, we have feelings.

Sun Jing disclosed that exports have been settled in US dollars, and now they are asked to switch to Euro or other currencies.

But for new customers, Sun Jing revealed, "script src=>"