Hebei Textile Enterprises Are Facing Urgent Needs Of Life And Death.

In the difficult period of the national textile industry, Hebei textile enterprises, mainly cotton spinning, yarn spinning and other primary products processing, entered the "life and death period".

The Hebei Textile Industry Association recently released the "2008 Hebei textile industry first quarter operation analysis report" (hereinafter referred to as the "report") shows that the first quarter of Hebei textile enterprises losses increased by 60%. Most small textile enterprises "reduced orders" volume dropped by more than 50%, and some enterprises even appeared "zero order" in the first quarter.

"Report" shows that large textile enterprises are in "zero profit" and "half loss" state, and small and medium-sized textile enterprises are entering the "death period".

Hebei textile enterprises said that the report on the survival of textile enterprises submitted by the China Textile Industry Association has been reported to the State Council, and the relevant ministries and commissions are discussing the specific plans.

"The most difficult period"

"Report" pointed out that, because Hebei's textile products are mainly low-grade products, large quantities of cotton cloth and cotton billets are sold, and bargaining power is poor. They have been in the extreme position of falling prices and rising costs. Therefore, textile exports in the first quarter and the decline in the efficiency of domestic textile enterprises have all affected Hebei's textile industry.

Because a large number of clothing products "export to domestic sales", resulting in domestic clothing and cotton products and other products price disorder competition, for Hebei's textile enterprises, it is "raw materials rise, product prices do not rise." Up to the beginning of May, the inventory of cotton and cotton stock produced by Hebei textile enterprises has reached one month's production volume.

This makes the financial situation of textile enterprises that rely on fast selling products to achieve liquidity in a tight monetary environment.

Textile enterprises are mostly small and medium enterprises, and they do not belong to the scope of bank loans. Therefore, the starting conditions of Hebei textile enterprises are not optimistic this year.

"On the one hand, textile enterprises lack liquidity and are forced to stop working. On the other hand, banks do not have good projects to lend, and they hold their money in their hands." A Hebei Federation of Commerce and industry revealed that many small and medium-sized textile enterprises in Hebei Shunping County, a bank, only 10 million yuan in the hands of the loan amount, but last year did not let go.

About 2/3 of the products produced by Hebei textile enterprises are exported directly or indirectly. Shijiazhuang customs data show that the export volume of textiles and clothing in Hebei in the first quarter of this year Five point six Textile exports amounted to US $400 million, an increase of 17%.

Shijiazhuang customs officials said that in the first quarter of this year, Hebei textile products picked up slightly because of the abolition of the quota restrictions on textiles exported to the EU, while most of Hebei's products were exported to the European Union. Therefore, a small increase in textile exports in the first quarter is a resumption of inflation. The two quarter textile export situation is not so optimistic.

Meanwhile, Hebei textile exports to the US increased only in the first quarter. 12.5% This is a marked decline compared with the same period last year.

According to the "report" analysis, influenced by the subprime mortgage crisis in the US, the consumption reduction in the US and the reduction of orders for textile consumption in China have greatly affected the main export direction of textiles in Hebei.

In addition to the drop in exports, rising costs and unsalable products are the main factors that affect the efficiency of Hebei textile enterprises. A Hebei medium-sized cotton spinning enterprise official told reporters, the domestic textile consumption power obviously no big abroad, since last year textile export blocked problem, the domestic textile consumer market has not played the role of undertaking capacity. Most of the products of textile enterprises are hoarding and unsalable.

RMB appreciation: profit shrank

The appreciation of the Renminbi made Hebei textile enterprises lose most of their profits in the first quarter. In March this year, the appreciation rate of RMB reached a single month. 1.31% The cumulative appreciation reached the first three months. 4.15% This is much higher than the same period last year. In April 10th, the central parity of the RMB against the US dollar broke 7 for the first time, compared with the RMB against the US dollar before the 2005 reform. Eight point two seven six five 1, the renminbi has appreciated more than 18% against the US dollar.

Hebei textile industry association responsible person told reporters that every appreciation of the renminbi point, Hebei textile enterprises profits fell by 2%-6% points, the current average profit margin of Hebei textile industry is below zero.

In the "report", it was pointed out that Hebei's printing and dyeing enterprise Mingshi printing and dyeing factory lost 10 million yuan in RMB appreciation in 2007. Because of RMB appreciation, cotton price rise, printing and dyeing materials rising, energy price rising and other factors, the company made a loss of 4 million 260 thousand yuan in the first quarter, compared with 1 million 890 thousand yuan in the same period last year.

Ma Yunjie, deputy general manager of Hebei textile and Limited by Share Ltd, a large textile enterprise in Changshan, told reporters that this is the most painful year for the 22 years since he entered the textile industry. This year is bound to be the industry shuffling period, and Hebei textile enterprises lacking in product competitive advantages will be more difficult in this round of competition.

Ma Yunjie pointed out that the number of textile practitioners in Hebei was about 1 million 400 thousand, and that of the whole country was about 20 million. In the period of industrial transformation, the problem of employment difficulty was also prominent. The transformation of textile industry needs to consider 20 million workers' employment problem.

The report also reminds Hebei textile enterprises that this year will be the most difficult period for Hebei's textile industry to operate for 20 years. Companies need to have a full understanding of this situation.

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