Small And Medium Sized Textile Enterprises Struggle In Life And Death

Zhang Weizhong, the market leader of Haining Lida warp knitting department, most concerned about the work every day, in addition to looking for customers to take orders, that is, by tracking the latest developments in oil prices, because the price of oil is closely related to the profitability of warp knitting enterprises. "Seeing that the cost is higher every day, the pace of appreciation of the currency is accelerating, and our business is becoming more and more difficult to do," he said.

According to a recent survey, tens of thousands of small and medium-sized foreign trade enterprises in China are facing severe challenges.

From Guangdong, Zhejiang, Jiangsu, Liaoning, Sichuan, Hubei's six major export provinces, foreign trade research shows that about half of these enterprises have lost profits, and some enterprises have increased or even failed.

Recently interviewed textiles,

Rising cost is difficult.

Currently in commodities,

Zhang Weizhong has calculated an account. It is reported that the price of raw material from warp knitting has increased by 30% since last year, and this part of the cost pressure can only make the customer bear 20%, and the remaining 10% must digest itself.

In this way, the profit margins that had already been stretched were even worse. "Now we can only say that we barely maintain production."

He told reporters that the current situation of Haining warp knitting industry is very common, and even some individual enterprises are unable to get it.

"Another problem that bothers us is power rationing.

Every time the power point is closed, enterprises can only use their own diesel generators to generate electricity, so that the cost per kilowatt hour is 3 times that of the original.

Limiting electricity to electricity alone has increased our cost by 10%. "

Zhang Weizhong sighed.

It is reported that this year's power supply and demand situation in our province is extremely severe, and the seasonal and long period of power supply shortage is a foregone conclusion.

A company involved in PU leather products is also plagued by high price of resources.

The company responsible person said, PU leather raw materials, a considerable part of the oil extract, has risen 5% to 40%.

The experience of these two enterprises reflects the plight of quite a few foreign trade enterprises.

According to reports, over 80% of foreign trade enterprises have increased production costs.

Increase in non profitable enterprises

Wu Ying, director of the Department of foreign trade and economic cooperation of the Municipal Foreign Trade and Economic Cooperation Bureau, who recently concluded the Canton Fair, was impressed by the cost pressures faced by the enterprises.

She told reporters that in addition to oil and electricity, labor costs, financing costs and appreciation of the renminbi, a number of pressure superimposed on the export cost of enterprises increased by 10 to 20 percentage points.

During the current Canton Fair, the RMB exchange rate against the US dollar broke through 6.5 for the first time. The market department of an electrical appliance company in our city indicated that the RMB exchange rate would be reduced by about 16 thousand yuan, or about one hundred thousand yuan, and the profit of the company would be reduced by about 5% when the value of RMB rose by 1%.

In order to deal with exchange rate changes, enterprises have to raise prices frequently to compensate for the loss of profits, which may have an impact on orders.

According to the monitoring data of the Municipal Bureau of foreign trade and economic cooperation, the profits and profits of enterprises in the early part of this year accounted for 69.9%, although it was better than the average in the whole province, the situation is still grim.

The most direct impact of cost pressures on price increases is the decline in export competitiveness. Foreign customers are actively looking for alternative suppliers to pfer orders to other cheaper regions or countries.

"Judging from the turnover of the first phase of the Canton Fair, foreign purchasers are eager to take orders, but most of them are short and medium staple, and the profits of export enterprises are not high."

Wu Ying said that many enterprises dare not take long orders to avoid losses.

Tax refund can not survive? {page_break}

In April 22nd, the Ministry of Commerce issued the report on China's foreign trade situation (spring).

The report points out that the development of foreign trade enterprises is facing many difficulties and problems. The main factor is the rising cost of key elements, and the pressure on business continues to increase.

The report also said: "at present, the factors leading to higher commodity prices have not yet been alleviated, and some factors are still strengthening, which may push international commodity prices continue to rise or oscillate at a high level, especially in the Middle East. The turmoil is continuing, not only seriously interfering with local economic development, but also will continue to push up international oil prices."

According to reports, Wu Ying told reporters that different enterprises encounter different problems, some may be caused by exchange rate, some may be the pressure on the rising cost of raw materials, and may also be the problem of labor and energy consumption.

But in general, the import and export situation is complex in the future. Multiple factors will occupy the profits of enterprises in different degrees, and the pressure of cost faced by SMEs will be greater.

There were market rumors that the export tax rebate rate of some industries will be readjust again.

In this regard, the head of a textile enterprise in Haining said that if the tax rebate rate was lowered, we could only raise the price. If the customer could not accept it, he would have to pay less or not.

It is said that some enterprises in our city chose to stop production because they could not bear the pressure. Some foreign trade professionals also chose to switch careers.

People in the banking sector say that because of the large fluctuation of exchange rate, the enthusiasm of enterprises to use RMB settlement is increasing.

According to statistics, according to the statistics of Jiaxing central sub branch of the people's Bank of China, from March to 1 this year, the city has accumulated 131 RMB settlement accounts for cross-border trade, with a total value of 1 billion 810 million yuan, exceeding the total amount of 2010.

"At present, customers in Africa and Latin America are more willing to accept settlement in Renminbi, while European and American customers still need a process, which also involves convenience and habits. Foreign trade enterprises need to further communicate with each other."