China Textile Machinery Association Calls For Industry Self-Discipline To Avoid Low Price Competition For Artisan Spirit.

84 representatives from 56 textile machinery enterprises and institutions in China have voted by hand to adopt the Convention on corporate self-discipline (July 27th).

The scene of the 2016 annual meeting of weaving machinery branch of China Textile Machinery Association was held in Liaocheng province.

When a certain industry develops to a certain stage, it requires self-discipline. This is the behavior of an industry's initial self-discipline, and it is also a sign of the progress of an industry.

Loom industry innovation is weak

After decades of development, our country has grown into a large country of shuttleless loom production.

However, with the continuous expansion of production capacity and intensified competition among enterprises, vicious competition in loom field is becoming more and more serious, especially in air-jet looms and rapier looms, and is spreading to jacquard looms.

The vicious competition is mainly based on price reduction and credit sale. The proportion of the down payment in the industry is becoming lower and the debt time is getting longer and longer. This has seriously hindered the enterprise's innovation and affected the healthy development of the industry.

High end loom

In 2011, the import volume of high-end looms in China remained high during the period of ~2015.

In 2011, 2015 rapier looms were imported and 2561 rapier looms were imported in 2015.

In 2011, 6760 air-jet looms were imported, and the number of imported air-jet looms was reduced to 4305 units in 2015. However, compared with the volume of more than 11000 air-jet looms in China, it is still very large.

In 2010 ~2015, the textile machinery industry identified 156 new products.

58 accounted for 37.8%, 18 of spinning machinery accounted for 31%, 21 of chemical fiber and nonwoven machinery accounted for 13.46%, 18 of printing and dyeing and finishing machinery accounted for 11.5%, and weaving machinery 11, accounting for only 7% of the whole textile machinery field.

There are 720 Enterprises above Designated Size in weaving field, accounting for 20% of the total textile machinery.

In 2011, the textile machinery industry received 89 textile and light technology award, including 26 first prize and two two prize. The awarding of weaving machinery textile lights is not optimistic. There is no 8 prize for the first prize of textile yarn, two prize, and only 13%, and the winners are Heng Tian heavy industries, Guangdong Fengkai, Japan hair spinning machine, Shijiazhuang textile machinery and so on.

Vicious competition endangering

The vicious competition dominated by price reduction and credit sale has made the loom industry profit margins fall sharply, and business risks have risen sharply. It can not better upgrade equipment and keep pace with the adjustment of industrial structure.

Peng Xiaohong, chairman of Changshu textile machinery company, admitted that the textile machinery industry has been very tired and hard in recent years. "Half year quotes" have brought challenges and difficulties to the operation and management of the enterprises.

At present, many of the industry's pressure reduction and credit sale situations are very risky when they do not know the other party's financial statements. Even if they know the other's financial statements, what is the actual business situation of the other side? How will the money be returned? What is the controllability of the market?

Full of uncertainty.

If an enterprise wants to develop healthfully, the capital chain must be protected first.

Li Fengshan, general manager of Pu Sheng Electric, Shaanxi, also said that enterprises should first survive, blindly owe money and reduce profits. What support should they take to develop their enterprises?

In fact, credit sales affect not only the upstream loom industry itself, but also the upstream and downstream industries of the industry chain.

Credit sale is a very bad guide for downstream enterprises: no money can also get things, which is devastating for an industry.

A representative of Liaocheng has received many customers' response. Because of the pressure and price owed by the textile machinery factory, some downstream enterprises that have already been unable to survive and have been eliminated by the market have survived, resulting in the imbalance of downstream ecosystem.

But the paradox of the market is that even if a large amount of credit is sold, textile machinery enterprises are not likely to be able to defend their customers.

As Dai Xiaohan, chairman of Guangdong Fengkai, regrets, no brand has been successful through credit sale, and no high-end brand has relied on low price competition.

The result of credit sale and low price competition is often for the downstream "junk customers" to do "dresses". Once they have completed the original accumulation, a little bit of strength, 90% will abandon the upstream suppliers, and then turn to the more high-end brands, without loyalty.

In addition, the phenomenon of credit sale allows some downstream businesses to get raw materials at zero cost and breed bad credit sales.

Worse still, these ugly actions may also spread abroad.

Chao Jian, chairman of Qingdao PARKnSHOP, said that at present, the foreign market is better, and everyone is rushing to go out. If the vicious competition of domestic enterprises does not improve, it will have the same vicious impact on the foreign market.

There are already 1 years of credit certificate issued by enterprises in India. The original customers in India were concerned about the performance of equipment when choosing equipment, but now they are different. They begin to care about payment methods.

Mr. Beckett, sales manager of Grosz's weaving department, expressed concern that Southeast Asia and other markets are also developing rapidly. If we continue to compete in a vicious competition and the quality of our products can not be improved, then we may lose more international markets including Southeast Asia in a few years.

Good products are fundamental.

Compared with the vicious competition market of domestic textile machinery enterprises, foreign textile enterprises never play price war, and there is no credit sale situation, but their business condition is better.

Wan Zugan, chairman of Zhejiang Wanli, regrets that the textile machinery has been rather sad over the years, and many enterprises are in a difficult situation.

Now that Zhejiang still insists on weaving looms, there are few enterprises such as Wanli, Japan hair and Titan.

There was a gap between the domestic textile machinery enterprises and the foreign enterprises such as Dornier, Bill, and so on. If we go to vicious competition, the gap will be even greater. Even if we can survive, it will be a problem, so vicious competition will hurt everyone.

Now 9 of the 10 arrears may be hard to recover.

Many of the jacquard looms in China are original technologies, which have reached the leading position in the market, but they are also suffering from vicious competition.

This requires enterprises to unite and not to sell on credit, so that they can compete only with first-class brands in the world if they want to earn a bit and eat enough before they eat well.

In the final analysis, the emergence of these situations is due to the fact that the homogeneity of domestic looms is serious and the market supply exceeds demand.

But what really needs to be considered is that there is still a certain gap between the domestic loom and the international advanced looms in terms of high speed and stability.

To this end, Xu Lin, Secretary General of China Textile Machinery Association, called for self-discipline. Weaving machinery enterprises should avoid low price competition, product credit sale, correctly locate product grades, pursue craftsmen spirit, strive for excellence, cooperate closely with customers, truly make products of customers' needs, and achieve mutual benefit and win-win results.

Weaving machinery enterprises are mostly small and medium enterprises, with insufficient funds and small profits. The vicious competition mainly based on low prices and credit sales is to urge enterprises to compete only with the market, and even the focus of some enterprises' development is no longer on the R & D of innovation. This kind of development that looks before the eyes and does not look at the long term is like "drinking poison to quench thirst", and giving up the "chronic poison" of low price and credit sale, so that enterprises can seek sustainable and healthy development.