Zhejiang Textile Enterprises Seek New Breakthroughs Through The New Strategy

The severe wind and rain in 2008 has greatly affected the long survival mode of Chinese textile industry.

Recently, the Executive Council of the State Council deliberated and passed the adjustment and revitalization plan of textile industry and equipment manufacturing industry in principle, and the export tax rebate rate of textile and garment increased from 14% to 15%.

The news made Zhejiang textile enterprises feel warm.

"It's too timely for this benefit."

After knowing the news for the first time, Li Jianhua, CEO of Wan Shi Li group said.

Under the current international background, many textile enterprises in Zhejiang, a big foreign trade province, say that the export tax rebate rate has been raised, giving great support to entrepreneurs both in terms of policy and confidence.

Can the textile and garment industry successfully walk through the economic cycle in 2009?

The export tax rebate rate has been raised by entrepreneurs. "Generally speaking, the tax rebate rate has increased by 1 percentage points, and the profits of foreign trade enterprises can increase by 1 percentage points."

Li Jianhua said.

This is the third tax rebate rate for textile exports since last year.

Wan Shi Li's garments are mainly exported to the US and Europe. Last year's exports amounted to about 60 million US dollars.

Daly group is one of the largest textile and garment enterprises in Hangzhou. The increase in tax rebate rate of one percentage point is equivalent to an increase in profits for the company.

Fei Jianming, CEO, told reporters that "last year exported 100 million US dollars, the tax rebate rate of one percentage point would probably save 6 million 800 thousand yuan."

Textile industry is one of the pillar industries in Hangzhou. According to Statistics Bureau, the total output value of textile industry above Designated Size in 2008 was 178 billion 200 million, accounting for about 1/5 of the total industrial output value.

The dependence on foreign trade of Hangzhou's textile industry has reached about 30%, and last year's export delivery value exceeded 40 billion 600 million yuan.

The export tax rebate increased by 1 percentage points, equivalent to an increase of 300 million yuan in revenue for enterprises, said the head of the textile department of the Municipal Economic Commission.

The above analysis shows that the significance of raising the export tax rebate rate is not only reflected in the income of enterprises, but also on the current employment and social stability.

Hangzhou has more than about 1200000 of the total employed population in the industrial sector above the total scale, and only 300 thousand of the textile industry alone.

The increase of tax rebate rate alleviated the pressure of layoffs caused by insufficient orders.

Analysis of the industry, the tax rebate rate increased by 1%, less than 3 percentage points of the industry's expectations, there is room for further improvement this year.

The situation is still grim. The textile enterprises are going to be "strong" against the current situation. For the current Zhejiang textile enterprises that are struggling, they will still face the grim situation of global economic turbulence, slowing domestic economic growth and their own difficulties.

Under the pressure of the US economic slowdown and the acceleration of RMB appreciation, many textile enterprises have slowed down their exports and their profits have fallen sharply. In addition, the textile industry, whose gross profit margin is only around 10%, has plunged into the "zero profit" dilemma due to the sharp rise in the cost of electricity, freight, labor and water charges.

Some experts pointed out that at present, the profit margin of 2/3 in textile industry is only 0.62%.

According to the statistics of China Textile Industry Association, the total profit of textile industry above designated size was 104 billion 200 million yuan from 1 to November last year, the growth was negative 1.77%, and the industry deficit expanded from 16.97% to 20.44%.

The situation of textile economic operation in 2009 is still not optimistic.

An obvious phenomenon in Zhejiang province is that the number of enterprises in the textile and garment industry ranking among the top 100 enterprises in Zhejiang is also decreasing: from 16 in 2002 to 7 in 2007, the decline is more than 56%.

The more difficult it is, the better time to cultivate talents.

The head of the red sun Wool Textile Co., Ltd. said that they did not cancel normal wage adjustments because of the decline in profits.

In September last year, the company raised wages according to the plan, and the average monthly wage of the front-line workers increased by about 15%, which not only kept the employees, but also attracted some senior technicians.

The products of Zhejiang fester Garments Co. Ltd. have many agents in the UK.

"Under the current economic crisis, we want to find and acquire a troubled British brand and seek deeper cooperation. Now is the opportunity to launch."

The company said.

Some experts also pointed out that the increase of export tax rebate rate can only play a short-term role for enterprises. The appreciation of RMB and the rising cost are the heaviest burdens on enterprises.

The decline in export growth and the slowdown in domestic sales will continue to affect the operation of enterprises in the long run.

On the one hand, the recovery of textile industry depends on the stability of the European and American economies, and on the other hand, it depends on the improvement of the domestic market. Therefore, the road to recovery of the textile industry is relatively long.

To coordinate the two markets at home and abroad to find a new way to break through, in addition to the tax rebate rate, the textile industry revitalization plan also includes four major aspects.

It includes helping enterprises expand two domestic and international markets, expanding domestic consumption, strengthening technological pformation and independent brand building, cultivating well-known brands, speeding up the elimination of backward production capacity, giving preferential support to enterprises with difficulty in Annexation and reorganization, and optimizing regional distribution.

Wang Yuejiang, general manager of Zhejiang Yao Guang Textile Co., Ltd., said that in the existing textile enterprises, there are still some small-scale enterprises using very old production equipment, production and operation is in a state of capital preservation or small profits, it is necessary to eliminate or upgrade technology.

As early as two years ago, it was a rainy day to shift the vision to the domestic market. The proportion of domestic sales accounted for 30%~40%, which not only effectively avoided the impact of overseas markets, but also found a new growth point for the company.

Last year, domestic profit increased by 150%, and foreign trade increased by only 10%.

Zhejiang new big group, located in Binjiang District, Hangzhou, has chosen a new road early, and its investment target has shifted to Southeast Asian and African countries.

Together with 6 other textile and downstream enterprises, the Vietnamese American group set up a textile development zone in Nigeria, basically forming the industrial chain from spinning, weaving to knitting and complete sets.

Hangzhou has a large number of textile and garment enterprises such as Jiangnan Buyi, Akimizu Ito, Wan Shi Li, Daly, Jin Fuchun and so on.

For them, revitalization planning has brought a good opportunity for low-cost expansion and brand building.

Daly group has already had a preliminary acquisition plan this year, and its own brand August Silk, which is set up for foreign market companies, has now been registered in Hangzhou.

Fei Jianming said that after the pformation and upgrading, domestic sales should rise to 50%.

Wang Xiaonan: editor in charge