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Shut Down, Layoffs, Bankruptcies... The Textile Industry Is Suffering From The Outbreak. Will There Be A Revival In May?

2020/5/6 11:05:00 0

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Downtime Layoffs Bankruptcies First Quarter

Originally placed high hopes. Two thousand and twenty In 2009, a sudden outbreak of the industry disrupted the pace of the industry. With the continuous spread of overseas epidemics, the domestic textile market has been in a downward spiral: customers are trapped in the epidemic or even lost contact, products can not be delivered to customers or even fail to go out, orders are reduced or even withdrawn from the list, enterprises downtime, layoffs or even bankruptcy and so on.

Recent textile enterprises cut down production and increase production

Due to shortage of orders and inventory backlog, textile enterprises stopped production and increased production. In recent years, the production and marketing situation of small and medium-sized weaving mills and printing and dyeing factories in Jiangsu, Zhejiang and Guangdong has been very stagnant. A dyeing factory in Shaoxing said that the workshop had been shut down in April 30th, and most of the workers had already been on holiday. The initial plan was to return to work in May 7th or May 10th. It is understood that some small and medium-sized textile enterprises feedback "May Day" holiday for 7-10 days, some cotton mills temporarily leave 10-15 days (employees pay the minimum standard of living according to local standards), only a few cotton mills do not have a holiday or only plan to rest for 1-2 days.

The main reasons for the small and medium sized textile enterprises resuming and stopping production are as follows: 1. In June and 5, there was a serious lack of direct or processing export orders; two, a large amount of liquid funds occupied by gauze and other stocks, resulting in difficulties in wages and other expenditures of the employees; three, after small and medium-sized textile enterprises judged the turning point of the European and American epidemic, some countries had ulterior motives to raise the epidemic from health to politics. The problem is that China's export oriented enterprises are facing worse trade and export environment.

Many textile enterprises began to go bankrupt and liquidated.

Many textile enterprises in Jiangsu and Zhejiang provinces have been declared bankrupt and liquidated by the court.

Recently, the Wujiang court issued three bankruptcy declaration of textile enterprises:

Many textile enterprises Bankruptcy auction on Ali auction platform:

Just after entering the May, there are so many textile enterprises that can not afford to go ahead and withdraw from the battlefield ahead of time. This has to make people cool behind the back. What are the reasons for these enterprises' failure?

According to the analysis of the insiders, most of the weaving factories' inventory has reached a high level of about 2 months, which leads to the lack of funds to revitalize, which means that there is no money to buy raw materials and wages. In this case, many manufacturers will choose to return the funds, but the market price will become more chaotic. Other manufacturers will have to join the "price war" to snatch the shrinking cake. With fewer goods and more competition, the small and medium-sized enterprises, which are already unable to make ends meet, are forced to fight price wars. Even some companies lose money. So how can they go well? Finally, we can only default on the wages of workers and suppliers, but have to choose bankruptcy liquidation.

Will the industry recover in May?

The whole industry chain of the textile industry is in the vicious circle of weak demand and overcapacity. If the market wants to get better, it depends on the demand of the clothing industry. Because the textile and garment industry has always been "one glory, one glory, one damage", and now the downstream garment industry has not performed well, which has also inhibited the improvement of the textile industry, especially the fabric industry.

The owner of a textile mill in Zhejiang has said that it has only opened 2 of the machines so far. "This spring, our order has been reduced by at least 40%, and we have been on holiday for 7 days."

According to statistics, as of the end of April, the opening rate of Jiangsu and Zhejiang has been reduced, of which Changshu's warp knitting started at about 4, and Shaw's round machine was around 3; Haining warp knitting was around 6, and Shengze and Changxin had 6 or so water. In the 51, Jiangsu and Zhejiang provinces, loom operating rate dropped to about 3, and the bomb dropped to about 4, and most of the manufacturers stopped their parking plans for 3-10 days.

Although some countries in Europe and the United States said they planned to test the water in May, the fact is that the recovery of economy, trade, transportation, retail business and so on will take a long time. Experts predict that the 5-7 month textile orders will be warmer and how much warmer it is difficult to estimate. It will take some time for the industry to get out of the "cold winter".