Development Path Of Domestic Textile Enterprises Under High Cost

In the first quarter of this year, China's textile industry continued to maintain steady growth, the output of its main products increased steadily, and the profits of the industry increased significantly. In March, textile and clothing exports rebounded strongly, and achieved a super expected growth.

However, behind the bright data, the textile industry is still facing many hidden worries. Under the influence of high price of raw materials, rising labor costs, appreciation of RMB, and international environmental turbulence, the textile industry has entered a "high cost" era, and the export environment has become increasingly severe. The price increase or the main engine of China's textile and clothing export growth this year, the annual export growth rate is expected to fall to around 15%.

A running data

The first quarter added value increased by 10.4% compared with the same period last year, and the domestic market was thriving.

Industry profit growth

According to the statistics released by the Ministry of industry and commerce, the added value of China's textile industry increased by 10.4% over the first quarter of this year, down 3 percentage points from the same period last year, down 1.2 percentage points from the fourth quarter of last year.

Judging from the output of the main products, the yarn output in the first quarter reached 6 million 180 thousand tons, an increase of 12.5% over the same period last year, and the output of cloth was 13 billion 300 million meters, an increase of 19.9% compared with the same period last year. The output of clothing was 5 billion 360 million, an increase of 14.6% over the same period last year. In the first two months of this year, the textile industry realized a total profit of 34 billion yuan, an increase of 57.7% over the same period last year. The deficit of enterprises was 15.1%, and the deficit of loss making enterprises reached 2 billion 930 million yuan, down 0.3% compared to the same period last year.

According to the industry, in the first two months of this year, textile industry The profit was 18 billion 500 million yuan, an increase of 50.5% compared with the same period last year. fibre The manufacturing industry achieved a profit of 10 billion 100 million yuan, an increase of 46.1% over the same period last year, a profit of 5 billion 380 million yuan in the chemical fiber manufacturing industry, an increase of 1.3 times compared to the same period last year, and a total profit of textile machinery enterprises above designated size was 662 million yuan, with a profit margin of 4.96%, the latter only 0.95 times the average level of the textile industry.

Judging from the operation of listed clothing companies, the net profit of Hinur (002485, stock bar) belonging to shareholders of listed companies is 29 million 840 thousand ~3482 yuan in the first quarter of this year, a substantial increase of 80%~110% over the same period last year, while Semir apparel (002563, stock bar) completed 30.2% and 27.8% growth in business income and profit respectively in the first quarter.

Exports increased by 50% in March.

According to the latest data released by the State General Administration of customs, China's textile and apparel exports totaled 48 billion 627 million US dollars in the first quarter of this year, an increase of 24% over the same period last year, and the growth rate was significantly higher than the 13.56% in the first two months. Among them, Textile exports 20 billion 165 million US dollars, an increase of 32.7% over the same period, and exports of clothing and accessories reached US $28 billion 460 million, an increase of 18.4% over the same period last year.

In the same period, the textile industry completed export delivery value of 184 billion 100 million yuan, an increase of 22.3% over the same period, and the growth rate was accelerated by 8.3 percentage points. According to customs statistics, exports of textiles, clothing and footwear were 20 billion 200 million, 28 billion 500 million and 8 billion 830 million US dollars in the first quarter, up 32.7%, 18.4% and 21.6%, respectively. The exports of furniture, bags and plastic products reached 8 billion 430 million, 4 billion 270 million and 4 billion 560 million dollars, up 19.3%, 40.9% and 40.9%, respectively.

From a single month, exports of textiles and clothing increased by more than 50% over the same period in March. Among them, textile exports amounted to US $20 billion 165 million, an increase of 32.7% over the same period last year, and exports of clothing and accessories reached US $28 billion 460 million, an increase of 18.4% over the same period last year.

It is worth mentioning that textile and garment exports accounted for 10.89% of the total domestic exports in March, and this proportion was at a low level in 6 years. Considering the depreciation of US dollar by 5.42% in March, the actual export volume of textiles, clothing, textiles and clothing in China increased by 45.15%, 51% and 40.17% respectively.

From a single month, on the basis of the export downturn in February, China's textile and clothing exports rebounded strongly in March, and the actual export volume excluding dollar value changes maintained a relatively high level of growth, driving the average growth rate in the first quarter to rise significantly, exceeding market expectations. According to statistics, China's textile and clothing exports in February amounted to 10 billion 440 million yuan, a decrease of 51.7% compared with the same period, a decrease of 18% over the same period last year. In contrast, China's textile and apparel exports reached US $16 billion 570 million in March, an increase of 50.6% over the same period last year, of which 7 billion 898 million US dollars in textile exports and 8 billion 670 million US dollars in clothing exports, up 56.4% and 45.6% compared to the same period last year, respectively, by 96.2% and 35.2% respectively.

From the point of view of exports, China's exports to the EU textile and apparel in the first quarter amounted to US $10 billion 290 million, an increase of 21.2% over the same period last year, and the unit price of major commodities increased rapidly. The number of yarn exports increased by 48%, the export unit price increased by 44.6%, the number of needle woven garments exports increased by 20.2%, and the export unit price increased by 20.6%.

In the first quarter, China exported $6 billion 750 million to us textiles and clothing, an increase of 12.6% over the same period last year, the smallest increase in China's main export market, but the export unit price kept rising. The export prices of yarn and needle woven garments increased by 12.3% and 17.7% respectively. Over the same period, China's textile and apparel exports to Japan amounted to US $5 billion 836 million, an increase of 25.06% over the same period last year.

Benefiting from tariff preferences in the FTA, China ASEAN trade has achieved rapid and two-way growth. In the first quarter, China's exports to ASEAN textiles and clothing amounted to US $3 billion 830 million and imports amounted to US $450 million, up 38.7% and 39.5% respectively over the same period last year.

From the perspective of the export of individual enterprises, Shandong's Wei Qiao textile Limited by Share Ltd outperformed its textile and apparel exports in the first quarter, reaching 254 million US dollars, accounting for 79% of the total export volume of textiles and clothing in China.

In terms of imports, China's textile and clothing imports totaled US $5 billion 172 million in the first quarter, an increase of 6% over the same period last year, of which $572 million was imported from the European Union, an increase of 31.89% over the same period last year.

Cotton price "high concussion"

According to the statistics of the Ministry of industry and commerce, the average price of domestic cotton price index (grade 328), polyester chip and polyester staple in the first quarter were 29708 yuan / ton, 13433 yuan / ton and 14517 yuan / ton respectively, up 93.9%, 35.6% and 38.1% respectively, up 2897 yuan / ton, 2108 yuan / ton and 1267 yuan / ton respectively compared with the fourth quarter of last year. The average price of all cotton yarn of polyester filament yarn (DTY) and Qian Qing market 32 yuan was 1267 yuan / ton and Yuan Yuan / ton respectively.

According to the statistics of China Cotton Association, the average monthly price of international cotton prices reached 5116 US dollars / ton in March, the international futures price was 4678 US dollars / ton, and the price of imported textile chemical fiber raw materials reached US $3368 / ton, all of which are all new highs. Domestic cotton spot price reached 60684 yuan / ton, futures price 30716 yuan / ton, up 97.48% and 88.3%, up 2.14% and -4.93% respectively.

In order to maintain the supply of domestic cotton market, in March 31st, the eight departments of the national development and Reform Commission jointly issued the 2011 cotton temporary purchase and storage plan, and decided to implement the temporary cotton purchase and storage system in the new cotton sale period from September 1, 2011 to March 31, 2012. The temporary storage price was 19800 yuan / ton from the standard grade lint to the warehouse.

From the point of view of import and export, China's cotton import prices continued to rise in March, and the number of imports rebounded, of which cotton imports from India rebounded sharply. Of the imported cotton, nearly 60% used quasi tax quotas, and nearly four became import quotas.

In the first quarter of this year, China's total import of cotton was 850 thousand tons, which was basically the same as that of the same period last year. The average import price was 2957 US dollars / ton, up 72% over the same period last year. From the point of view of imports, China imported 416 thousand tons of cotton from the United States in the first quarter, an increase of 85.7% over the same period last year, accounting for 49% of the total domestic imports, and 323 thousand tons of cotton imported from India, down 18.6% from the same period last year, accounting for 38% of the total domestic imports; 54 thousand tons from Uzbekistan, down 46.5% from the same period last year.

Among them, 276 thousand tons of cotton imported in March, an increase of 92 thousand tons compared with February, an increase of 50%, a decrease of 14.6% over the same period last year; the average import price continued to rise, reaching 3097 US dollars / ton, an increase of 2.85% compared with February, and the increase in the ring rate slowed down, up 77.9% over the same period last year.

From the point of view of imports, 151 thousand tons of cotton imported from the United States in March, an increase of 34.8% from the previous month, accounting for 54.8% of the total imports, and 84 thousand tons of cotton imported from India, a 1.1 fold increase from last month, accounting for 30.5% of the total imports; 18 thousand tons from Uzbek, a 6.1% decrease from last month, accounting for 6.6%. From the point of view of import prices, China imported cotton prices from the United States, India and Uzbekistan to 2998 US dollars per ton in March, 3180 US dollars / ton and 3421 US dollars / ton respectively, up 5.7%, 0.7% and -1% respectively.

Export environment is tightening, domestic demand continues to flourish

In recent years, parts of the global textile and garment orders have been gradually diverted from China to countries with more cost comparative advantages, such as Bangladesh, Vietnam and Indonesia.

In the first two months of this year, the number of garments imported from the United States increased by only 8.47%, up from 3.83 percentage points from the number of imported garments imported from the United States, according to the statistics of the textile department of the US Department of Commerce. Over the same period, the number of garments imported from Vietnam, Bangladesh and Indonesia increased by 19.25%, 31.26% and 17.43% respectively.

While the export market is "tight", the domestic textile and apparel market is booming. According to the National Bureau of statistics, in the first quarter of this year, the total retail sales of clothing shoes and hats and needle textiles reached 201 billion 400 million yuan, an increase of 22.3% over the same period, of which 54 billion 600 million yuan in March, an increase of 21.9% over the same period last year.

B operation characteristics

Export exceeds expected growth, cost rises, pressure on textile and garment enterprises

"Volume reduction" is the main theme of export {page_break}

In the first quarter of this year, China's textile and clothing exports exceeded expected growth. In addition to the warmer demand in the international market and the lower base level in the same period last year, the promotion of product prices is also an important factor.

According to the China Textile Industry Association, China's textile and apparel exports to the world increased 19.46% in the first quarter compared with the previous year, of which 24.3% of textile prices and 16% of clothing prices. Excluding price factors, the number of textile and garment exports in China increased by only 3.5% over the same period last year, a decrease of 10.75 percentage points over the 14.28% growth rate in the same period last year.

In terms of specific products, the number of textile yarn exports in China in the first quarter of this year increased by 29.2%, up 1.4 percentage points from the same period last year, and the price increased by 26.15%, an increase of 14.25 percentage points over the same period last year. The export volume of textile fabrics increased by 7.08% percentage points, 14.62 percentage points higher than that of the same period last year, and the price increased by 31.13% percentage points, representing a 28.22 percentage point increase over the same period last year. The number of knitted garments increased by 2.4% percentage points over the same period last year, up by 9.58 percentage points over the same period last year, and the price increase was 16.33% percentage points higher than that of the same period last year.

Liu Xin, a statistical center of the China Textile Industry Association, believes that the continuous increase in prices and slow growth in volume have become the main features of China's textile and clothing exports in the first quarter of this year.

According to statistics, in the first quarter of this year, the average unit price of the export of large categories of textiles in textile industry was raised, including cotton yarn yarn and chemical fiber yarn price increased by 57.4% and 23.8% respectively, and the unit price of fabrics and needles and woven garments increased by 28.7% and 16.2% respectively.

Irreversible in the era of high cost

In the financial crisis, ensuring orders and ensuring production is the top priority of textile enterprises. After entering the post crisis era, the cost of labor, raw materials, RMB appreciation, environment, land and capital has risen, which has become an unbearable burden for textile and garment enterprises.

The survey shows that the superposition of the above multiple cost pressures has increased the export cost of textile enterprises by 10~20 percentage points, especially the rising cost of raw materials has become the biggest burden of enterprises.

Take cotton as an example, the price of cotton and textile materials has reached a new high this year. Although the world's cotton prices hit a record high in March, they were still at a high level and far higher than domestic prices.

It is believed that the situation of tight supply of cotton in China this year does exist, but cotton price deviates from the crazy rise of supply and demand fundamentals, which has seriously damaged the interests of all parties in the cotton industry. With the continuous introduction of the national macro-control policies and measures, cotton prices are expected to return to rationalism after excessive speculation in the pre market, but in the long run, the rise in cotton prices will be an inevitable trend.

In addition to soaring cotton prices, recruitment difficulties caused by rising labor costs are also a real challenge for textile and garment enterprises.

According to the enterprises in Jiangsu, Zhejiang and Guangdong, the recruitment situation of factories is only 70%~80% in the past years, and some even less than 50%. In order to solve recruitment difficulties, enterprises can only raise salaries and salaries substantially. Since last year, the wage increase in the Yangtze River Delta and the Pearl River Delta region has generally reached 20%~30%, showing a rigid upward trend.

The appreciation of RMB will also directly weaken the price competitiveness of China's textile and clothing export products.

Polarization of enterprises intensifies

Since the beginning of this year, due to the role of cost increase in the industrial chain and the acceleration of RMB appreciation, most small and medium-sized textile enterprises have been unable to cope with it. Some of them have been cut down or shut down, even facing the dilemma of being forced to withdraw from the market.

After the industry reshuffle, the advantageous resources and orders will accelerate to the large enterprises, and the latter's right to speak and order to choose will increase obviously, and the survival condition of the small and medium-sized enterprises will be worrisome. The polarization of the textile industry will further aggravate.

Statistics show that in the first quarter of this year, 1/3 of the dominant textile enterprises created more than 90% of the profits of the whole industry. Among them, the average profit margin of not less than 10% of the enterprises accounted for 7% of the total number of enterprises, created 35.3% of the profits of the industry; the average profit margin of 5% of the enterprises accounted for 24.5% of the total number of enterprises, created 53.8% of the profits of the whole industry; the average profit margin of less than 1% of the total number of enterprises accounted for 68.5% of the total number of enterprises, its profits accounted for only 10.9% of the industry.

The first textile network predicts that only two types of enterprises will survive in the fierce global market competition, one is the dominant enterprises with an average profit margin exceeding 5%, and the two is a textile and garment enterprise with strong bargaining power.

C prediction

Export growth or normal growth will slow down export growth throughout the year.

In order to resolve the rising cost pressure, from last year, the unit price of China's textile and clothing export products began to increase, and showed a trend of increasing month by month. The export price increase this year is the first time to reach two digits, and some orders have been lost due to price increase.

In view of this, the "protagonist" of China's textile and clothing export growth in 2011 has changed from quantity growth to export price promotion, and the future export price increase or become a normal state.

According to statistics, in the first two months of this year, the unit price of China's major textile export products increased rapidly, of which the yarn export unit price increased by 24.7% and the fabric increased by 28.7%. Needle and woven garments increased by 13.7%, and the unit price increased to two digits, much higher than that in 2010.

It is said that with the increase of domestic factor cost, the era of developing Chinese textile export products at lower prices has ended. Compared with the price increase caused by the rising cost in the end of 2007, in the context of limited potential of domestic tapping, China's textile and clothing export products will continue to raise prices in the future. It is necessary to be vigilant against the export decline situation after the export price increase exceeds the capacity of foreign manufacturers.

"Due to the fact that the global centralized replenishment process has come to an end, the cost reduction mechanism will force the textile export products to raise the price 10%~15% generally, the price game process will be very difficult, and some low price orders will also be diverted to the low cost area." Say.

In fact, in March this year, the China International Trade Fair (China East China Import and Export Commodities Fair), China's textile enterprises order prices generally increased by 15%~20%, individual products increased price range. Because it is difficult to accept the price increase of some textile and garment export products in China, some European and American manufacturers have begun to reduce the amount of procurement in China, instead of buying goods from Southeast Asian regions with more cost advantages. The reporter learned from the 109th Canton Fair that has just concluded that because of the uncertainty factors such as rising costs, purchasers were generally cautious. The proportion of short and single bills continued to rise. The proportion of short and medium bills reached 90%, while long bills accounted for only 10%.

It is believed that in the first quarter of this year, benefiting from the global economic recovery, the ability of bargaining power of enterprises, and the competitive advantage of industries that have been formed for many years, China's textile and garment exports continued to maintain a relatively rapid growth. The export volume of a single month has reached a new high. However, there are still many worries behind the surface gloss, such as the difficulty of enterprises receiving orders, the worrying situation of the survival of SMEs, the increasing diversification of trade frictions and the obvious increase of technical barriers.

He predicted that after the "extreme volatility" in 2009 and 2010, under the combined role of high costs, RMB appreciation and international environmental turbulence, the export environment of China's textile industry will become increasingly severe this year, and the export growth rate will obviously slow down. The growth rate of textile exports will be reduced to around 15% this year. {page_break}

As for the impact of Japan's earthquake on China's textile exports, an industry insider said that although the Japanese strong earthquake has dragged the pace of global economic recovery to a certain extent, it seems that its impact on China's textile and clothing exports has not yet appeared. In the short term, Japan's earthquake and tsunami disasters have impeded maritime transport, thereby affecting delivery orders or temporarily postponing orders in the textile industry. But in the long run, Japan's post disaster reconstruction will boost its demand for textiles, especially industrial textiles.

D policy recommendations

Constantly expanding the competitiveness of value chain exports need to be improved

Liu Xin believes that in the background of high production costs such as raw materials, the acceleration of RMB appreciation and the sudden emergence of foreign competitors with price advantage, it is imperative for China's textile and garment enterprises to continuously enhance their export competitiveness. To this end, we should enhance product design and R & D capabilities, increase value-added products, continue to consolidate and enhance international market share, increase brand cultivation, channel development and overseas marketing efforts, and continue to extend the export value chain.