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Textile Industry: Darkness Before Dawn

2008/8/9 17:09:00 31

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Textile Industry Environmental Deterioration Dormancy Period

Some textile enterprises enter "dormancy period"

"Many textile companies are now closed down, waiting for better conditions."

In July 25th, Zeng Xiang accepted the interview with "win weekly", and talked about the recent situation of textile industry.

"Now textile and garment enterprises gross profit is 10%, net profit in 3% ~ 5% is already very good, most enterprises do not make money or even lose money."

Zeng Xiang has been engaged in textile industry for more than 20 years in China, and his investment base is in Dongguan. But now he has led textile industry colleagues to set up an environmental protection textile industrial park in Henan. His textile experience includes Dongguan, Taiwan and the mainland, and he has been engaged in textile industry.

Because of its high position in the textile industry and the authority in the field of textile technology research, we call him "Zeng Ye".

As the first group of Hongkong people to invest in Dongguan, Guangdong, Zeng Xiang has been completely localized. He moved his family to Dongguan and bought a house near the company.

Most of the foreign investors investing in textile enterprises in Guangdong come from Hongkong and Taiwan. They are the first foreign-invested enterprises to invest in Guangdong.

Domestic export enterprises have undergone a big test of life and death.

Zeng Xiang's textile industry is currently a typical industry experiencing export difficulties and life and death struggles.

The beginning of printing and dyeing in Fu'an

Dongguan Fu'an textile printing and dyeing Co., Ltd., who had worked in Zeng Xiang, suddenly shut down this year because of its operational difficulties.

This is seen as an alarm for the textile industry.

In February 29th this year, Dongguan Fu'an dyeing and printing company, the world's largest cylinder knitted fabric producer and Hong Kong listed companies's largest subsidiary, 0420.HK, officially announced 3395 layoffs.

It is reported that Dongguan Fu'an dyeing and printing company has reached more than 7000 employees at its peak, and it has been reduced to more than 4000 before the large-scale layoffs.

After layoffs, only a few hundred workers are left.

In the letter of instructions from the Fu'an company to employees, the company explained: "due to the deterioration of the international economic situation, the continued appreciation of the RMB, the market downturn, the increasing cost of energy, the influence of the industry and other factors, the company started a sustained huge loss from the second half of last year. Although the company has worked hard to get rid of the plight, it has achieved little effect so far, and the company has already had serious difficulties in its production and operation."

Prior to that, the Fu'an printing and dyeing company had been investigated and punished by the local environmental protection department in June 2006 in the "environmental storm". It was punished by the local environmental protection department in June 2006. It was fined 210 thousand yuan by the Guangdong provincial Environmental Protection Bureau. At the same time, the Environmental Protection Bureau of the city recovered the company's sewage charge by about 11000000 yuan.

After the "environmental storm" and the textile industry's slack layoffs, Fu'an textile company was forced to close Dongguan Fu'an printing and dyeing and related departments.

The deterioration of the market environment is the most important reason for the closure of printing and dyeing in Fu'an.

The company's recession could be seen in the 2007 annual report of Futian group.

As of August 31, 2007, the company's turnover and net profit both fell, among which the shrinking of the overseas market caused by the US subprime mortgage crisis is one of the important reasons.

The proportion of the company's turnover in the Americas decreased from 11.4% in 2006 to 10.4% in 2007.

In its "performance outlook", the company showed a pessimistic attitude towards the US market.

The announcement said that although the retail sales report in the US Thanksgiving holiday was better than expected, many customers still indicated their concerns about the market in the coming year.

The conservative list of American retailers has had a negative impact.

Fu'an printing and dyeing industry is a well-known enterprise, since 1992, the company has repeatedly won the title of "China's top ten textile enterprises" and so on.

Its dilemma in production and operation is of some typical significance at present.

Reporters interviewed in the survey found that similar to Fu'an's printing and dyeing of such enterprises are not few.

In fact, such losses and failures are considered to be a common phenomenon in the industry.

As early as Dongguan Fu'an textile printing and dyeing company went bankrupt, Zeng Xiang went away from the position of general manager of Dongguan Fu'an textile printing and dyeing company in 2004.

He saw the inevitable fate of the enterprise very early.

The development mode of Fu'an's printing and dyeing represents the development mode of some textile industry in Guangdong. At the expense of environment and resources, it develops rapidly with low labor cost, preferential land and other local policies.

But this development mode is not acceptable to the market today, nor is Zeng Xiang willing to go any further.

After leaving Fu'an dyeing and printing, Zeng Xiang invested in the company.

He is trying to find a new road for the textile industry.

There are six unfavorable factors in one year.

"In the last two months, we are all hibernating, and businesses are afraid to take orders."

Zeng Xiang said.

The Beijing Olympic Games are approaching, but because cotton spinning is mainly concentrated in the cotton textile industry in Hebei and Beijing, Zeng Xiang has to stop in Henan's cotton mill in order to cope with the traffic and environmental regulation.

The textile industry can understand the pause caused by such a great and accidental factor.

Unfortunately, however, this contingency factor appeared five or six in one year.

This has made some textile enterprises simply unable to live.

Zeng Xiang said: "last year is the most difficult day for the textile industry. There are five or six unfavorable factors: RMB appreciation, export tax rebate reduction, raw material price increase, new labor contract law implementation, environmental protection restrictions, and the subprime mortgage crisis in the United States reducing international market demand."

Textile enterprises are most afraid of the people.