Why Do Textile And Garment Enterprises Transform?

Since 2008, the coastal textile and garment enterprises have been suffering from the pain caused by the financial crisis. Factors such as price rise of raw materials, sales volume reduction and labor cost increase have been superimposed. This forced textile and garment enterprises to consider how to effectively reduce production costs.

By 2009, China's economy began to steadily recover. But then the "labor shortage", "electricity panic" and "land use panic" in the eastern coastal areas have made the textile and garment enterprises unprepared. Therefore, the problem of "shifting" to the western region has become a hot topic in the textile and garment industry. The debate over whether the enterprise is "on the spot" or "westward" is becoming more and more serious. There is no doubt that textile and garment enterprises have to shoulder any severe labor pains, no matter which way they choose.

Textile enterprises: Xiangyang flower and wood are easy to spring.

In the late autumn of 2009, the common people who hurried to make quilts and cotton padded clothes all over the country found that cotton had risen in price. In fact, the rise of cotton prices is only a few complaints to most of the ordinary people, and the direct impact is not too big. However, for a large number of cotton mills, it is a very thorny problem. If the enterprise's ability to respond is not strong enough and the disposition effect is not obvious, the consequences may directly threaten the survival and death of a factory.

In fact, the price of cotton has started to rise slightly since the end of 2008. At that time, the price of cotton per ton fluctuated only about 200 yuan per ton. However, this situation has not attracted the attention of most cotton spinning enterprises. After years of persistent downturn in cotton prices, many cotton mills seem to have forgotten the law of cotton price fluctuations.

A cotton textile Co., Ltd. of Nantong, Jiangsu, was founded in the 90s of last century. At the most brilliant times, nearly 10000 workers were employed. It was after the baptism of the financial crisis that by 2008, the amount of cotton used by the company was about 10 thousand tons a year. According to convention, a cotton textile enterprise of this size should at least maintain the order of 1000 tons. However, in order to reduce the backlog of funds, we should avoid the pressure of cash flow. The cotton inventory of the company has been maintained at a scale of 200---300 tons for a long time.

After a slight rise in cotton prices, cotton prices rose sharply. By the middle of 2009, cotton prices had risen by 2500 yuan per tonne compared with the beginning of the year. But at this time, cotton spinning enterprises still have hope. That is to say, the price of cotton will come down after the new cotton comes into market in September. New cotton is listed as the last straw for cotton spinning enterprises.

However, the hope is often followed by disappointment. By the end of October 2009, the market price of cotton in Sichuan was 18 yuan per catty of Xinjiang velvet cotton and 19.8 yuan per catty of Xinjiang velvet cotton. Moreover, cotton transportation in Xinjiang is extremely inconvenient. By December, according to a survey of some enterprises, in the 130 thousand tons of new cotton that had been sold, 2/3 cotton could not be transported because of the tight wagon. Some companies claim that the cotton stored on the platform for nearly two months is still not available.

The two provinces of Jiangxi and Hunan are also important cotton producing areas in the mainland of China. Taking Hunan as an example, due to climate drought, 09 years of cotton planting area of 2 million 200 thousand mu, compared with 08 years reduced by 300 thousand mu, a decrease of 12.5%. In addition, a series of problems appeared in transgenic cotton, resulting in lower cotton production. At the same time, higher prices have caused the phenomenon of cotton farmers' reluctant sale.

How to do this? This has become the most direct problem facing cotton spinning enterprises.

The purchase of cotton from Xinjiang and transportation to Zhenjiang without train skin is as high as 1400 yuan per ton. This is obviously not feasible. In the textile industry, the situation has just started to pick up steadily, and the order of cotton spinning enterprises has just started to increase and profits have just begun to pick up. Cotton shortage, high cotton prices, transportation difficulties and other problems once again make cotton spinning enterprises miserable, and even to the situation of no rice.

It seems that no change can be done. Invariable means that China's cotton spinning enterprises, which "survive" in the wake of the financial turmoil, are likely to fall into a new abyss again. As a result, the transfer of enterprises is undoubtedly on the agenda. Cotton spinning enterprises go to the cotton area, which not only saves transportation costs, but also enjoys local preferential policies, as well as cheap labor relative to coastal areas. All these factors hide great temptation.

Decisive, the enterprise executives finally clash. Enterprises must be transferred to Jiangxi, Jiujiang. Jiujiang is the main cotton producing area in Jiangxi province. The cotton planting area accounts for 2/3 of the whole province, and the annual output of cotton is about 1 million 800 thousand. Jiujiang is located in the northern part of Jiangxi, at the junction of four provinces of Jiangxi, Hubei, Hunan and Anhui. It is also the intersection point between the Beijing Kowloon Railway and the Wanli Yangtze River. What is even more difficult is that Jiujiang is the only port opening city in Jiangxi.

After the transfer of cotton mill to cotton area, the above advantages have partly solved the impact of rising cotton prices on enterprises. The average wage of workers is 20% lower than that of Zhenjiang, and the rent of factory buildings is half of that. Besides, there are much less expenses for utilities and so on. This undoubtedly brings direct economic benefits to textile enterprises, and improves the survival and competitiveness of enterprises.

At present, Jiangxi, Hunan, Hubei, Henan, Xinjiang and other provinces and autonomous regions have become the main destinations for the transfer of textile enterprises. However, it is worth our consideration. At present, the major shift in the textile industry is still the manufacturing sector with relatively low technology content.

Clothing enterprises: to say that the dream is still gone.

The impact of the financial crisis on our garment enterprises is also very serious. Overseas orders fell sharply and export volumes plummeted, becoming the "external difficulties" of garment industry in 2008. After entering 2009, China's economy began to pick up. But in this post financial crisis era, labor shortage, rising labor costs and increasing logistics costs have undoubtedly become the "internal worries" of the garment industry.

In October 2008, a heavy rain continued for several days in Dongguan, Guangdong. On the streets, with the most floating water, there is a bright red notice for recruiters. Close to work in the afternoon, there are few workers coming out of all the factories along the street. 00 scattered walking on the road, not in crowds. This rainstorm seems to have washed away the usual hustle and bustle of Dongguan. Dongguan, known as the "world factory", is one of the central cities of the manufacturing industry in southern China. Such a cold and cheerless situation in the area is quite abnormal. From the end of 2008, a large area of "employment panic" began to spread in the Pearl River Delta region. At the time of the financial crisis, garment enterprises could not get orders except for a small part of their technical backbone, so they had to lay off a large number of ordinary workers. By the time the economy began to pick up, the labor-intensive clothing enterprises suddenly found that the workers were gone.

In fact, the structural change of migrant workers has made the emergence of "labor shortage" become inevitable. With the gradual growth of the first generation of migrant workers, more post-80s and even 90 entered the industry of migrant workers, and became the main force of this group. These people are quite different from their parents in terms of outlook on life and values. The younger generation of migrant workers pay more attention to enjoyment, consumption and more urbanized lifestyles. It has been reported that "80 generations of migrant workers are the only child generation, and are protected by a lot of families". In fact, this is not accurate. At present, the families of only children in rural areas are still rare, and the situation of unplanned childbearing is very common.

However, some garment enterprises are not careful enough to deal with the problem of the treatment of migrant workers. According to the National Bureau of Statistics survey, the average monthly wage of migrant workers in 2009 is 1417 yuan. The number of migrant workers who work more than 44 hours per week is 89.8%. At the same time, nearly 60% migrant workers have not signed labor contracts, and the level of social insurance participation is generally low. The proportion of employers or units for migrant workers to pay old-age insurance, work-related injury insurance and medical insurance is also low. In addition, some of the migrant workers who were laid off during the financial crisis brought their own savings back home to start their own businesses. So this part of the migrant workers has completely changed their identity and will not go out to work anymore. Combined with the above situation, it is easy to see the root cause of "labor shortage".

The costumes of the coastal generation are suffering from "labor shortage". There are no workers, there are orders to be afraid to receive; no workers, orders can not be delivered on time. As a result, garment processing enterprises began to prepare for the transfer after seeing the changes brought about by the transfer of textile enterprises. However, in our country's reform and opening up across the river, it is time to go deep into the deep water. Garment processing enterprises feel the stone of textile enterprises, can they cross their own river successfully? The answer is No. This stone is neither rock nor river.

A casual clothing manufacturer in Zhongshan, Guangdong, should shift the way to deal with "labor shortage". They settled on an economic and Technological Development Zone around a provincial capital city in Southwest China. Of course, in order to win this business, the government has given preferential treatment in terms of policies, land and supporting facilities. In fact, in view of the tidal wave of coastal garment processing enterprises, Henan, Sichuan, Chongqing, Jiangxi and other provinces are all eager to hold investment promotion meetings, and invite coastal enterprises to build factories locally.

After the commissioning of the garment processing plant in Zhongshan, a series of unexpected problems began to appear in front of the enterprises. The first trouble is the purchasing department of an enterprise. Once, in order to find a button on the top of a garment cuff. Several people in the purchasing department almost ran around the counties and cities, nor did they find the right manufacturers. Finally, it had to be purchased from Guangdong and shipped to the enterprise again.

As a result, the cost of clothing is almost the same as that in Guangdong. Then, the high transportation cost of finished products is also choking the enterprise. As we all know, the operation of IT industry transfer production base is very successful. Why? Because of their products, a container is worth millions or tens of millions. Therefore, a little logistics cost is negligible in their eyes. However, for our garment processing enterprises, a container has more than a hundred thousand or hundreds of thousands of clothes. In the light of the low profit margin of garment industry, the transportation cost is very important.

The apparel industry is still the main way before the domestic market is completely completed. Transporting products from distant inland to coastal ports is undoubtedly the price of tofu meat. Before the transfer of garment processing industry has been transferred, the transfer of simple garment enterprises is doomed to failure.

Thinking back then, some coastal garment processing enterprises went to Vietnam, Kampuchea and other Southeast Asian countries to build factories. The main reason is, "in China, it will cost 1000 yuan to invite a worker who is not very skilled, and only 500 yuan can be used in Vietnam." However, it was not long before these companies were losing. The reason is that these countries do not have the industrial chain needed by the garment processing enterprises. Zippers, buttons and so on all need to be shipped from the mainland. Can such a production environment enterprise have a better life?

At present, the shift of Chinese clothing enterprises to the central and western regions and the construction of factories in Southeast Asia in those years are almost the same. After more than 20 years of development, it is no exaggeration to say that the most perfect textile and garment industry chain in the world is on the coast of China. There are many specialties in the art industry, and it is common to produce one kind of accessories in a town along the coast. There have been fears that Southeast Asian countries will replace our country's garment processing industry with cheap labor. In fact, this situation will not happen in a short time. It will take a long time to run a complete industrial chain.

At present, some coastal garment enterprises are preparing for transfer. Some of the enterprises that have already moved back to the coast quietly. It is beyond reproach that only when the overall transfer of the apparel industry chain is realized, can the garment processing enterprises transfer enough stamina to succeed.

Go or stay: act according to circumstances, and change power with power.

In the late 80s of last century, the same situation faced by the textile and garment industry also appeared in Taiwan. At that time, the younger generation in Taiwan began to be reluctant to work in factories because of the improvement of their living conditions. The shortage of labor led to the rapid rise in labor costs and other costs. Faced with such a situation, most enterprises in Taiwan choose to transfer to the mainland with low labor force. In fact, since the last century, European and American countries have transferred to Japan, Korea, Singapore, Taiwan, Hongkong and other countries and regions because of rising costs, and then transferred to mainland China for the two time.

Therefore, the transfer of part of the textile and garment enterprises is already in the firing line. Of course, for the coastal textile and garment enterprises in the domestic market, it is advisable to transfer the production line to the central and western regions, and the possibility of success is also great. However, for the textile and garment enterprises which are mainly exported, the high transportation cost is unbearable. I am afraid that staying on the coast is the best choice.

Whether to stay or stay, it requires enterprises to rationalize their transformation. In order to get rid of the higher cost left on the coast, textile and garment enterprises must improve production efficiency, labor quality, automation level, production technology, product quality and added value of products. Throughout history, it is easy to see that any change or crisis is hidden behind great opportunities. The textile and garment enterprises left behind can take the opportunity to improve the quality and grade of their products. Create their own brand and make the world completely changed. China is the "world garment factory" concept. Make Chinese production into China, and strive to make China's textile and apparel occupy a place in the world's high-end clothing market at an early date.

Whether the textile and garment enterprises are going or staying, actually represents a trend of development, representing the way to make China's textile and garment industry bigger, stronger and better. Under the new situation, China's textile and garment enterprises must also have new wisdom and spirit, and need new responsibilities and responsibilities. Our textile and garment enterprises must have the global market concept, product quality concept and technological innovation consciousness, and develop towards the specialization of industries and the refinement of products. It is undeniable that our textile and garment enterprises are facing such an indisputable fact. With the rapid development of China's economy, some traditional advantages of Chinese textile and garment enterprises are gradually disappearing. In a rapidly changing environment, how to make a textile and garment enterprise achieve a quality centered product management, a financial based management and a technology based management framework with Chinese characteristics is worthy of our consideration.