How Can Small Textile And Garment Enterprises In Pearl River Delta Survive?

In recent months, the textile and garment enterprises in the Pearl River Delta have been hit by the European debt crisis, the rising price of domestic raw materials and the rising labor costs. Especially the small and medium-sized traditional labor intensive textile and garment enterprises bear the brunt. Textile and garment industry is one of the three traditional industries in Enping. What is the impact of the textile and garment industry? How should we break through in the predicament?

Sharp reduction in orders

Small businesses cut production or even stop production

Responsible persons of many small textile and garment enterprises reflect that this year, the orders of international buyers, especially those of European Union countries, have declined significantly. Some enterprises even have to stop production or even shut down because they can not get orders.

Enping Yi Dan Hua Clothing Co., Ltd. is a clothing manufacturer which mainly produces children's garments, and has more than 200 employees. In the 10 years since its establishment, the company has undertaken children's clothing production according to the design requirements of foreign businessmen, and the products are sold to the EU, the Middle East and some parts of the United States and Canada.

When he saw Feng Jinfan, general manager of the company, he was visiting the workshop, and he communicated with his employees at different times to understand the production status of each process. This is also a habit he has maintained for 10 years to strengthen communication with employees and keep abreast of product quality.

"Compared with other manufacturers of the same size, we can still keep working hours. We are lucky. But now we are facing more and more pressure, and orders are greatly reduced. The prospect is worrying." Feng Jinfan said that clothing production is generally out of season. In October and November each year, this is the peak season for summer booking production, but this year's orders fell by more than 40% compared with the same period last year. In response to this situation, their company has held several meetings to discuss strategies.

Subsequently, Feng Jinfan presented two registration forms to reporters. "In the same period last year, we received 266180 orders for the first time in the summer of 2011, and only 160958 orders were received this year, with a total shortage of more than 100 thousand. Like our labor-intensive foundry enterprises, the profit margins are very small. If the total production volume fails, the survival and development of enterprises will become more and more serious. Feng Jinfan said.

Reporters then interviewed a number of small textile and garment enterprises in the city. The factory directors generally reflected that this year's orders for international buyers, especially those of EU countries, had declined significantly. Some enterprises even had to stop production or even shut down because they could not get orders.

"According to what I have learned, Hongsheng and Xin Lian have more than 300 garment manufacturers. Our small businesses are low risk and highly dependent. Once foreign orders are scarce, we will have to cut production or even stop production. A small textile enterprise official who did not want to be named told reporters.

One disaster after another

Rising costs, squeezing profit margins

The European debt crisis has already cast a shadow over the European Union and even the world economy. However, the price of raw materials has been rising and fluctuating greatly, making small textile enterprises even worse.

Why can small textile enterprises fall into such a predicament?

According to reporters, Enping's small and micro textile and garment enterprises are mostly processing trade business. Because these enterprises do not have their own brands, they are mainly engaged in OEM production and directional processing for foreign businessmen, and fixed customer processing. Therefore, the spread of the European debt crisis made them the first to be affected.

"I think there are several major factors that have led to the difficult situation for small and micro garment enterprises." Feng Jinfan told reporters that the European debt crisis had already cast a heavy shadow on the EU and even the world economy, but the price of raw materials increased and fluctuated greatly, which undoubtedly made them worse.

"For example, in February last year, the price of 40 combed pure cotton yarn was 25 thousand yuan per ton, but by November last year, the price of this kind of cotton yarn has increased to 50 thousand yuan per ton, and it has doubled. Now, the price of this kind of cotton yarn has dropped to 33 thousand yuan per ton, fluctuating frequently and greatly, and the RMB exchange rate has risen, and the pressure of appreciation has been greatly affected. This has led to the emergence of many manufacturers who dare not take up the bill and the customers dare not place the order. Feng Jinfan believes that in addition to the rising price of raw materials, the increase of workers' wages has reached 10%-15% in recent years, and social security expenditure has increased by nearly 20%. The cost of production and operation of enterprises has been rising, the profit margins are becoming less and less, and the competitiveness of the production and processing of customers has been lost. The rapid development of textile and garment industry in Southeast Asian countries, such as Vietnam and Bangladesh, which is more prominent in labor price advantage, has led to the loss of orders in our European and American markets.

In addition, with the European debt crisis spreading from the periphery countries of the euro zone, such as Greece, Ireland and Portugal, to the core members of the euro zone, such as France and Belgium, the consumer confidence index of the euro area and the European Union has declined. Consumers are pessimistic about the future economic situation and the demand for consumption has declined. This has also led to the shrinking of the forecast of the sales market in the EU region. The wait-and-see attitude has been strengthened and the orders have become more conservative.

"Once foreign businessmen tighten their forecast and reduce orders, enterprises will have to face the problem of cutting production and shutting down production." According to people.

Be in a dilemma

How to transform and develop small businesses?

If the small and medium-sized textile enterprises want to turn the sales market back to China, the market competition pressure will be greater and the production cost will increase significantly. Because they have to recruit talented people to set up their own design team, and train the salesmen who are developing the market and raise funds to develop the market and sales channels.

Small textile and garment enterprises have been "struggling" and even some individual enterprises have been phased off. Why do they not adjust the market and turn the sales market to domestic or other regions? Feng Jin, general manager of Enping Yi Dan Hua Clothing Co., Ltd., analyzed the dilemma that their enterprises are facing.

In the past, they had been manufactured according to the design samples of foreign businessmen. The enterprises themselves did not have a design team, and in the past, they were already full load production because of foreign orders alone, so they had neglected the development and cultivation of the domestic market.

"Foreign customers usually pay the deposit on time and in advance before ordering. After shipment, the rest of the money is placed immediately. We hardly need capital turnover. Frankly speaking, small businesses like us do prefer to cooperate with foreign businessmen in doing business, and because of this reason, we seldom consider the cultivation of domestic market. " Feng Jinfan said that if they want to turn the sales market back to China now, they will face greater market competition pressure and increase production costs. Because they have to recruit talented people to set up their own design team, and also to train salesmen in the market and raise funds for developing marketing channels, which is an "unbearable thing for them". In addition, loans and financing difficulties, enterprises to increase capital and expand production, transformation and development is not an easy thing.

"We have considered that, like our type of enterprises, it is not practical to turn the sales market back to China now. Therefore, after our company's meeting, we still prefer to put our hopes on the channels to open up new overseas customers. Feng Jinfan said. But in the current world economic environment, it is not easy to open up new customers abroad. Therefore, some individual colleagues had to close their businesses and turn to other industries.

Steady growth

Enterprises above designated size are not affected very much.

From 1 to September this year, the gross domestic product value of textile enterprises above Designated Size in Enping was 1 billion 700 million yuan, an increase of 26.58% over the same period last year, 1 billion 343 million yuan. It can be seen that the entire textile industry in Enping has not been affected by the European debt crisis, and the total production has declined. Textile Enterprises above Designated Size have even maintained steady growth.

Has the uncertainty that the European debt crisis has brought to the world economy has already affected the entire textile and garment industry of Enping?

According to the relevant person in charge of Enping industrial and commercial bureau, the rise of Enping textile and garment industry began in the 80s of last century. In 1985, the textile and garment industry of the city had a glorious history with the completion of the first national advanced Sino foreign joint venture company, Canton Canton Textile Co., Ltd.. Under the radiation of Enping's "leading dragon", Enping's textile industry has developed rapidly and its scale is growing. In recent years, there are many famous manufacturers in Hongkong to invest and build factories in Enping, such as Hongkong Jinfeng weaving and dyeing Co., Ltd., Hongkong Li Xing Qiang Textile Enterprise Co., Ltd., Hongkong Jinxing textile printing and dyeing Co., Ltd., Guangdong Burton Fashion Co., Ltd., Guangdong Heng Wei dress Development Co., Ltd. At present, there are more than 120 textile and garment enterprises in the city, of which 28 are over scale enterprises, and the industrial chain is extending continuously, forming a production pattern from spinning, knitting, weaving, chemical fiber, dyeing and finishing, garment making to textile machinery. The main products are all kinds of cotton yarn, knitted fabric, denim, chemical fiber non-woven fabric and various kinds of garments.

According to statistics, from 1 to September this year, the gross domestic product value of textile enterprises above Designated Size reached 1 billion 700 million yuan, an increase of 26.58% over that of the same period last year. It can be seen that the entire textile industry in Enping has not been affected by the European debt crisis, and the total production has declined. Textile Enterprises above Designated Size have even maintained steady growth.

Subsequently, the reporter interviewed a number of textile enterprises above designated size. The responsible persons of these enterprises reflected to reporters that because their own industrial chain was more complete, and had their own brands and relatively perfect sales channels, the products were not solely dependent on export sales, but also had a relatively large sales market in the country. Although they were affected by the European debt crisis and other international factors, they promptly adjusted their coping strategies, so the impact was not serious. However, in recent years, due to the price fluctuation of raw materials, the increase of production costs and the shortage of labor force, their pressure on production and operation has begun to grow larger and larger.

Guidance and support

Help small businesses "break out"

The Enping Municipal Bureau of letters is planning to set up a special fund to support the development of small and medium-sized enterprises to the Enping municipal government. In addition, it will further set up a platform for enterprises and banks, encourage banks to launch more flexible and loose credit businesses. Meanwhile, it will continue to do well in service work, guide enterprises to carry out technological innovation, increase pressure on enterprises to deal with market competition and risks, encourage enterprises to create their own brands and implement brand development strategies.

In view of the impact of the European debt crisis on China's textile and garment industry, the Enping Municipal Bureau of letters has been paying close attention, especially to the impact of small and micro textile enterprises in the city. The Bureau attaches great importance to it, and has recently set up a special research team to conduct in-depth Research on textile enterprises, understand the development and difficulties and problems of enterprises, listen to the views of enterprises, and discuss strategies and solutions with enterprises.

According to the relevant person in charge of the industrial stock Bureau of the Bureau, the whole textile and garment industry in Enping is relatively perfect because of its better industrial chain and better foundation. This year's total output growth is relatively stable. However, the leading role of the leading enterprises is not obvious. Small and micro enterprises have a single sales channel, individual enterprises' orders are reduced and the profit margins can not be maintained.

In response to these circumstances, the Council is planning to win the Enping municipal government's efforts to set up a special fund to support the development of small and medium-sized enterprises, with a focus on supporting loans for small and medium enterprises, and encouraging enterprises to increase capital and expand production.

In addition, the board will further build platforms for businesses and banks, encourage banks to introduce more flexible and flexible credit businesses, increase lending to enterprises and broaden the financing channels for enterprises.

At the same time, we should continue to do well in service work, guide enterprises to carry out technological innovation, increase the pressure on enterprises to deal with market competition and risks, and strive for the support of superior policy funds, encourage enterprises to create their own brands, implement brand development strategies, and enhance their own right to speak in market competition.

In addition, they suggested that the government should make a long-term overall plan for the whole industrial structure of Enping and optimize the industrial structure. The relevant departments should increase support and guidance to textile and garment enterprises, not only to expand the scale, but also to make more planning considerations on technological innovation and product transformation. Enterprises should also think of ways to widen and expand marketing channels, and increase domestic sales planning when export is blocked.

In order to deal with the impact of the European debt crisis, the Enping Municipal Bureau of letters yesterday organized several textile enterprises to participate in the 100th Textile Fair in Guangzhou Pazhou Exhibition Hall, so that enterprises could catch business opportunities through the platform of the exhibition. In addition, organized enterprises participated in the seminar on "common and restricted material requirements for textiles and garments in Europe and the United States and updated interpretation of recent regulations" to help enterprises avoid export trade fortress and risks.

"We also hope that the relevant departments can do a good job in the current period of service, minimize interference with enterprises, and effectively solve the problems of business difficulties and complicated procedures, and work together to help enterprises tide over difficulties." The person in charge said.