2011 Overlay &Nbsp; Textile And Garment Enterprises Are Hard At The End Of The Year.

Entering the winter, textile and garment enterprises in Keqiao, Shaoxing found that their electricity tariff settlement is changing.

In the past, factories here turned over electricity bills on a monthly basis, but in the past two months, they had to pay electricity tariffs every 10 days.

The reason for this change is that the power companies are worried about the textile here.

From the recent visit to Zhejiang textile and garment enterprises by the Securities Times reporter, textile and garment enterprises have experienced the sudden cold and hot changes in the market in the past year.

After a brief glories in the first half of the year, orders fell sharply, inventory pressure was huge, labor costs rose, and the renminbi was rising.

Manpower costs rise and profit

Sijiqing, Hangzhou, is known as "the first street of Chinese clothing", while Hangzhou, Xiaoshan, Keqiao, Huzhou, Shengzhou and other textile and garment industrial parks are the backing behind the reputation of Sijiqing.

Zhejiang Xiangrun Garments Co., Ltd. is a large garment manufacturer in Xiaoshan Industrial Park. Zhang Yue Quan, vice president of the company, told reporters that as an export oriented garment enterprise, the gross profit will not exceed 10% at present. Net profit will also be 4%~5%, appreciation of RMB, increase of labor cost and change of raw materials. The impact of these three will be very fatal to export garment processing enterprises.

This is not just Zhang Yuequan's own dilemma.

In textile and garment enterprises in Shaoxing, Shengzhou and Huzhou, Zhejiang, a number of business executives told reporters that many factors such as rising labor costs, appreciation of the renminbi, fluctuations in raw material prices and the growth of financial costs caused many enterprises to get into trouble. Among them, the impact of labor force rising cost was the most. Only a year ago, some enterprises increased their wages by 20%.

In 2009, the average wage of operating workers was 1900~2000 yuan per month, and by the end of 2010, their average wages rose to 2600~2700 yuan per month by the end of 2010, and the average wage of workers at the end of this year had increased to 3000~3100 yuan per month.

At present, the number of workers in the company is 1800~1900, that is to say, the cost of labor alone is 20 million yuan more than that of 2009.

Even for a large garment enterprise with nearly 2000 people, 20 million yuan is by no means a fractional sum. The rise in human cost alone may eat up most or even all of their profits.

Yu Xueyi, general manager of Zhejiang Haide Garments Co., Ltd., the largest trousers manufacturer in Hangzhou, told reporters: "in the domestic textile and garment processing enterprises, the annual profit is more than 30 million yuan.

Take our company as an example. At present, a pair of trousers will earn 4 yuan at most, and this year's output is about 5000000, that is to say, the profit of our factory is only 20 million this year. "

It is understood that for garment processing enterprises, fabric costs account for about 70%~75% (after the rise in labor costs, raw material costs accounted for about 65%~70%).

Now, the raw material cost of the market is almost the same. If the cost of the fabric increases, the price will rise, and the customers will be able to accept it.

At the same time, due to the different labor costs of different enterprises, if customers increase the processing fees on the basis of rising labor costs, customers are generally difficult to accept.

Declining competitiveness leads to shrinkage of orders

As a labor-intensive industry, the rising cost of manpower after the financial crisis has further weakened the competitiveness of domestic textile and textile enterprises, and the orders of many garment enterprises have begun to cool down.

"Now, our competition is no longer a competition with domestic manufacturers, but rather a contest with emerging countries in Southeast Asia.

Last year, we made 6 million 280 thousand pairs of trousers. This year's capacity is estimated to be about 5 million 300 thousand, with a drop of nearly 20%, and next year it may continue to decrease. "

Yu Xueyi told reporters.

It is reported that in the past two years, the garment and textile industry developed by India, Vietnam, Laos, Kampuchea and other countries has formed a scale effect. More importantly, in the textile and garment enterprises of the above countries, their average workers' monthly salary is about 100 dollars (about 631 yuan), while many of the garment enterprises in Zhejiang, their average monthly salary of workers has reached 3000 yuan, plus the insurance of clothing enterprises for employees, as well as the cost of food, housing, pportation and so on, the actual labor cost is about 3500 yuan / month.

Therefore, the labor cost advantage of India, Vietnam and other countries is a great challenge to China's textile industry.

Yu Xueyi said that in terms of quality, the products of domestic garment enterprises are superior to those of garment enterprises such as India and Vietnam.

But for mass clothing products, the quality difference is not very obvious. European and American customers do not care much.

Therefore, some European and American customers entrust orders to garment enterprises in Southeast Asian countries, while some complex and highly ordered orders can only be handed to domestic garment manufacturers.

Data from the US Department of commerce also confirm this.

From January 2011 to August, the total volume of imports of cotton products from Bangladesh, Vietnam and Indonesia increased by 3.35%, 0.97% and 2.45%, respectively, while the total number of cotton products imported from China decreased by 16.61% over the same period last year.

In addition to the shock waves brought by the emerging markets in South Asia, in recent months, the European and American economies have seen bad news frequently, making many garment enterprises in Zhejiang worse.

Yao Qijun, deputy general manager of the company, said: "in 2008, the financial crisis gave us the impression that after October, the situation was not very good, but after 2009, the economy soon recovered. Before September this year, our company's offshore orders were good, but the beginning of October began to reduce orders, and this time it was more obvious.

At the meeting this morning, several European and American orders were cancelled.