Jinjiang Cotton Textile Enterprises Seek Breakthroughs In Many Ways

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"If last October, we still had time to chat in this tea, almost every five minutes received a reminder phone.

Now, there is no more than one business phone call a day, and we have to consider what to do with goods stored in the warehouse.

Last week, Henan plain cotton.

These two industry insiders "idle to panic" state, is to explain the current majority of cotton supplier and cotton spinning business status.

From February approaching 35000 yuan / ton, to now below 25000 yuan / ton, just three or four months cotton price diving speed is fast, let downstream cotton spinning enterprises at a loss.

Recently, the Ministry of Finance issued a policy document on reducing import tariffs on textile raw materials such as blended fabrics and linen yarns from July 1, 2011.

3 million meters high inventory

Cotton prices suddenly dropped sharply after their high position, which made many downstream cotton spinning enterprises even too late to respond.

Many cotton mills, which hoarding cotton yarns at high cotton prices, are seriously frustrated.

"We bought a batch of cotton yarns in 2 and March. Due to too much inventory in the previous year, we lost money in May, basically losing money from raw materials."

Mr. Yan, director of production of Jinjiang cotton spinning enterprise X company, said.

In addition to the pressure brought by the stock of raw materials, it has been coming for months.

It is not just a X company that feels "very hurt".

Many cotton spinning enterprises such as Baikai textile and de Rong textile are also facing high storage pressure.

"Our monthly production capacity is about 200 million meters, only about six or seven of the goods are shipped out, and the rest are in the warehouse.

Even if the contract is negotiated with the broker, it will be necessary to pick up the goods, but most of them will not be able to achieve it.

Based on long-term cooperation considerations, this part of the cost is on the production enterprise. "

Jinjiang linlinyi

But Baikai textile is reluctant to follow the mainstream trend of the current market price reduction, and has to choose to store after production.

"De cotton"

Conversion to blended products

How to alleviate the financial pressure brought by high storage enterprises has become a problem that cotton spinning enterprises have to face up to.

"High inventory leads to the shortage of enterprises' disposable capital.

Large enterprises with strong financial strength may still be able to stay for some time, but small and medium-sized cotton spinning enterprises will not be able to do so.

Therefore, enterprises should try to reduce the increase in inventories.

As far as our enterprises are concerned, on the one hand, they sell products to old customers at the current market price, while on the other hand, they reduce their purity.

Through the use of chemical fiber and cotton blended to reduce the dependence on cotton raw materials, this way of "de cotton" is becoming one of the ways for most cotton spinning enterprises to seek.

De Rong textile introduced more than 100 air-jet looms from Belgium at the end of last year. All these new advanced equipment were used for blending products after they were launched this year.

At the same time, the company also made technological pformation of the original machine equipment, and turned it into the production of blended products.

Today, the company's pure cotton products are almost zero production.

"Chemical fiber raw materials prices fluctuate little, relatively stable.

The use of blended products to reduce the use of cotton can avoid the risk of cotton price fluctuation.

For example, the ratio of pure cotton and chemical fiber to a product last year is 8:2, which may reach 6:4 this year. A ton of products can reduce many costs. "

Hong Chao Kong said that the blended products are made of many kinds of materials. By adjusting the proportion of raw materials, it can effectively reduce the dependence on price rising raw materials and reduce operational risks.

In addition to turning to the production of blended products, Jin Tao, deputy general manager of Baikai textile also suggested that when the order is reduced, enterprises can choose to produce some conventional cotton spinning products, so that even if there is stock, there is no need to worry about future sales.

"Now is the market downturn, but in the long run, cotton prices should return to high levels.

When there are no orders in the market, enterprises can choose to produce some conventional cotton products on the right side, while maintaining the operation of the machine, on the one hand, to prepare for future contingencies.

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Looking forward to regional cotton price tracking mechanism

For the industry ahead of the cold winter, Jinjiang cotton textile industry generally believe that this is last year's cotton price "high fever" left behind sequelae.

Under the predicament, cotton spinning enterprises began to return to rational thinking and consider the long-term development plan.

"I carefully studied myself and my colleagues and found that most businesses were very upset if they blindly followed suit at high cotton prices.

In fact, when prices were high in 2 and March, we also stored raw materials, but at that time, the market was good. We sold advance deposits in advance. It was this part of the deposit that helped us through the most difficult period, otherwise the consequences would be unthinkable.

Hong Chao Gang revealed.

It is reported that de Rong textile is still a relatively rational enterprise, with long-term and professional institutions docking, ahead of track market cotton prices.

And those small businesses that are completely following the trend are not so lucky. They have been storing up raw materials for two or three months at peak hours. Most of them are unable to digest because of lack of financial strength.

"Market volatility can not be evaded, but it can be tracked and prevented. Enterprises should have this awareness and establish a cotton price tracking system.

I suggest that enterprises can take the lead and enterprises in the region will join together to hire economic advisers to study national policies and market trends.

At the same time, we can jointly purchase price quotes and share them.

If we can establish this regional cotton price tracking mechanism, I believe it will help Jinjiang cotton textile industry to stand out in this crisis.

Industry observers at cotton spinning enterprises suggested to Mr.

Cotton yarn supplier Zhu Qingzhang believes that to help the industry through the winter, the establishment of a stable cotton price mechanism is imminent.

"Last year's" high fever "results in the sale of state cotton instead of pushing cotton prices to a higher level, which means that the country is late and the market is crazy.

Today, the state should make timely efforts to stabilize cotton prices. Even if we want to promote pformation, we must give the industry a buffer period.

Some enterprises are planning to expand against the trend.

When most cotton spinning enterprises are entangled in the fluctuation of cotton prices, enterprises also see opportunities for development in the crisis and expand their counter trend.

De Rong textile is one of them.

After studying the development trend of cotton textile industry from last year to now, Hong Chao Kong thinks that only large scale enterprises can resist frequent fluctuations in the market.

And this year's sales of blended products also let them see the future direction of development.

This year, the cooperation between the company and a large cotton spinning enterprise in the province has been preliminarily completed.

"I expect this downturn to last until next year.

In the process of industry pformation and upgrading, small enterprises usually can not afford to go through the scale, so that they can save costs and overcome difficulties.

At the same time, in the doldrums, the overall cost will also be reduced.

Hong Chao Kong said.

According to him, if Belgium equipment is imported this year, it will save about 20%-30% of the cost in October last year.

On the other hand, strong alliance will enable two enterprises to share resources and complement each other.

Many people in the industry expressed a wait-and-see attitude towards the expansion of this trend.

They believe that the expansion of opportunistic expansion has a certain effect on the development of enterprises, but it also depends on the actual situation of enterprises and can not be blind.

Related links

Import tariff reduction of some textile materials

In order to further expand the import of advanced technology and equipment, key components and energy raw materials, promote the balance of foreign trade, ensure the smooth operation of domestic economy, and strengthen the construction of domestic disaster relief and emergency supplies reserve system, since July 1, 2011, China has substantially lowered the import tariff of gasoline, diesel, aviation kerosene and fuel oil. At the same time, it has also lowered the import tariffs of tents, inflatable mattresses, life jackets, gas masks, radar life detectors and other relief items, such as textile materials such as blended fabrics, linen yarns, non-ferrous metal materials such as zinc ingot and nickel scrap, as well as daily necessities such as color glasses.

This tax reduction involves 33 items of tax items, mainly energy and raw materials.

Among them, the tariffs on chemical fiber blended unbleached cotton fabrics were reduced from 12% to 6%, and the tariff rates of other textile materials tents were reduced from 14% to 7%.

As soon as the policy message came out, the main contract of cotton futures fell again.

However, many people in the industry say that in the long run, the reduction of import tax is conducive to the reduction of production costs by some enterprises that purchase raw materials for processing and production, which is conducive to the restructuring of enterprises, which is good for the textile industry.