Garment Manufacturers Encounter The Most Serious "Money Shortage" Test In History

The National Federation of industry and Commerce for 2 months, conducted intensive research on 16 provinces and small and medium enterprises, and found that the impact of rising raw material prices, labor shortage, electricity shortage, financing difficulties and exchange rate changes, and other small and medium-sized enterprises at present, the day is more difficult, and some even stop work and semi shutdown.

Reporters recently learned from some clothing enterprises in Zhejiang that under such difficulties, the traditional mode of foundry is facing severe challenges.

New regulars in the foundries

At present, Wang Dingying, general manager of Zhejiang Taiping bird import and export company, has over 100 foreign trade workers who work at the foundry factory, but become a production supervisor.

Taiping bird is a typical foreign trade company that produces light products. It has more than 200 foundries in the Yangtze River Delta and Shandong. This year, money is tight, and these factories are generally experiencing financing difficulties.

Wang Dingying said: "even if there is a bank credit line, the annual loan interest rate will generally float about 30%. The small and medium sized enterprises without credit lines are almost impossible to win loans." without money to go to raw materials, the factories have asked Wang Ding Ying to raise the proportion of the advance payment from 30% to 100%.

Wang Dingying could not agree to this request: "foreign businessmen give us only 30% deposit.

Do we have to carry all the pressure on the capital?

In this way, to whom the order is placed is the biggest entanglement of Taiping bird. If we choose carelessly, once the risk arises in the factory, the Taiping bird will be implicated, which is like a gambling.

In a very extraordinary period, Wang Dingying ordered foreign trade clerks to go to the factory to follow orders and pay close attention to factory trouble.

On the two days, Bao Xuelian, a foreign trade salesman, went to the factory in the daytime to talk with foreigners on the phone and fax.

She said that the latest shipment was more than 10 thousand children's clothing exported to Japan, which required delivery in 3 months. Now the foundry factories are making money shortage, so that they may have problems, so they go to the factory almost every day.

Bao Xuelian worked as a salesman for 20 years. He used to go to factories to check the goods before shipment.

The worry of Taiping bird is not a worry.

Xia Hongfang, general manager of Ningbo Liancheng Garments Co., Ltd., confirmed to reporters that the collapse of peer industry has begun to show signs. Recently, in Wenzhou and Ningbo, as far as he knows, there are more than 200 garment factories closed, most of which are 50 to 100 small businesses.

Xia Hongfang said: "there are many reasons for closing down. Some factories are pressed down by one way. The more intermediate links, the less vulnerable they are. If only one of them is broken, the foundry will suffer.

There are also matching dyeing and weaving enterprises. Now they all require cash in cash, and also increase the financial pressure of clothing enterprises, see no profit, some owners who have completed the original accumulation simply shut down.

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The foundry mode is difficult.

"From the 90s of last century, the profit of garment factories has been struggling for less than 10%. In the past few years, the two or three spots are the most common, and five points are lucky."

Xu Jianchang, general manager of Ningbo lion group, said.

What do these five points mean? If RMB appreciates another 5%, the profits of export garment enterprises will evaporate immediately.

In order to avoid exchange rate risk, Taiping bird and other enterprises adhere to the "two principles": more than 500 thousand dollars or more, and the delivery time exceeds 3 months.

Wang Dingying reluctantly said, "people say that there is food in their hands, but they do not panic in their hearts. But why do they still have fear in their hands?"

The difficulties faced by export oriented clothing enterprises are much more than exchange rate fluctuations.

According to reports, in August 2010, domestic cotton yarn began to rise in price, and by the end of the year, the price doubled. Compared with Kampuchea, India and other garment processing powers, China's cotton yarn prices rose most fiercely, so clothes were also made. Chinese clothing enterprises offer 1 or 2 dollars higher than neighboring countries.

Moreover, clothing exports from many neighboring countries

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Foundry enterprises find a way out

As early as prophecy: relying on orders to survive, unable to obtain additional value of their own brands, this OEM mode will fail.

At the end of the industry chain, the manufacturing link should be reduced.

Some began to look for new production bases and markets.

Apart from 7000 artificial factories in Ningbo, lion Dan has built a new production base of 1000 people in Wuhu, Anhui. The next step will be to set up factories in Kampuchea.

As for the new market, for the Adidas, Nike and other OEM lions, they intend to enter the more expensive department stores and specialty stores abroad.

General manager Xu Jianchang said, "going to the top end must be a way out.

Just imagine that a clothing retailer can only sell 100 yuan, and you can only get a few dollars if you and a foreign businessman wear a bad mouth. If a dress is priced at 1000 yuan, the foreign businessman will also care about ten or twenty yuan for you? "Some enterprises began to cultivate the domestic market.

In the past few years, exports have been unfavourable. Taiping bird has intensified its product design and promotion efforts in the domestic market. In imitation of the Zara mode, consumers can buy similar styles of clothing with top international brands in only 2 weeks, at half or even 1/10.

It is revealed that at present, the domestic sales ratio of Taiping bird has reached 50%.

Some enterprises have been modified.

Xia Hongfang used to care about the exchange rate every day, but now he has no pollution.

As a result of the long run of Japanese orders in the past, Xia Hongfang has made a determined decision to use the resources of Japan's contacts to invite the professor of Hokkaido Academy of Agricultural Sciences as a shareholder to enter organic agriculture.

He said, "the way of thinking decides the way out, the OEM mode goes to the end, and we live in another way."