Leap Group: Labor Pains On The Road Of Sewing Machine Power

On the road to success, there will not always be flowers and applause, occasionally accompanied by thorns and frustrations.

This is an old saying that it is more appropriate to describe the current situation of sewing machinery industry in China at this moment.

After many years of rapid development, the world is sewing machine manufacturing power to a powerful country.

On the road to success, there will not always be flowers and applause, occasionally accompanied by thorns and frustrations.

This is an old saying that it is more appropriate to describe the current situation of sewing machinery industry in China at this moment.

After many years of rapid development, China Sewing machine industry, which is changing from the world sewing machine manufacturing power to the powerful nation, is suffering from the pains that must be experienced in the process of growth.

Since the second half of 2007, China's sewing machinery industry has completed its rapid development in the past few years and entered an industrial adjustment period.

According to the statistics released recently by China Sewing Machinery Association, the total output value of the industry has decreased significantly compared with the same period in previous years, and the situation that the market is not optimistic has brought great pressure to the operation of Chinese sewing machine enterprises.

Enterprise pain

A few days ago, a piece of news about the difficulty in running the private enterprise Leapfrog Group was reported by many media, which aroused widespread concern of all sectors of society.

For a while, everyone was guessing.

The large backbone enterprise of the domestic sewing machine industry, founded in 1986, has the capability of producing about 5000000 sets of sewing equipment annually. Its industrial sewing machines export to more than 120 countries and regions, and has been in the first place in the same industry export volume and foreign exchange earning for many years.

It has created a lot of experience in technological innovation, market expansion, talent strategy and brand building for the development of the industry. It can be said that the largest sewing machine export and production base in China.

But it is such a sewing machine enterprise, but in a few months ago, the chain of funds came out.

In order to understand the real situation, reporters and the Chinese sewing machinery association secretary general Yang Xiaojing has been contacted.

He said: "flying group has a very important role in promoting the development of China's sewing machinery industry, especially in the local sewing machine enterprises, and its driving role is even more significant.

The association has maintained close ties with the leaps and bounds. The current production and operation of enterprises is normal, and the difficulties they encounter are temporary. They are not so outlandish as the outside world.

Subsequently, a senior official of a leap Group was asked to reply. "The development of any enterprise can not be smooth sailing. I did not expect that the temporary difficulties of this leap should be noticed by so many people.

In our view, this is just the difficulties encountered in the course of the development of enterprises, and it is not terrible. We can overcome them through positive responses.

It is understood that at present, the difficulties faced by the leap Group are mainly two aspects: first, the impact of domestic and international macro environment, manufacturing costs continue to rise, the profit margins are squeezed, the downstream textile and garment industry has insufficient demand for sewing equipment, and the scale of production and marketing has dropped to a certain extent; two, in recent years, the leap has been invested in promoting product upgrading and market channel construction, and the output period has not yet arrived, and is also subject to tight monetary policy, resulting in greater pressure on the liquidity of enterprises.

As a local star private enterprise in Taizhou, Zhejiang, the group has encountered great difficulties and has attracted the attention of local governments.

Since April of this year, three levels of governments in Zhejiang, Taizhou and Jiaojiang have issued specific measures to help the group leap through difficulties.

Through government coordination, the loan banks of Leapfrog Group have reached an agreement to support enterprise development and do not contract loans.

According to this leap high level introduction, the banks that cooperate with the leap believe that the strength of the leap brand is obvious to all, and is also confident of its future development.

In addition, the supporting enterprises and customers at home and abroad who have business with leaps and bounds have also given strong support.

Their "confidence" comes from the research results of the relevant departments of Zhejiang Province: the group's current assets size is 2 billion 400 million yuan, still far greater than liabilities (by the end of May this year, its bank loan balance is 890 million yuan), and its 5 series products range from gross profit to 9.1% to 29%. The brand influence at home and abroad is relatively large, and has a good market prospect.

Therefore, the difficulty of Leapfrog Group is temporary.

In Zhejiang, Taizhou and Jiaojiang, three levels of government and related banks and enterprises are working together to cope with difficulties and formulate strategies to overcome difficulties.

Yang Xiaojing, Secretary General of the Sino Russian sewing Association, told reporters that the group has already launched the "downsizing plan", including expanding the production capacity of high value-added and high profit space products, reducing production or stopping the production of small profits, and disposing assets which are not related to the main business.

By the time of press release, the group's production and operation order is normal.

Source of labor pains

However, the current sewing machine enterprises are not only a leap.

As one of the key enterprises in China's sewing machinery industry, ZOJE, in its announcement of the first quarter of this year, shows that the company's profits have also declined considerably.

According to the standard, facing the macroeconomic situation of RMB appreciation, the export tax rebate rate of textile and garment industry and the rising labor cost, the demand for sewing equipment in textile and garment industry has been reduced.

In the first quarter of 2008, compared with the same period last year, the sales volume of the standard products in the domestic market decreased, and the net profit decreased by 91.58%.

Similarly, ZOJE's total revenue declined by 38.27%, and net profit fell by 78.6%.

In addition to the reasons for appeal, the export rebate rate of industrial sewing machines and the continued appreciation of the renminbi have led to an increase in the cost of export of sewing equipment industry and a rise in exchange losses. As well as the continuous rise in raw material prices, production costs have increased considerably compared with the same period last year, which is also a major reason leading to a decline in the profitability of the company's products.

Tien Min Yu, associate director of the Sino Japanese Union, pointed out that this year's situation is grim, because the industry has entered the period of adjustment and pformation under the superposition of the two adjustments.

At present, the problems of some enterprises should be normal.

Through this round of adjustment and pformation of the whole industry, the "internal strength" of enterprises will be stronger.

Generally speaking, it is the peak season for sewing machine market at the beginning of each year, but this year the market is generally "cold".

However, reporters learned that even in the face of the current situation of the domestic sewing machine market which is not optimistic, Chinese sewing machine enterprises still have full confidence in this market, and are also taking positive actions to play their own business advantages.

It is understood that in addition to leaps and bounds to the "slimming plan" to deal with the current situation, MAQI, and other enterprises began to actively expand overseas markets, Zhong Sen said that it will still play its own advantages in the field of special machines, and gem, Jack and other other industries backbone enterprises said that the overall direction of development of China's sewing machinery industry will be dominated by high-tech, automation products, and the company will follow the principle of innovation and development, and products will continue to bring forth new ideas and take the road of high quality.

The pain is only temporary.

For Chinese sewing machine enterprises, confidence is also important besides active adjustment and active response.