1 Yuan Clothing To Reproduce The &Nbsp; A Garment Export Enterprise Sliding To The Critical Point Of Profit And Loss.

"I feel the difficulties facing enterprises now are more than in 2008.

Garment export enterprises are facing difficulties recently.

Two weeks ago, a website financial channel reported the news of "1 yuan clothing store" in Guangzhou.

According to the news, 1 yuan clothing is reappearing in the market of special low price handling of factory tail cargo or inventory clearing business.

That is the place where, after the outbreak of the financial crisis in 2008, there were 1 yuan clothing stores because of the closure of many factories and the loss of goods.

"This is a crisis signal, indicating that clothing export enterprises are really very difficult."

Gao Ligen believes that domestic policy tightening, the continued depreciation of the dollar, rising production raw materials, labor costs rise......

Hangzhou garment export enterprises under multiple pressures are struggling.

"Orders are becoming less and less, and quotations are getting more and more difficult."

Miss Guo, a senior saleswoman of Hangzhou garments trade company, recently wants to change.

According to the data of Zhejiang Provincial Department of Commerce, the role of price factors in promoting Zhejiang's exports is more obvious. Some of the products actually do not grow very fast.

Textile and clothing exports reached US $16 billion 300 million in 1-4, an increase of 25.2% over the same period last year, but the average export price of textile and clothing rose by 19.7%. After excluding price factors, the actual growth rate was only 4.5%.

What does the slowing export growth mean? What makes the profits of the enterprises run away? How should the Hangzhou garment export enterprises at the break even point respond? The cover story of this issue will find the answer with you.

Anxiety, many garment export enterprises

A mindset of the responsible person

On the morning of June 3rd, Gao Ligen, chairman of Hangzhou Jie Feng Garments Co., Ltd., when he arrived at the company, held a meeting at the senior level to talk about the pressure that enterprises are facing now.

From the morning till noon, the most important thing about the company is that the order has not been reduced, but the profit of the company has been lost. At the moment, we are approaching the profit and loss threshold. We have a lot of things to do.

26 years ago, Hangzhou Jie Feng Garment Co., Ltd., whose predecessor was the red silk silk embroidery factory, started with several small bungalows and several old sewing machines. Gao Li led the staff to work hard, and developed the company into a group company with 100 thousand square meters factory buildings and 1300 workers.

"No matter how difficult it was before, I took everyone to work hard one year, and how many companies can earn some money, but this year we are approaching the breakeven point."

Gao Ligen believes that the difficulties that a traditional clothing and textile enterprise has to take are the most difficult factors to overcome.

The most uncertain factor is Gao Ligen's exchange rate change.

As a 100% business is an export business, Gao Li an account, the RMB exchange rate against the U.S. dollar from 8:1 to 6:1 now, the middle profit directly disappeared 2 yuan, this loss is almost net profit.

In fact, the impact of exchange rate changes on the textile industry is very obvious.

An investigation has been made by experts that the sales profit margin of the industry decreased by 2% to 6% when the value of RMB increased by 1%.

If the RMB appreciation is 5% to 10%, the profit rate of the industry will drop by 10% to 60%, especially the garment industry with high export dependence.

"We only have to renegotiate prices with our guests, but this is not a permanent solution."

Gao Ligen believes that another uncertain factor is the recent change in the "export tax rebate" policy on the day of the hubbub. It is rumoured that the change of the new policy will undoubtedly lead to the whole business of all enterprises.

In addition, there is also uncertainty in the factory, which is the pressure of rising cost of raw materials.

Gao Ligen said that the price of crazy cotton is unnecessary. In the circulation of cotton, textile enterprises belong to downstream enterprises, and the high price of cotton is more pressure on downstream enterprises.

In addition, like all manufacturing enterprises, we must face the pressure of rising electricity and coal.

Gao Ligen remembers very clearly that in 2008, coal was only 780 yuan and 1 tons, and the result was 880 yuan / ton at the beginning of this year, and now it rises to 950 yuan per / ton.

Raw materials and accessories are rising, which directly compresses the profit margins of enterprises.

Gao Ligen's other status is the president of Yuhang garment industry association. He disclosed that under the pressure of many local small and medium-sized clothing factories have been overburdened and had to close the factory.

Hangzhou Jie Feng Garments Co., Ltd., with its many years of cooperation and excellent quality system, still has an upward trend in orders, but these pressures have eroded the profits of enterprises and pushed the enterprises to the critical point of profit and loss.

Faced with this situation, he decided to launch his own brand this year and enter the domestic market in the second half of the year.

Can the small blackboard solve the recruitment problem?

There is a small blackboard on the gate of Hua Bena (Hangzhou) woollen dyeing and finishing Co., Ltd., 56, North Sha East Road, Yuhang economic development zone.

"If you go around the door of the clothing enterprise in Yuhang District, you must see such a small blackboard at the door of most enterprises."

The director of the unit's office Zhou said, recruitment is too difficult now.

In fact, in other places clothing enterprises, this small blackboard recruitment notice is not uncommon.

Shortage of labor is a difficult problem for Zhejiang manufacturing enterprises to face together.

It is reported that the Wenzhou economic and Trade Bureau has investigated 855 enterprises in the city since the end of the first quarter of this year. The results showed that 74.5% of the enterprises indicated employment shortage, which was 14 percentage points higher than that of the same period last year.

In order to recruit workers, it is a common method for enterprises to hire cars in front of the labor market entrance of major cities.

Zhou Zhou, director of the office of Hua Bena (Hangzhou) wool dyeing and finishing Co., Ltd., said that several recruitment experiences were not painful.

"We drive to the field to recruit workers, sometimes even if it offers very favorable conditions, people still do not want to come."

Director Zhou said that with the development of industries in some cities in the central and northern parts of the country, many locals could find jobs without leaving their hometown, which aggravated the recruitment difficulty of the coastal cities.

"Sometimes, when we drive to pick up new employees, they are afraid of pyramid schemes and so on. Do not ride in our cars. We prefer to find them by car."

Director Zhou found that in the face of more and more employment opportunities, the choice of workers and conditions were also high, and the cost of employment increased. Recruitment costs alone increased the cost of traveling abroad.

In order to retain employees, enterprises in addition to improving treatment and welfare, but also in management efforts.

Fang long, general manager of Hua Bena (Hangzhou) wool textile dyeing and finishing Co., has a habit of inspecting workshops at less than 8 o'clock every morning, not only to catch production quality, but also to communicate with employees better.

"The wages of former workers averaged 1500 yuan / month, now almost doubled."

Fang Long believes that if the flow of employees increases, the hidden labor cost will rise, so the enterprises have to find ways to retain their employees.

Gao Ligen, chairman of Hangzhou Jie Feng Garments Co. Ltd., has attracted large numbers of locals to enter factories to solve the problem of labor shortage. Even if some of the older people are competent for some relatively simple jobs in the workshop, he will use them correctly.

At the same time, Gao lien tried to use machine equipment instead of labor.

"For example, a rig machine needs to wear different lines when dressing different clothes. Instead of letting workers constantly change their lines, we need to increase the edge machine and what kind of machine to take out when we need to use them."

Gao Ligen believes that equipment investment can not only effectively alleviate the shortage of labor, but also improve the production level of the clothing industry.

The main line is cotton, linen and chemical fiber instead of high-grade fabrics.

Although the volume of orders is still growing, there are many changes.

The change is not just about profits, but also the contents of orders, so the main materials used in the factory assembly line are changing accordingly.

Hua Ding Group is a silk garment production enterprise, nearly 100% of the business is related to silk, and now the silk business has shrunk to 30% of the total business.

Cotton, linen, chemical fiber and other materials have become the leading role in the assembly line, and the elegant and elegant silk fabrics gradually fade away from the workers' view.

"Our orders mainly come from the European and American markets. In the past few years, high-grade silk garments and fabrics have been selling well, but now they are changing, the prices of orders are falling, and the positioning of customers' demand for goods is generally concentrated in the middle grade and affordable level."

Fang Long, general manager of Huayin group (Hangzhou) wool textile dyeing and finishing Co., said that his company mainly produces wool textiles, but the materials on the production line of the group company have already undergone corresponding changes. He believes that the decline in customer demand is a sign of the slow pace of global economic recovery, indicating that people's consumer confidence remains to be improved.

Fang Long's comments coincide with the latest US manufacturing and employment figures.

In May, the US ISM manufacturing index fell 6.9 to 53.5, the lowest level since September 2009, far less than expected 57.7, while the manufacturing industry's new orders index also dropped sharply from 10.7 to 51, a low level since June 2009. In May, private placement increased by 38 thousand, far below the expected 175 thousand, a 8 month low, reflecting a continuing sluggish recovery in the labour market. Last month, retailers' same store sales increased 4.9%, worse than expected 5.4%, reflecting high oil prices and uncertain economic prospects, inhibiting consumer spending last month, bringing consumer confidence to a low of 7 months last month.

Data on manufacturing, employment and service industries in the United States were totally inadequate. Meanwhile, manufacturing data in major European and Asian countries also fell sharply.

In May, China's purchasing managers index PMI was 52, falling to its lowest level in 9 months, which made many foreign trade enterprises practitioners like Fang long, regardless of whether they were worried about the market or the prospect of global economic recovery.

Miss Guo is a Senior Salesperson in a foreign trade company. Her biggest feeling is that it is becoming more and more difficult to make quotations.

"The price is high, customers do not order. If the price is reduced, the company can not make money."

Miss Guo remembered very clearly that five or six years ago, she was also doing the garment export business.

Her biggest feeling is that now the guests are not only chewing on the price, but also exceptionally picky in quality, so the cost of production increases, and sometimes the number of foreign trade will increase.

"Clothes on the market for foreign trade are often very low, but like Guangdong's 1 yuan clothes, Hangzhou should not be able to do so."

Miss Guo said that Hangzhou clothing export production enterprises have a systematic management system in production management and stock planning, to a certain extent, to avoid a large backlog of inventory.

Zhou Yao, general manager of Hangzhou Yuyao garments and Garments Co., Ltd. implements the "zero inventory" management method in production. He said the company's production of knitted garments with beautiful Nuo wool, cashmere and all kinds of blended yarn, cotton, cotton fine, linen cotton, artificial cotton and imitation cashmere as the main raw materials has a good sales abroad.

Where is the secret of "zero storage"? Zhou said that a stable workforce is the key. Senior professional staff have fewer error rates and can effectively improve productivity.

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Slowdown in export growth under heavy pressure, Zhejiang garment export growth slowed down.

According to the statistics of Zhejiang Provincial Department of Commerce, the average price of export commodities rose 8.2% in the first quarter compared with the same period last year. After deducting the price factors, the export volume of our province increased by 15.3% in the first quarter.

The price factor pushed up the export role of our province more obviously, and the actual growth rate of some products was not high.

In the first quarter, exports of textiles and clothing amounted to US $11 billion 600 million, an increase of 21.8% over the same period last year, and the export price of textile and clothing increased by an average of 18.8%, excluding the price factor, and the actual growth rate was 2.4%.

Nevertheless, the pipeline of some enterprises is still busy. Fang Long believes that the smooth operation of the company under heavy pressure has benefited from the complete industrial chain of the company.

"Our group has fabric, garment production workshop, and special design, foreign trade and domestic sales team."

Fang Long said that every process can be completed in the company, from raw materials to fabrics and clothing, which makes the enterprise's ability to resist risks increase.

"In the wake of this wave of crisis, Hangzhou and some small garment factories around us have closed a lot."

Fang Long said that some small garment manufacturers, even with ample orders, chose to close because of the lack of scale benefit in the face of huge cost pressures.

Gao Ligen, President of the Yuhang garment industry association, confirmed this statement. He said that some small garment factories around the world had temporarily gained the living space by not paying taxes and building factories in peasant houses to escape the cost pressure of industrial electricity.

But recently, under the pressure of cost pressure and exchange rate changes, some small and medium-sized garment factories in the region have been overwhelmed and have to close and stop factories.

A website "1 yuan clothing" reported that Guangdong garment processing industry has entered the "winter" ahead of schedule.

A medium-sized garment factory will idle most of its machines when it should be busy. The boss said this year's situation is even more severe than before the financial crisis.

Also, the boss said that orders for factories had at least decreased by 2~3% compared with the same period last year.

Lu Xiaoyan, a senior journalist from China textile daily, who has visited textile enterprises throughout Guangdong, is very much recognized by such a description. She said that many garment enterprises and fabric companies all sigh bitterness with her. Sometimes foreign trade clerks pick up the list, but they refuse to supply the factory, because the price of raw materials will increase the factory's willingness to pay liquidated damages and do not want to lose money in production.

In the aspect of garment export, because orders are not spot trading, there will usually be a cycle. Enterprises have to order raw materials and accessories, and also process, inspect and contact shipping schedules.

In this process, there are too many variable factors, and export orders are mainly earned processing fees. Profit margins often fail to squeeze. Some enterprises that are weak in risk resistance are inevitable.

Overseas factory order

Miss Zhang, a careful customer, found that some of the international brand clothing she bought now, the production site of the label above her clothing had changed quietly, and the label was no longer "made in China" in the past. The words "Vietnam", "Laos", "Kampuchea", "Bangladesh" and "Indonesia" appeared on the column of origin.

Gao Ligen believes that this is the embodiment of the consumer market after the pfer of garment industry.

In the "2009 China garment industry shift conference", "China garment industry pfer report" pointed out that China is now launching the fourth wave of industrial pfer.

"In 1950s, there were three international industrial shifts in the ~90 era, and the large-scale pfer from China's east to the central and western regions and overseas is now called the fourth wave of industrial pfer."

Jiang Hengjie, executive vice president of the China clothing association, pointed out in the report that the pfer is a necessity of historical development. "Because the traditional costumes of the eastern coastal provinces are experiencing more and more high cost of land, energy and labor, the ecological environment is also increasing."

"Some of my customers have been looking for new factories in Southeast Asia, and our orders are facing a diversion."

Gao Ligen pointed out that as an OEM foreign trade enterprise, the advantages of the production cost are decreasing day by day. Although the production capacity and stability of some foreign factories have no advantages for the time being, it will be able to meet the needs of customers through several years' development, and the outlet of Hangzhou garment export enterprises is late.

During this crisis, some people also found opportunities for domestic sales.

Fang Long, general manager of Hua Bena (Hangzhou) wool textile dyeing and finishing Co., believes that domestic sales are only a way to alleviate the current crisis. When the clothing export enterprises are facing the pressure of survival, they hope that the government departments can give more policy support to the entities run by enterprises.