India: Textile Industry Needs Export Interest Subsidy

According to media reports, Crisil, a credit rating agency, has suggested that export interest subsidies should be provided to the spinning industry.

According to the interim report requested by the Texpreneurs forum, a report was submitted to the Minister of Commerce Nirmala Sitharaman last week, and the level of textile NPA rose. Profit before interest tax depreciation and amortization Decline and net profit margin (net loss of most factories) and credit rating decline.

"If this trend continues, the next stage of the decline in the spinning sector will lead to a major crisis in the rural commune, because the annual cotton output in the country is increasing," the report said. Although under normal circumstances, the government believes that spinning has good organization and self sustainability because of the past two years cotton The volatility and subsequent China's sustained development have made 2011-2012 historical losses, while the new capacity of the spinning industry has increased to "independent" operation. Spinning mill "Finance has created big trouble," it said. There is only a limited export potential for cotton products, because only 10 countries will import cotton. It is reported that if it is yarn, the export potential is even more because it can reach more than more than 60 countries, indicating that cotton cultivation is directly related to the health status of the spinning industry.

Related links:

Businesses in Europe and the United States and the Middle East are not doing well. Many shoe companies are turning their eyes to the African market. According to statistics from Wenling Office of Taizhou entry exit inspection and Quarantine Bureau, as of the end of February 2015, the footwear products exported to Africa by the Wenling Municipality (the African countries which reached the pre shipment inspection agreement with China) reached 37 batches, with an amount of US $2 million 255 thousand, an increase of 428.6% and 446% respectively over the same period last year.

"In the past, Wenling shoe companies always focused on Southeast Asia, the European Union, the United States and other places. But in recent years, under the pressure of the world economy, many shoe companies have begun to move towards this emerging market in Africa." Taizhou entry-exit inspection and Quarantine Bureau Wenling office responsible person said, now, exports to Africa, Wenling shoe enterprises have more than 20.

It is reported that African customers demand fast updating of shoes and other products, and in addition, the demand for shoes is large in African countries. It is essential to set up marketing points locally based on the African market. This is how many shoe companies are trying hard to develop new overseas markets. These large or small overseas marketing outlets have sprung up in emerging markets, to a large extent, making up for the reduction of orders in traditional markets.

"Many shoe companies in Wenling have set up marketing points directly in Africa, and in today's increasingly thin profits, they avoid intermediate links. This is also a way to maximize profits." Taizhou salon Footwear Company Limited said that last year, the salon footwear industry exported more than US $1 million to Africa.

"The shoes exported to Africa in Wenling are mostly low and medium grade. The average price of a pair of shoes is not more than 3 dollars. A Wenling shoe enterprise boss told reporters.

It is worth mentioning that the African market is surging despite strong momentum. "Exports of African shoes homogenization vicious competition is more obvious, coupled with the sharp rise in production costs over the past few years, corporate profits are becoming thinner, export price advantage gradually lost, a large number of orders began to flow to Vietnam, Kampuchea, Malaysia and other countries." Taizhou entry-exit inspection and Quarantine Bureau Wenling office responsible person said.

A famous sportswear brand official told the "international finance daily" that the African countries' standards for importing Chinese shoes were not as good as those of Europe and the United States, but as the cost became higher and the profits became thinner and thinner, enterprises must attach importance to this problem.

The relevant departments also reminded that enterprises should still keep a clear understanding of the large increase in the output of non products, and engage in the production of low-end products, which are short-term benefits, which will ultimately be harmful to the long-term development of enterprises and even the transformation of industries. How to transform the "sunrise industry" from low grade to high technology, high quality and high added value is the next question for Chinese shoe enterprises to ponder.

This is indeed the case. Despite the rapid growth in China's footwear exports since last year and the sharp rise in orders for enterprises, the export unit price is not high, and the profit margins of enterprises have declined.

In this regard, Dai Jingshui, chairman of Shunchang shoe industry Co., Ltd., Nanan, Fujian, regrets: "since 2013, the unit price of export shoes has been going down all the way. In 2014, it has fallen by at least 3%, while raw materials and labor costs are rising simultaneously, with profits falling by 5%. In this case, the sales volume of 2014 is rising, but the profit is not even, even worse than 2013. "