Keqiao 64.8% Textile Enterprises Have Been Cancelled Orders, Most Of Which Have Been Cancelled In History.

Foreign trade enterprises will face second waves of pressure. The spread of oversea epidemic has led to a new round of pressure on textile foreign trade enterprises. In the last week of March, China's foreign trade factories are suffering from the second pressure since the outbreak of the new crown. Let's take a look at the following report:

Keqiao 78.4% textile enterprises reduce orders

Shaoxing Keqiao, China Light Textile City opened for half a month, and more than 80% of the operators opened the door to greet guests. Before the epidemic, there were 100 thousand people in and out of the country every day, only ten thousand now. According to a local industry survey report, 78.4% of textile enterprises indicated that orders were decreasing, and 64.8% of enterprises reflected that the existing orders were cancelled by customers.

"Nearly 50% of our business is in Europe. If the epidemic continues to spread in these countries, it will be pointless for us to start. Now we are considering whether to adjust the proportion and focus on the domestic market. " A Textile City owner said.

On the same day, from the China Development Research Foundation's "international economic situation outlook" video conference, information came out: at present, the Yangtze River Delta and the Pearl River Delta have only about 30% of the work done, even though the recovery rate is above 90%, because there is a lack of orders.

In fact, the loss of orders began when tariffs were imposed in May and June last year. A textile company has an American major customer. The order amount in 2018 was US $1 million, and less than 500 thousand in 2019.

Because China and the United States impose tariffs, while Southeast Asian countries such as Vietnam, Bangladesh and Kampuchea are all zero tariffs, customers transfer their orders to Vietnam. Vietnam's textile exports steadily increased in 2019, and it is also the brightest East Asian country in recent years.

In February, because of worries about the epidemic situation and limited traffic, the purchasing managers and designers of some famous brands of clothing industry could not travel to China. Many brands had begun to discuss the transfer of new season merchandise to Turkey.

Hadi Karasu, head of the Turkey Garment Manufacturers Association, estimates that about 1% of China's total orders will be transferred to Turkey. At that time, the new orders have brought Turkey's sewing machines into full operation - the capacity has reached 85%. If Turkey can not complete the technological upgrading of digital transformation and increase production capacity, its textile industry will not be able to accept more orders.

In the first half of March, a large number of clothing stores in Europe and the United States ceased to be open to the outside world. Almost all clothing companies, clothing department stores and clothing electric business companies' share prices were cut short, and a large number of companies' shares fell below net assets. The impact of global epidemic prevention and control on the total market demand has come into being. The textile industry is only a barometer of high sensitivity.

China's foreign trade enterprises, which have just come out of the first wave of pressure to resume production and return to work, will face up to the second pressure: due to delayed consumption, orders shelved or cancelled due to foreign epidemic control, they will have to press the pause button just when they start work. Factory rent and tax paid, wages paid, part of the workers may be laid off... Nearly fifty million of China's foreign trade practitioners are under collective pressure. In 2019, the contribution of China's foreign trade enterprises to GDP was 10%.

In the January and February, China played the first half of the game and the world played the half court in March and April, and became embarrassed under the butterfly effect. In the field of economy and trade, the global supply chain has been cut off because of the epidemic situation.

Caution is needed for export orders in the near future.

With the intensification of the new crown epidemic overseas, the multinational economy is on the brink of collapse, and the textile industry has ushered in the most history of withdrawal and abandonment.

The cloth was on board, but it was cancelled.

An industry and trade integration enterprise that makes the special wide household textile fabric said: "the order concentration has been cancelled recently, because the single volume is very large, our recent general orders come from this customer, this causes our fund pressure to be very big."

A fast fashion brand designated supplier also reluctantly said: "recently, there are so many brands and stores that our orders can not be spared. Just a few days ago, new orders have just been received, and cloth is quickly finished, but these days it has been cancelled again."

"At present, the domestic factories have basically resumed production, and the orders for years ago have been working overtime for more than two months, and they are busy shipping. Suddenly the news that the customer cancelled the order is not a big loss, because the company usually only receives 30% of the deposit from the customer, and the cost is out of reach. " A foreign trader said.

"The demand for textile and garment market is decreasing all the time. It is not just a matter of the United States. Overcapacity and order reduction may be more serious than last year." The trader had a worried look.

In addition to the cancellation of orders, many enterprises also disclosed that as the United States and Europe, many enterprises began to enter the state of remote office and semi shutdown, which had a great impact on the operation of logistics. Now we have to confirm with our customers whether we can accept the goods or not, so that we can greet them in advance and avoid two empty goods. Before the goods arrived in Italy, they were abandoned at the port, and the goods were also withheld by the shipping company. A foreign trade enterprise said.

Zhejiang, a European market leader and chief export operator of men's jackets, said that Europe is becoming a new center of the epidemic. The closure of multinational routes led to poor logistics and serious disruption of exports. At the same time, the epidemic situation in European countries is continuing to spread, residents' lives are affected, local clothing consumption market demand is sluggish, orders decline significantly.

Under the double attack of Sino US friction and the new crown pneumonia epidemic, a carpet manufacturer from Shandong has felt a lot of pressure. The head of the company said that the United States is suffering from more serious epidemics. The exhibition is postponed and the tourism industry is stagnant. The demand for carpet products for local hotels and conference centers is greatly reduced. The newly built hotels may be postponed or shut down. The original meeting rooms will not be replaced with carpets. The market will be affected by Sino US friction. The forehead is compressed again.

At the same time, although export textile enterprises have a higher rate of return, most enterprises still face many difficulties, such as shortage of workers, lack of synchronization in the upstream and downstream industries, lack of protection resources and so on.

At present, there is great uncertainty in the development trend of the global epidemic. The smooth operation of the market is bound to go through a long recovery period. Therefore, export textile enterprises' confidence is frustrated.

The silk weaving enterprises also fought a "price war".

Under the condition of high inventory and low demand, the textile bosses will generally be faced with the pressure of inventory and capital. The grey cloth in the warehouse has already occupied a lot of money. Wages, water and electricity, rents and so on must be paid in cash. In this case, if the gray cloth is not realized, unless the big family is big enough, there will be no pressure on the funds, otherwise the enterprises will not be able to sustain enough cash. In order to ensure the healthy operation of enterprises.

With the suppression of these two mountains, the phenomenon of selling on the market has come one after another, and even the best silk imitated in the near future is hard to escape. A person specializing in the production of silk imitation enterprises said that by the end of 2019, the price of 100D Chiffon was 2 yuan / meter, and now it has dropped to 1.8 yuan / meter. In March, the price of grey cloth was rising and queuing up for goods in March.

This series of withdrawal and abandonment also worried the textile boss, and asked the soul: "is there any business in this year's textile business?"

Appropriately adjusting the ratio of domestic and foreign trade

With the outbreak of foreign epidemic, the textile and garment industry has basically stagnated in the European and American countries, and the textile foreign trade people have been seriously affected. After visiting, many cloth owners have indicated that they will appropriately adjust the proportion of domestic and foreign trade to slow down the impact of the epidemic.

A chief executive of a Italy and Korea order company said: "although we haven't received the notice of cancelling the order this year, the volume in the first quarter has been reduced a lot. Then we will develop the domestic trade well. Now the domestic epidemic is basically under control, and it may be a good opportunity."

Similarly, a boss who made the export of nylon fabric also revealed: "single volume is reduced by 20% compared with last year. At present, the order can be achieved at the end of April. Next, the proportion of domestic trade will be considered more. But domestic trade also has disadvantages. Customers' repayment is longer than foreign trade, most of them are in 3 months or even longer. Therefore, domestic trade is not easy to do. This year's situation is really difficult."

It is true that in the absence of effective control of foreign epidemic situation, it is a good policy to shift the focus of business to the domestic market. But the boss also needs to understand that nowadays the domestic market is already lacking in competition and the competition is fierce. The more the time is, the more the cloth boss should pay attention to the quality of his products, so that he can have enough strength to win in the competition.

Down to start, shift two shifts to three shifts to ensure sufficient cash flow.

It is said that cash flow is the "life and death line" of an enterprise. In the case of new single unsustainable situation, many cloth owners think that for the company, there is no order, that is, no income, but the cost of manpower and rent is difficult to be unloaded. If there is a loan, it will repay the loan and interest every month. Therefore, it is very necessary to reduce expenditure next.

"Next we may reduce production appropriately to ease the pressure on capital and inventory." A factory director who made imitation memory was helpless. "Now the raw material has fallen very badly, and we have not received the new order. We can only produce some conventional varieties, but we use all the raw materials we used to store when the price was high. So we choose to stop half the machine next month. We can't sell too much inventory, instead, we will occupy our liquidity (raw materials are cash transactions)."

Another person in charge of dyeing works also revealed that the working hours of staff could be adjusted appropriately, from two shifts to three shifts. Shorter worker hours and lower wages can reduce labor costs.

Judging from the current market situation, the start-up rate of various factories is slowly rising, but the inventory is slow and the new ones are not smooth. Next, the capacity of the market will be in excess again, and the low price competition is imminent. Therefore, when the market is uncertain, it is advisable to choose appropriate production cuts or adjust workers' working hours to reduce expenditure.

In the market downturn, many manufacturers will consider reducing production and holiday. In last year 7 and August, many factories and dyeing factories set up high temperature leave, but this year this situation is likely to be ahead of schedule. If the next order is difficult to continue, many manufacturers will consider reducing production or even having a holiday. In the short term, it is suggested that the larger stocks should be allowed to go on the market, and the transaction can be allowed to make profits; the lower inventory prices can be temporarily stable, and insist on the principle of production according to single production, along with production and strict control of stock.