Pearl River Delta Garment Bag Industry &Nbsp; Low-End Industries To Accelerate Relocation

At present, the enterprises visited have basically had the 20%-30% labor gap after automatic updating of equipment.

With the high cost of land use and procurement, many enterprises have begun to pfer part of their links to the central and western regions.

The Pearl River Delta clothing industry is urgent: the product is not priced, and the loss is getting bigger and bigger.

If the cost is rising, if the product does not raise the price, the loss is getting bigger and bigger. If the price is raised, the buyer turns and goes. It is very helpless.

Cotton price has dropped to 24 thousand yuan per ton since March, when it rose to 33 thousand yuan per ton.

In the cotton price "roller coaster" period, textile and clothing export data seems to be more beautiful.

Customs statistics show that in the 1-5 months of this year, China exported about 20 billion 338 million US dollars in textile and clothing, an increase of 23.77% over the same period last year, an increase of 2.33% over the same period.

Exports of textile yarns, fabrics and products were US $8 billion 619 million, an increase of 23.68% over the same period last year, a decrease of 1.69% in the ring ratio, and an increase of 23.85% in the export garments and accessories accessories, representing an increase of 5.51% over the previous year.

However, no enterprise is happy.

Not only textile and garment enterprises, but also labor-intensive and easily replicated ones.

Shoes and hats are bogged down in textiles.

Since last October, the price of footwear, clothing and other industries in the PRD has risen.

Liang Richang recalled those days, though he was worried about the shortage of workers, there was still room for adjustment.

But after the appreciation of the renminbi in October last year, Liang Richang's factories run.

"In March last year, cotton was only 15 thousand yuan / ton, and then it came to 40 thousand. At the same time, it came down to more than 20 thousand, and there was also a shortage of manpower. In the past two years, we have a shortfall of 20%.

The wages should be paid for social security, which factory did not mention the wages of 20%-30%? "Zhao Juncai, director of TEDA clothing factory, said that, combined with the recent changes in exchange rate, overall, if the sales of clothing did not increase by 40%, it would not achieve the original profit.

Statistics show that in the first quarter of this year, China's textile and clothing exports to the world increased by 19.46% compared with the same period last year, of which textile prices increased by 24.31% compared with the same period last year, and clothing prices increased by 15.99% over the same period last year.

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"The rise in export volume is mostly due to the increase in product prices. On the contrary, the export situation is not very optimistic."

Gao Fang, Secretary General of China Cotton Association, said.

Excluding price factors, the number of textile and garment exports in China is basically flat compared to the same period last year.

Pan Rihui, Secretary General of Dongguan textile and garment industry association, pointed out that cotton generally accounts for about 40% of the cost of clothing. If the price of cotton rises by 5%, the profits of enterprises will drop by 2%.

Over the past year, TEDA apparel has only sold 20% of its clothing to the United States.

At the beginning of the year, after the factory automation, the dependence on employment decreased, the production efficiency increased, and the problem of high cost was alleviated.

But Zhao Juncai said that the final profit margin was only half of what it used to be, but orders fell by more than 15%.

"Labor costs and raw material costs increase the total cost by about 15%, and the cost of logistics and the impact of RMB appreciation are also 10%.

The total cost has increased by 25% in one year.

Our product price has increased by 20%, and it can only offset about 70%. "

Liang Richang said that labor costs and the appreciation of the renminbi are the biggest factor.

Despite the decline in cotton prices, the price of cotton yarn and cotton cloth recently purchased has not declined significantly, while the prices of raw materials such as chemical fiber and polyester have risen slightly.

"We can not feel the positive effect of the cotton price reduction for the time being, and we can not get the price up."

Ningbo Shanshan clothing official said.

"The upper reaches of the garment are not complicated. The chemical fiber and cotton come over are cloth, that is, the design is also simple, so the price comes up, and the customers say there is no way to go to Southeast Asia.

Because the labor force has come up, the exchange rate has come up, the cost of raw material logistics has come up, and the price can not go back. "

Lu Miao, general manager of Guangzhou Xintang Mei Huang textile and garment factory, said that the technical content of clothing is not high, so bargaining power is low.

"Good clothes, you raise 30%, say good and bad, they will always accept, after all, we have designed more advanced than they see Bangladesh and other places, but the amount of orders will be reduced.

We must choose to do the stall business according to quantity.

This will not be as much as 17%-18% less than us last year, but you can raise the price to 20% above this list, and it will be a loss if you calculate it back.

So a lot of enterprises are forced to pick up high-end goods, but the order of high-grade goods is not readily available.

"If the price is not increased, the loss will be bigger and bigger. If the price is raised, the buyer will turn away."

Lu said that in the past, its factories could sell 7 million pieces a year, a gross profit of 5 yuan, a net profit of 25 million, and if it did not raise the price of 10%, it would almost lose money.

When it comes to 30%, a piece earns 3 yuan and makes millions of money. The more the price is raised, the less it will be sold.

Order flows to Southeast Asia

And behind such helplessness, these orders have begun to shift to Vietnam, Bangladesh, Indonesia and other Southeast Asian countries.

"Export orders have decreased by 10%-20%, and some of our customers in Hongkong, Taiwan and Korea have begun to pfer some orders. As the mainland gradually lost their cost advantages, these customers began to choose cheaper places. Some of the middle and low order orders were pferred to Southeast Asia, and high-end clothing could be purchased from Europe and the United States.

With the appreciation of the renminbi, our export business is becoming more and more difficult. "

Wang Yisheng, director of Lotte Garments Co. Ltd.

Statistics show that in the first two months of 2011, the number of garments imported from the United States increased by 8.47% compared with the same period last year, while that of the United States from Vietnam, Bangladesh and Indonesia increased by 19.25%, 31.26% and 17.43%.

India commercial standard reported that orders for products from the United States and Europe have increased by about 10%-15% in the textile and garment manufacturing industry of India.

The head of the India Textile Industry Association said: "although India exports account for only 4% of the global garment export market, some of the orders originally planned to reach Chinese companies have now shifted to India due to the rising labor costs in China."

"We have organized a representative of the Hong Kong businessmen to study in Southeast Asia. If we open a factory there, the combined cost will be 60% lower than that in the Pearl River Delta and the Yangtze River Delta."

Zhu Guoji, President of Dongguan Foreign Investment Association, said that the labor cost of Vietnam is only 50% of that in Central China, and India's labor cost is only 90% of that in Central China.

Low cost naturally makes the commodity price advantage.

A survey of 385 international buyers released last month by the international trade platform global resources revealed that most buyers surveyed said they needed to pay higher prices for Chinese products, while 31% of respondents said they would increase purchases from Vietnam.

The survey also shows that Chinese exporters have already felt that orders are shifting. One of the reasons is that Vietnam's price is 30% cheaper than China's.

In this regard, senior analyst Wang Qianjin believes that the textile and garment industry as an example, from the end of last year, there have been a small number of low-grade orders to Vietnam and other countries, but the impact on China's overall exports of textiles and clothing is limited. At present, no country or region can replace the status of China's textile industry, nor can large-scale orders be pferred. The textile processing capacity of Southeast Asian countries is still limited, for example, last year China's textile and garment exports exceeded 200 billion dollars, while Vietnam had only about 10000000000 dollars, there is still a big gap.

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In Burma, skilled workers are still scarce, even though all manufacturers are raising minimum wages.

In Indonesia and Philippines, the government has increased investment in labor training, but the shortage of skilled workers is becoming more and more serious.

"I used to run a factory in Indonesia, but because the cultural differences are too large, the workers' attitude is generally laziness, and all kinds of matching are not perfect. For example, if you want to find a PU leather, you may not buy what you want, so you finally withdraw it."

Liang Richang believes that in recent years, Chinese manufacturers believe that we have the advantages of matching, technology and so on. Southeast Asian countries can not support the manufacturing industry which is much larger than the original. Therefore, it has little impact on us, but in fact, Southeast Asian countries have been improving various supporting industries in recent years.

Hongkong trading company Li Fung Co., Ltd., because of rising cost pressure, through the pfer of business to Indonesia, Vietnam and other places to resolve.

Le Yumin, President of the company, said at a news conference earlier that many Southeast Asian companies are working hard to achieve the goal of cooperation among enterprises.

For example, more than 10 Southeast Asian garment suppliers have recently reached an agreement to build a garment supply chain between garment processing companies such as Kampuchea and other suppliers in Thailand or other neighboring countries.

This is similar to the "one-stop" service provided by Chinese clothing suppliers, namely, procurement of yarn, cloth, buttons and sewing in the same area.

In the interview with local media, Wen Shuyang, chairman of the Kampuchea Garment Manufacturers Association, said that the vision of Southeast Asia is to realize the operation mode of "one country and many provinces" rather than divide and rule ten countries in one region.

He said that although countries differ greatly, they must compete for more business from China.

PCCS group, a listed company in Malaysia, has business in China and Kampuchea.

YikThongChoon, assistant general manager of the company, revealed that they have two factories in China. In the past 6 months, the wages of workers in the factory have risen by about 50%. Due to the scarcity of labour force, the capacity of two factories is still less than half.

In sharp contrast, the company's factory in Kampuchea exceeds the actual demand.

"Labor intensive industries such as shoes and bags, which are of low added value, have been relying on price advantage competition for many years. Now the advantages of cheap labor are gone, and other kinds of costs are rising. It is imperative to pfer orders and even industries to Southeast Asian countries with more price advantages."

Jiang Lin, director of the Department of Finance and taxation of the south of the Five Ridges Institute of Zhongshan University in the Pearl River Delta manufacturing industry and a special researcher of the Dongguan municipal government, said that in recent two years, according to his investigation, there are indeed many European and American buyers who pfer orders to Southeast Asia, which will guide the pfer of industries with low added value and the use of low-cost competition.

"Brands with better quality will be left to shuffle, but most of the labour intensive enterprises in the Pearl River Delta are generally low in value."

Midwest great shift

"Last year we opened a woolen mill there, which has 1500 yuan a month, and no overtime work at night. It is not so high to live at home and equal to more than 2000 of wages here in Dongguan."

Zhang Jianfeng has worked in Xie Gang, Dongguan for 5 years. He is 20 years old and he is tired of working outside the city.

Now his hometown Jiangxi Ganzhou also has many factories, ponder over and over again, he plans to pack up the luggage to return to the Ganzhou hometown to work.

At the gates of many factories in the Pearl River Delta, Zhang Jianfeng, the same dragging trunk, is very few. In addition to the lack of people in various towns and streets in Dongguan, the original workers in factories are also losing their jobs, or going to the Yangtze River Delta or returning home for employment.

Dongguan Zhitong talent market research data show that demand for labor in Wuhan reached 300 thousand this year, similar to that in the United States, GREE, Foxconn and other enterprises in Wuhan.

Hubei used to be a big province of labor export in Guangdong, but on the open data of Hubei labor and employment administration, this year, Hubei migrant workers' phenomenon of "reflux" is very obvious. The output of migrant workers will shrink further. At least, the export of labor services will be reduced by 1 million, while the number of migrant workers who are sent to the Pearl River Delta region will be reduced by at least 600 thousand.

At present, the enterprises visited have basically had the 20%-30% labor gap after automatic updating of equipment.

With the high cost of land use and procurement, many enterprises have begun to pfer part of their links to the central and western regions.

Hong Qihui, general manager of Dongguan run Tian clothing company, is planning to open factories in the mainland.

He calculates a bill. If the factory is opened in Hunan or Jiangxi, the export of finished products will still take the Shenzhen Yantian port. The rough estimate of pport cost will increase from 5% of the original cost to 12%.

The cost of raw material procurement such as factory relocation is basically offset by the cost of logistics pportation.

But it can enjoy more abundant and cheap labor force, which can increase the profit margin for enterprises by more than 10%.

Many factories interviewed also indicated that most of the new factories in inland areas were undertaken by some manual processes.

For example, Dongguan Dalang dream dream Wright apparel Co., Ltd. will distribute a large number of weaving process to Guangxi Cenxi area, and then it will be pported back to Dongguan after completion.

In the town of Dalang, known for its textile industry, the basic 80% factories are pferring part of the labor intensive processes to the central and western regions and accelerating the pfer speed in the past six months.

Hong Qihui also said that he rebuilt factories in the mainland and was only a branch factory with more labor processes.

In addition, cotton prices rose to 32000 yuan per ton at the end of last year, and many textile enterprises had invested and built factories in Xinjiang, the main cotton producing area.

In the first quarter, the statistics of China Textile Industry Association showed that the investment volume of textile enterprises in Western and central 1~3 increased by 62% and 63% respectively this year, and the proportion of investment in the western region increased by about 4 percentage points.

The change in the number of new projects is mainly reflected in the central region. In the first 3 months, the number of new projects in the central region increased by 8% over the same period last year.

"The Midwest is close to the cotton producing area, where enterprises can effectively control local cotton resources and control costs, and on the other hand, the labor costs in the central and western regions are relatively low, so the textile enterprises will move faster and faster to the central and western regions."

Dong Shuangwei, manager of the futures research and development center, said.