Garment Industry Revival Drives Sewing Machine Industry

Since the beginning of this year, the garment industry's rebound seems to have been confirmed by the strength of the upstream sewing equipment industry. Due to the rapid growth of orders, the domestic sewing equipment industry is facing a shortage of labor. Some news sources say that at present, the existing capacity of domestic sewing machine manufacturers can no longer satisfy the garment enterprises that are eager to purchase new production equipment, and even individual sewing machine manufacturers have completed the whole year's sales in the first 4 months of this year.

For a long time, the prosperity index of domestic garment industry will be reflected in the upstream sewing equipment industry. Whenever the crisis is coming or the recovery is strong, the upgrading of production equipment will become an important consideration for garment manufacturers to control costs or expand.

Earlier, the global financial crisis spread to the early days of the country, which made China's sewing equipment industry fall into a "declining trend". Thus, at the moment when the domestic sewing equipment industry is booming, the strong growth of the upstream industry has also attracted the attention of the industry to the overall development trend of the garment industry.

Small orders support strong recovery

Tongyu holding group is an old manufacturer of sewing machines in China. It is located in Taizhou, Zhejiang, which is an important sewing equipment industry cluster in China and even in the world. As an enterprise with an annual output value of over 100 million yuan as a domestic sewing equipment industry, Tongyu has witnessed the strong growth momentum of the sewing equipment industry since 2010.

"Of course, those claims that the sales in the first quarter of 2010 increased by one or two times were exaggerated. I believe that in the first 4 months of this year, there will be very few enterprises that can complete last year's sales, because after all, we are still in the post crisis era, and the revival of the garment industry has a process." Yang Junbin, assistant director of Tongyu holding group, said, "but this year, the overall warming of the domestic garment industry is certain. The whole market is obviously recovering. For example, our orders in the first 4 months have increased by 30% compared with the previous year, and the whole industry in our industry, including us, is generally unable to meet orders."

For Tongyu, entering the 2010, the downstream garment industry showed different "weather" in the past, and orders kept coming and full of vitality. According to Tong Yu's introduction, many of the current orders come from garment factories that have not upgraded their equipment in some years but have had to upgrade their equipment. These garment factories have postponed the upgrading of equipment due to the global financial crisis, and their rigid requirements have been fully reflected when the situation has improved.

The main direction of these "rigid demands" is the high-tech equipment, such as oil-free, low noise, direct drive and other types of equipment, showing the garment industry's demand for equipment and process upgrading. However, such an attempt also has obvious tentative meaning.

"At present, the most difficult time of the clothing industry has passed, but the clothing factories are very cautious. If they do not have the demand for technological transformation, they will not update the equipment. And even if there is a need for technological transformation, they are unwilling to take it one step at a time. They still want to try the effect in small batch, and do not want to invest more because of the security of cash flow. Yang Junbin said.

According to the statistics of Tongyu's orders in 2010, most of them received small orders, and the capacity of orders was generally around 50 sewing machines. This shows that, on the one hand, under the situation that the clothing market is still not completely clear, it is more likely to try "production and renewal" first. On the other hand, it also confirms the new "adjustment" in the field of clothing production from the side. With regard to the momentum of recovery this year, the China Sewing Machinery Association has pointed out that an important factor that has contributed to the increase of orders in this period is that large garment companies have subcontracted clothing orders to small garment factories in the field of garment production, which directly stimulated the demand for production equipment of small garment factories.

However, with regard to the reality of orders placed by the companies, Yang Junbin also has his own concerns. He doubts that this growth is not the result of the "full improvement" of the clothing market, but also the other "non market" factors.

"As a result of all small orders, we believe that this may also be the result of a large number of individuals forced to start their businesses in recent years. We are worried that many enterprises or individuals will launch the clothing items for the purpose of keeping the value of idle funds out of inflation expectations. After all, clothing factories and sewing facilities have a certain value preservation effect. Making clothes is more secure than the investment which has been relatively hot, and it will be more secure and will not lose. Some individual clothing stores are also beginning to purchase sewing machines. Of course, the quantity they purchase is calculated in terms of digits. Yang Junbin said, "in a word, like hundreds of sewing machines in previous years, tens of millions of dollars worth of orders, now you can hardly see."

The changing rules of the game are accompanied by the strong growth of the domestic sewing equipment industry in 2010, as well as the embarrassment of the shortage of sewing machine manufacturers.

This has almost become a problem of the whole industry. Its "attack" is largely due to the "sequela" under the impact of the global financial crisis, not just the revival of the clothing market at the moment.

Looking at the history of the production of industrial sewing machines in China, around 2005, it was considered to be the largest production period of industrial sewing machines in China. Despite the gratifying growth in the sales of sewing machines this year, there is still no indication that the "potential" that the sewing machine has shown so far can exceed that of 2005.

This means that the demand for new equipment in garment industry is not "out of control". At the same time, it also shows that the capacity base of the past should not cause such a large-scale and large-scale capacity shortage.

There are also other factors that have led to the current productivity plight of the sewing equipment industry. In fact, the main obstacle to rapidly increasing the capacity of sewing equipment industry is the shortage of basic components, which makes the whole machine manufacturers spend a lot of time looking for goods, which limits the production capacity. This is also known by Yang Junbin as the partial fracture of the industrial chain.

"Any sewing machine we manufacture now, even if it is counted according to the cm2 per square meter, requires a large number of components, far exceeding the parts of the mechanical product area such as automobiles." Yang Junbin said, "let's not see how much money these components are worth. Some of them are only a few cents each, but less than one such component can not produce a complete machine. As a result, a large number of parts and components enterprises have failed to switch production, resulting in a serious shortage of many parts and components. At present, the whole enterprise is just trying to find a kind of spare parts and run around the whole city of Taizhou, and even the whole Zhejiang province is not necessarily able to harvest. 　　

The gap between parts and components has led to a sharp decline in the production capacity of sewing machines. In such a "gap" situation, the status of sewing equipment parts enterprises has increased rapidly.

At present, the rest of the domestic sewing machine parts enterprises sweep away the market saturation of previous years, and they are faced with the image of "cowardly" in front of the whole machine company. According to the current "rules of the game", not only the sewing equipment parts enterprises only accept cash spot transactions, let the past credit history, and at the same time, spare parts enterprises also enjoy the "stationed" treatment of sewing machine enterprises.

"Before, the boss of the whole machine company looked down on the parts enterprises. They always felt that they were not big enough. They were all small bosses. This year, the situation is different. The boss of the whole machine company is going to visit the parts enterprises one by one. The present situation is that if the whole enterprise does not go to the "small boss" of the parts enterprises, it will give cash and no spare parts products if they do not eat or visit. After doing this, in order to really get parts and components, the whole machine company also arranges someone to "assemble" parts enterprises and watch them produce a product and take a product. Yang Junbin said.

The shortage of sewing machine and equipment workers caused by the difficult situation in the past few years is also the reason for the rapid increase of sewing machine production capacity.

At the beginning of the global financial crisis, sewing machine manufacturers had largely reduced the number of skilled workers because of the sharp shrinkage of the market. After leaving the sewing machine business, most of these workers left the industry. They either went to the garment factory or entered the service industry or worked in other kinds of work.

When the market started to pick up and the sewing machine manufacturers began to recruit, most of the workers who were forced to leave were no longer willing to return to the poorly paid sewing equipment industry. Therefore, sewing machine manufacturers had to use inexperienced workers, which limited the production efficiency of the sewing machine enterprises.

　　市場復蘇有反復

The deep problem of an industry that plagued sewing equipment industry is that the industry is too small, resulting in low risk tolerance. A slight change in the garment industry can create great waves in the industry. When the clothing market is in a "declining trend", a large number of sewing equipment enterprises will be trapped in the plight of survival. When the garment industry is "slightly warmer", the sewing equipment industry may have insufficient capacity, and after that, it will haste to increase production capacity and lead to a decline in product quality.

According to a ridicule widely spread in the sewing equipment industry, the reform and opening up has been summarized as "sewing machine equipment industry with three ups and three falls". Even if the sales of the best sales in the past year are all owned by one enterprise, the enterprise can not make the top 500 in the world.

According to the "11th Five-Year development plan" of China's sewing machinery industry before the global financial crisis, the target value of China's sewing equipment industry in 2010 was only 60 billion yuan.

This constitutes the reality of the sewing equipment industry. The limited scale results in the lack of industrial compression capacity, which leads to frequent ups and downs of the industry. It also enables enterprises with a slightly larger scale in the industry to seek diversification so as to enhance their profitability and risk tolerance capabilities. Whether it is ZOJE, Jack, standard, or the second tier companies such as Shang Bei, Tong Yu, and even "middle class" Hui Bao, these enterprises have invested heavily in other industries, and the output value of many enterprises in other industries has surpassed that of sewing equipment industry. This reality is also reflected in the global sewing equipment giant, such as the Japanese sewing machine business, which is still one of the dominator of the global sewing machine market. The sewing machine business of the company occupies a relatively minor position in the total business of the company, accounting for only about 12% of the total business.

The reality of the sewing equipment industry is also reflected in the current capacity shortage due to the revival of the garment market.

First of all, it may magnify the resurgence of the clothing industry. Although the sewing equipment industry is in an extremely busy situation at present, a large number of enterprises including Jack and Tongyu are busy with production and expansion of production capacity. However, our reporter interviewed 4 mainstream large enterprises in the clothing industry, and the reply was still cautious and wait-and-see.

Based on the textile and garment business, Fu run holding group claims that the recovery of garment industry has not made any breakthrough in 2010. Zhao Linzhong, chairman of the board of directors of the group, told reporters that despite the fact that the clothing industry was getting warmer, it did not seem obvious to him. Therefore, 2010 was a year of wait-and-see. "We do not plan to invest heavily in this year."

The total sales volume is 100 billion yuan, at the same time, it is also an important participant in global clothing distribution, wholesale and import and export trade. Hongkong Lifeng group recently also felt the market setbacks. Zhang Jiamin, director of the group, told the newspaper that despite the successful completion of the order this year, however, in the past few weeks, European orders have also seen twists and turns in the past few weeks due to the bankruptcy crisis in several European countries. Secondly, after a wave of recovery, the sewing equipment industry was slow to respond to the constraints of industrial reality. "Crisis" destroyed the steady development of the whole industrial chain, and quickly presented the reality of insufficient production capacity. What is even worse is that in order to make up for the shortage of capacity and rapidly expand production capacity, domestic sewing equipment enterprises are now facing the current situation of sacrificing quality and rapidly increasing production capacity and seeking short-term profits.

"Since the beginning of this year, some garment enterprises that have purchased sewing machines in China have suffered some quality defects." Yang Junbin said, "many of these problems are caused by objective reasons. For example, the problem of parts and components, many parts and components enterprises after the global financial crisis, the original production mold can no longer be used, the need to re open the mold, and the new mold production products are not up to the previous quality standards. At the same time, in the whole equipment system, because workers are novice, and in order to rush to make orders, more or less ignore some product quality.

At present, the clothing market in China is getting warmer and warmer, but the development prospect is still considered by many practitioners to be observed. Sewing equipment industry is already in the "excitement". For domestic sewing equipment enterprises, how to reduce volatility has become the key to development and maturity. However, this needs more progress in the whole industry chain.