Epidemic Shock Wave! Zhejiang'S Fenghua Factory, The World'S Largest Garment Maker, Will Close At The End Of The Month.

The impact of the epidemic on the textile industry continues to intensify. This time, it turned to the Yida group, one of the world's leading producers of pure cotton shirts.

In April 20th, Yida group announced on its official website that it decided to close 3 factories in advance by the end of July.

Yida group said that the outbreak of the epidemic has created an unprecedented perfect storm for the supply chain of the global textile and garment industry. We are under tremendous pressure, and some are even struggling to survive. In order to control the spread of the epidemic, many countries have forced shops to close, and economic activities are close to a standstill, and the retail industry has almost stagnated.

The above measures also made the Yida group upstream of the textile and garment supply chain suffer unprecedented impact. In order to ensure the sustainable operation of Yida, the group has decisively adopted a series of actions, including adjusting business scale, slashing operating expenses and streamlining personnel. We have to make the hardest and most painful decisions to close the following factories at the end of July this year:

In 1 and April 30, 2020, Fenghua's factories were closed.

In 2 and June 12, 2020, two factories in Malaysia and Penang were shut down in Kelantan.

3. July 31, 2020, closing Mauritius's factory at flake.

Yida group admits that in the coming months, the company will make every effort to ensure that all affected employees receive an appropriate and fair transitional arrangement.

It is learned that Fenghua Yida Garment Co., Ltd. is located at No. 355 Yuelin East Road, Fenghua. The company was founded in December 28, 2011, with a registered capital of US $2 million, and the number of insurance companies reached 562. The company's business scope covers the manufacture and processing of garments, sewing products, clothing and accessories, and imports and exports of various commodities and technologies.

According to public information, the Yida group was founded in 1978 and is a vertically integrated cotton and Garment Group. Its business covers cotton planting, spinning, weaving, dyeing and finishing, garment making, accessories, packaging and retailing. It provides one-stop shirt service and is currently the largest cotton shirt manufacturer and exporter in the world.

Yida group produces more than 100 million garments annually for world famous brands such as Ralph Lauren, Tommy Hilfiger and Nike. Yida group has 57000 employees worldwide. Its main production base is located in China, Malaysia, maurejus, Sri Lanka and Vietnam, and has sales offices all over the world.

Wang Xueheng, an analyst with Guoxin Securities, said that the domestic epidemic affected the resumption of production and resumed production, but also made the garment processing industry chain in Southeast Asia face the situation of raw material supply and cut short supply of global clothing. From the perspective of China's infrastructure, the supply chain of textile and apparel is complete, and the garment processing industry in Southeast Asian countries mainly depends on the textile fabrics imported from China. However, the epidemic situation affects the operation of enterprises indirectly, which not only directly affects the garment supply of China's exports, but also leads to garment production and processing enterprises in Southeast Asia. Due to the shortage of raw materials, the transmission effect may lead to local raw material prices and delivery delays.

Wang Xueheng frankly said that in recent years, China's textile and clothing exports growth overall showed a downward trend, but the fabric export volume growth is higher than the clothing export volume growth rate, indicating that the shift is more obvious for low value-added garment processing links, China's high value-added fabric production capacity still has strong competitiveness. At present, with the migration of garment processing, Southeast Asian garment manufacturing countries rely mainly on importing China's fabrics, and then processing them into garment exports. It can be seen from the distribution of the export amount of garments in China that the United States, Japan and the European Union are the main consumer market of clothing export in China, and the fabrics of intermediate products of clothing are mainly exported to Vietnam.

Observation shows that, in the major consumer market, Japan, South Korea, Europe and the United States all have epidemic spread situation, local consumers may have a certain degree of decline in clothing demand in the short term, but it is expected that due to the difference between quarantine measures, overseas will not be as large as the domestic passenger flow. Store situation. At the same time, China is also trying to control the risk of two contagion caused by foreign input. Export-oriented enterprises may face the pressure of weakening external demand, but the pressure is mainly transmitted to small and medium enterprises whose orders are less stable. The stable delivery time of core suppliers and the ability of global order production deployment help brands to respond to sudden changes in the demand of different markets in the world.

According to the news and announcement of the listed companies, since February, the epidemic situation has caused the shoe and garment production enterprises to generally delay the start up, which has caused some pressure to the brand. The resumption of supply chain in China started in February, and by the end of February, the main production capacity basically recovered. Leading suppliers such as Shenzhou International are trying to make up for the loss of capacity. 10. Some enterprises have returned normal supply chain to overseas enterprises, and some enterprises have expressed pressure to deliver overseas production bases due to disruptions in China's supply of raw materials. Meanwhile, due to the spread of the epidemic in Italy, local factories are also facing the impact of shutting down production. The epidemic has generally disrupted supply in the short term, but the epidemic has minimal impact on the global distribution of brands and suppliers with controllable raw materials.

Shi Hongmei, an Oriental Securities researcher, judged that the epidemic had a significant impact on the online and offline channels in the first quarter, and the decline in earnings would be greater than the decline in revenues. From the point of view of the industry in the near term, from March to early April, terminal retail gradually recovered to 7-8 in the same period last year. In the middle of the year, retail sales are expected to gradually recover to the same period last year. However, the uncertainty of domestic economy caused by the spread of overseas epidemic will suppress the consumption of mid term industries, and the survival of the fittest will intensify. Forced to accelerate the improvement of inventory management, operation efficiency, precision marketing and other aspects, the new retail mode with full channel integration is further accelerated.

Reporters learned earlier in the interview of Yida group Guilin ten, such as the park. At present, the production of Yida group's fabrics is mainly brilliant, and then transported to Malaysia, Guilin and other production bases from Gaoming, which are closely related to the convenient traffic conditions. Especially after the Spring Festival (spring) in 2019, the workshop with automatic equipment and industrial process improvement has been unveiled in ten.

In Yida group Guilin ten, such as the park, the production of ten thousand spindles in the past requires 25-30 workers, and now only 5-6 people are needed. In terms of automation transformation, the exploration of Yida group has been in the forefront of the industry. Taking the production of woven shirts as an example, about 80% of the total 60 processes were automated or semi-automatic, and the automatic coverage rate of knitted garments was 39%. The shirts production line personnel decreased by 30% compared with the peak value, while the efficiency increased by 40%. The cost was reduced, and the product quality and production efficiency were greatly improved.

According to the insiders, the demand driving power of Yida group to accelerate the construction of smart factories mainly comes from three aspects, including industrial upgrading, labor cost and energy saving and environmental protection. On the one hand, under the background of the increasingly maturing technology of IOT, information technology and manufacturing technology have been highly integrated, which has created technical support for the realization of intelligent factories. On the other hand, from the point of view of enterprises themselves, with the gradual disappearance of demographic dividend and stringent requirements for green manufacturing, enterprises have enough power to actively upgrade automatic production equipment, so as to enhance the overall competitiveness of production and achieve maximum production efficiency under the premise of energy conservation and consumption reduction.

First of all, the technical requirements of equipment upgrade to the direct power of factory automation upgrading. The higher productivity leads to the birth of more reasonable motion controller and the more reasonable software design of process design; the emergence of a large number of complex production lines which are related to each other puts forward higher requirements for transparent chemical plants and industrial communications; and with the extension of the number of factories owned by a company in the whole country and even the whole world, it is a remote operation and maintenance management system for automation equipment. The rapid development provides a favorable growth soil. The smart factory is the inevitable outcome of the upgrading of the manufacturing industry to a certain degree after the automation rate has increased to a considerable extent.

Second, compared with Southeast Asian countries, labor cost advantage has subsided. Since 2008, the growth rate of labor cost in China is obviously faster than that in industrial production efficiency. Especially since 2010, the average wage growth rate of the industrial sector has maintained a two digit growth. The demographic dividend in the past has gradually disappeared with the rapid rise of labor costs.

As early as 1995, Yida Group invested in the establishment of cotton base and cotton yarn production base in Xinjiang, and began to invest in Vietnam in 2001. At present, Vietnam is the largest overseas manufacturing base, with three factories and 9000 employees. Therefore, it has become one of the largest suppliers of pure cotton shirts in the world. It is RalphLauren, Nike, TommyHilfiger each year. Dozens of world-famous brands such as HugoBoss, Lacoste and Muji produce more than 100 million cotton shirts.