Taizhou Sewing Machine Industry "Earthquake"

"2008 will be the year for sewing machine industry to shuffle.

Two or three years later, it is impossible for everyone to pick up a screwdriver to make a sewing machine.

Unlike in previous years, the era of "everyone making money" has passed.

In the spring of 2008, fate pushed the two 46 year old sewing machines in Taizhou, Zhejiang, to the center of the storm.

In April 22nd, ZOJE (002021.SZ) announced that, because the company's largest shareholder ZOJE Holdings Group Limited illegally occupied funds, ZOJE shares may be implemented to withdraw risks.

A week later, a quarterly report released in 2007 with the annual report of ZOJE shares showed that the revenue of the current company fell by more than 30% over the same period last year, and the profit dropped by nearly 80% compared with the same period last year.

This spring has also made Taizhou's sewing machine industry banner, Qiu Jibao, the head of the leap Group.

Data from Taizhou Customs show that in the 1-4 months of this year, the export value of the leap Group was US $18 million 480 thousand, down 44% from 33 million US dollars in the same period last year.

Many enterprises in the industry do not have a good time.

Not long ago, Tianjin's flying horse company came to ZOJE to talk about its business status. The former revealed that it was almost the same as ZOJE.

As a matter of fact, for most enterprises, it is just the ups and downs with the changes of the industry, far from becoming an enterprise that surpasses the cycle to become the Pearl on the crown.

Back in 1994, Cai Kaijian, 32, founded ZOJE sewing machine Co., Ltd. in Zhejiang. Before that, Cai Kaijian had entered the sewing machine industry for two years. Two years ago, ZOJE was formerly called Yuhuan Zhongda Industrial sewing machine factory.

At that time, Cai Kaijian spent 100 thousand yuan from the Shenyang Institute of light industry, which had worked together for many years, bought the patent of the packaging machine. Cai Kaijian's "flying wind" brand became the designated product recommended by the Ministry of light industry at that time.

When ZOJE was born, Qiu Jibao, a shoe maker in Yuhuan, has built up his flying sewing machine group in Jiaojiang, a hundred miles away.

In fact, the local sewing machine industry has begun to take shape at this time.

As early as Qiu Jibao in Northeast shoes shoal in 1979, Jiaojiang, Taizhou Chen Chen Guan Kangren and several other young people in Shanghai found that the edge machine is very tight, so borrowed money to buy a hemming machine, after disassembly and research, Jiaojiang first industrial sewing machine factory produced the first three line hemming machine and has been a great success in the market.

The power of example is endless. Then the sewing machine industry takes root.

The birth of Qiu Jibao's second industrial sewing machine factory has gone through 7 years.

In fact, at this stage, because the cost of production at various stages of China's reform is far lower than that of foreign countries, the industrial pfer of sewing machine industry has quietly started.

When Qiu Jibao put his eyes on the sewing machine, foreign sewing machine manufacturers began to invest in China, and Japan's Pegasus sewing machine manufacturing Co., Ltd. set up Tianma sewing machine manufacturing Co., Ltd. in Tianjin jointly with Tiangong sewing machine company.

After that, some well-known international sewing machine manufacturers have invested in China, including Shanghai heavy machinery, SINGER, Qixiang, heavy machinery emerging, Fuma, nine dimensional, Hebei industrial sewing, 100 Fu, Jaeger Le Coulter, and so on.

The low cost advantage makes China's sewing machine industry expand its vast market space.

For the sewing machine industry, a greater benefit is also encouraged by national policies.

In February 18, 1994, the state promulgated the regulations on the administration of tax refund (Exemption) for export goods, and established a tax refund (Exemption) system based on the new value-added tax and consumption tax system. The zero tariff rate of export goods was determined, and tax rebates for export enterprises from production to circulation and purchase were stipulated.

It is also in this year that China ended the two-stage exchange rate coexistence of official exchange rate and adjusted exchange rate for 14 years, which was unofficially linked to the US dollar, and the exchange rate was finally determined from the initial 1:2.80 yuan to fluctuate in the range of 1 US dollars to 8.27 to 8.28 yuan.

During this period, the state once encouraged all kinds of foreign trade.

In 1996, China announced the soft landing of the economy and the end of macroeconomic regulation.

Money has also eased, lending interest rates have fallen by 20% from its peak in 1995.

The implementation of these policies has greatly improved the development environment of China's sewing machine industry. Sewing machines have been rising rapidly from the negligible proportion of global production.

Sewing machine industry has gone through "golden 10 years" since 1994.

2004 was the hot year for sewing machines in Taizhou.

In this year, ZOJE's ZOJE shares successfully landed on the SME board and became the first local sewing machine company to be listed.

After the listing, ZOJE shares changed nearly 70% of the debt ratio, but also increased the financing capacity.

Qiu Jibao was also elected the first year of the Zhejiang businessmen, and he also won the title of "China's reform figures in the new century".

In fact, during the "fifteen" period, according to the statistics of sewing machinery industry association, the industry achieved an annual average growth rate of 26% output value and a 25% growth rate of earning foreign exchange.

In 2004, it was just in the middle of a long boom.

The greater good is that in January 1, 2005, the problem of textile and clothing quotas went to China for many years (at least a lot of people thought so) at that time. China's exports of these two categories of commodities will increase sharply.

Correspondingly, the original qualification for import and export business has also been changed from the examination and approval system to the registration and approval system.

Many enterprises are preparing for this, and the sewing machine industry is also one of the beneficiaries of this trend.

The two Cai Kaijian and Qiu Jibao appear frequently in the public view.

However, behind the flashbacks, the future space of the industry is obviously less optimistic than the surface.

If in the past 10 years in China, the sewing machine industry was facing a huge market space, and by 2004, it was already in a great hurry.

ZOJE's prospectus provided a piece of data. At that time, the total annual output of sewing machines in the world was about 17 million, of which China accounted for about 50% of the total output.

This also means that from the quantitative point of view, China's sewing machine industry has not much room for improvement. A simple understanding is that output can only be doubled at most.

The road to technological upgrading is even more difficult. In 2001, ZOJE's gross profit margin had exceeded 30%. Due to the intensification of competition, the gross profit margin in 2004 has been reduced to 24.53%.

In January 1, 2004, the export rebate rate of sewing machine products dropped again, from 17% to 13%.

The decline is not big, but it is totally different from what it used to be.

China's macroeconomic environment is undergoing important changes at that time.

At the end of that year, China's foreign exchange reserves amounted to 609 billion 900 million US dollars, ranking second in the world.

This also forced China to passively put in many basic currencies. The result is that money has become an extremely accessible resource and cheap factories have sprung up.

As a result, China's factories are also facing a shortage of resources, and the price of resources has begun to rise sharply in the international market.

The lowering of the tax rebate rate has opened the curtain of macroeconomic regulation, and interest rates have also started to rise.

In October of that year, the central bank announced that interest rates for one-year deposits and loans had been raised by 0.27%.

Besides the two swords, the appreciation of RMB has finally started after nearly two years of controversy.

In July 21, 2005, the RMB exchange rate changed to a basket of currencies. The exchange rate was changed to 1 yuan to 8.11 yuan, a 2% appreciation in disguise, and no longer linked to the US dollar.

Since then, the central bank has issued a notice to expand the floating rate of RMB non US dollar currencies in the inter-bank spot foreign exchange market for the two time.

The days of sewing machine industry are pressing.

After the export tax rebate rate was cut again, the industrial cycle recession came.

In October 2007, almost instantly, the situation in the sewing machine industry turned direct.

At the same time, news of a large number of enterprises in the downstream garment industry ceased production.

The long boom of the shuffle makes the industry full of large and small sewing enterprises.

As the largest producer and exporter of sewing equipment in the country, Taizhou has a large production enterprise group, which has always been the weathervane of industry adjustment.

Public information shows that in the first quarter of this year, the total output of Taizhou's sewing equipment scale enterprises was 1 million 15 thousand and 600, 15.3% lower than the same period last year, and the output value and efficiency also showed a significant decline.

In May of this year, the Taizhou Economic Commission has issued a special document to solve the difficulties in the sewing industry, including the leap Group.

In another document, the Taizhou sewing equipment industry association concluded that the downturn in the sewing equipment industry was attributed to "a series of negative factors such as the rapid increase in raw materials and energy prices, the adjustment of domestic garment industry, the appreciation of the renminbi, the reduction of the export tax rebate rate, the increase in labor costs and the subprime mortgage crisis in the United States since the second half of 2007".

In the survey, many enterprises in the industry admitted privately to the Zhejiang businessmen that they did not really master the core technology. A typical example is that the sewing machine industry in China can only dominate the scale now, and the output value is not large enough, even though the total export value is not as good as the total import value.

However, the industry will usher in new integration in mergers and acquisitions, macroeconomic regulation and control is more like a propeller.

Jack, vice chairman of the group, is looking forward to the future. According to the current situation of the sewing machine industry, the output value of the low-end products in high schools is roughly 3:3:4, even if the share of ZOJE and Jack is only 12%, compared to 60% of the high-end market, the future potential is huge.

A report entitled "speeding up industrial upgrading in Taizhou's leading industries" also pointed out that at present, Taizhou industrial sewing machines are pferring to high-grade and multi-functional special models.

"This industry can not accommodate so many enterprises.

Like Japan, a few companies now have a clear division of labor, "Pegasus" is the main sewing machine, the "heavy machine" is the sewing machine, and the "brothers" is the high-end sewing machine and sewing machine.

"2008 will be the year for sewing machine industry to shuffle," said Mr.

Two or three years later, it is impossible for everyone to pick up a screwdriver to make a sewing machine.

Unlike in previous years, the era of "everyone making money" has passed.