Rumors Of The Suspension Of The Largest Textile Enterprise In Wei Bridge In Asia

The crisis is still spreading.

A large number of enterprises, because of the global financial crisis that has been held for several months, or falling down, or struggling to maintain, a recent news of the large-scale closure of Wei cotton has pushed the star enterprise that has long been enveloped in the aura of "the world's largest textile enterprise" and "100 strong Chinese enterprises" and so on.

Is it true or not?

Last Saturday, the reporter made a special trip to the Wei Qiao venture group (hereinafter referred to as "Wei Qiao venture") - the headquarters of Zou Wei Industrial Park located in the east of Zouping.

The news that "Wei cotton filed for bankruptcy" was first reported by China's first textile network.

In October 21, 2008, the website published an article entitled "prudent policy is difficult to save textile enterprises in life and death" article, mentioned in the article, "because of the serious losses in the industry downturn, Wei Qiao has filed for bankruptcy recently, but because it is too extensive, and has not been approved by the local government".

In October 31st, a person in charge of "Wei Qiao" was informed that the company was operating normally, and all the production machines were running at full capacity without shrinkage.

Since then, the Propaganda Department of the Zouping county Party committee has also given a similar reply.

In order to get the truth, the reporter went to Wei Qiao entrepreneurship headquarters in November 1st, but the interview request was rejected.

In a telephone interview with Minister Wang surname of the administrative department of the group, Wang repeatedly reiterated the inaccuracy of the relevant bankruptcy reports, and said that he had "declined the domestic media interview requirements" and "would not disclose any information about the enterprise".

After that, the reporter learned the situation from the local residents.

A driver who has been doing taxi business for a long time in the Wei Cotton Industrial Park said, "because of the financial crisis, Wei Qiao's business is definitely not as good as before."

This view has been affirmatively answered by most respondents.

In addition, a number of respondents said they had heard rumors of "bankruptcy petition" and said they had heard that the state had allocated billions of dollars to the Wei bridge venture.

Stop 1/4?

In the east of Zouping coach station, it is a long road which is several kilometers long and several meters wide. People call it "Zou Wei Road".

In the area of several thousand kilometers on both sides of the avenue, Wei Qiao has several textile industrial parks, aluminum plants and power plants.

On the sidewalk on both sides of the Boulevard, 32 groups of people poured in.

Most people are slow and relaxed.

These are mostly young people aged 20 or above.

Reporters interviewed by random access to know that these young people are mostly workers in Wei Qiao pioneering textile park.

22 year old Xiao Liang (a pseudonym) told reporters that he was "on vacation".

He claims to be the workshop mechanic of a spinning department in the first industrial park of Wei Qiao venture. He has worked here for 3 years, and has just been pferred to the regular employee who enjoys all the benefits of the company.

Xiao Liang said that the sabbatical leave began in October.

According to the company regulations, the front-line workers are forced to take a vacation for at least 5 days per month.

Prior to that, Xiao Liang said that there was basically no rest every month, and workers worked 24 hours a day and three shifts.

Xiao Fang, another female worker in the spinning department, has revealed that because of the bad market situation, at present, more than 270 machines in her spinning workshop have been shut down for 70 units.

At the same time, she added, from other textile and weaving workshop colleagues, there is a downtime phenomenon in all the workshops of the entire park, which is about 1/4.

In the next interview, Xiao Liang and Xiaofang's argument were further confirmed.

The above two heads of Wei Qiao venture's "full load operation" is obviously hard to kiss.

At the same time, the employment plan of Wei Qiao business has also stopped abruptly.

A staff member of the group responsible for the reception of new recruits told reporters that the group had stopped hiring for more than a month ago.

Prior to that, because of the frequent entry and exit of factory workers, Wei Qiao launched a year-round recruitment plan.

According to the staff recalled, at the peak time, only the textile industrial park of Zouping city in Wei Mian recruited thousands of new workers at one time.

The employee said that after the production capacity was compressed, the group could not be laid off in principle except for workers over the age of 50.

He said that because textile mills are large and concentrated, once they are laid off, they will not be able to recruit enough workers in a short time when the economic situation improves.

However, he also told reporters that the number of workers in the entire Wei Qiao group (including Zouping Industrial Park, Wei Mian Industrial Park and Binzhou and Weihai parks) has dropped from 170 thousand in the peak period to 140 thousand at present.

Not only is the textile industry, but the related industry has revealed that because of the drop in aluminium price, the other pillar industry of Wei Qiao's business, aluminum industry, has sent most of the workers to home in September. At present, the price of alumina has been rising and has basically returned to work.

If the "downtime 1/4" is true, there is no indication that the crisis will be in the short run, and its operating performance will inevitably be unaffected.

Public data show that the half year report of Wei Qiao textile, Wei Wei Qiao's Hong Kong listed companies, shows that the company achieved a sales income of 8 billion 888 million yuan in the first half of this year and a net profit of 273 million yuan, down 4.1% and 59.3% respectively from the same period last year.

According to China International Finance Corporation's data monthly analysis in September 2008, the decline in net profit of Wei Qiao textile industry was mainly caused by a sharp decrease of 55.4% in gross margin.

Among them, the domestic market revenue was 4 billion 476 million yuan, down 20.3% compared with the same period last year, and the gross profit margin dropped from 17.8% to 11.6%, while the international market income was 4 billion 412 million yuan, up 20.7% compared with the same period last year, and the gross profit margin decreased from 14.1% to 3.5%.

According to the report this month, the reason for the significant decline in the performance of Wei Qiao textile industry is that, because of the rapid appreciation of the RMB and the rising cost of raw materials and energy, the company's production costs have risen sharply; the US and Europe have been depressed, the external demand has slowed down, and the export pressure has increased.

The bargaining power of manufacturers is weak, which is seriously squeezed by the profits of downstream enterprises.

The company is committed to maintaining the group's domestic and international market share and the stability of its workforce, and adopts a strategy of reducing sales, resulting in a further reduction of profit margins.

In September 17th this year, J.P. Morgan also made a judgement on the maintenance rating of Wei Qiao textile.

JP Morgan released a research report, substantially reducing Wei Qiao textile (02698) 08 and 09 year profit forecast 48% and 32%, most of which reflected that it lowered the gross margin forecast, maintained the reduction, and the target price was HK $3.8.

For the current predicament, Zhang Shiping, chairman of Wei Qiao venture, once said to the staff at a middle-level cadre meeting that "even if all the textile enterprises in the country fall down, Wei bridge is the last one".

At present, there are signs that this large private enterprise group striving to become the world's first is indeed experiencing "delicate moments".

For such a place and even a pillar enterprise in the whole country, we hope that it will tide over the difficulties as soon as possible.