Cotton Spinning Giant Xinjiang 1000 Looms Project Halted! Behind The Company'S Spending Cuts And Shutting Down Capacity Reflects The Common Dilemma Of The Textile Industry.

Since late March, orders for foreign orders have been lifted and orders have been delayed. Domestic textile enterprises are facing second pressure to stop production and reduce production. At the same time, the market is cold and the downstream purchasing is low, so that the spinning enterprises are not optimistic about the second quarter or even the whole year's operation. It can be said that the current yarn market has not yet fully recovered, and it is still some time for enterprises to get out of the "cold winter".

Cotton spinning giant 1 billion 300 million yuan to build 200 thousand spindles 1000 looms project halted

Shijiazhuang Changshan North Ming Polytron Technologies Inc recently announced that due to changes in the market environment and the company's business strategy, the company intends to terminate its investment in Xinjiang to build a comprehensive textile and clothing project.

It was learned from the announcement that the project in northern Ming, Changshan, invested 1 billion 311 million yuan, planned 676.6 acres of land acquisition, and the scale of construction was 200 thousand spindles and 1000 air-jet looms. After the completion of the project, the average annual sales revenue is expected to reach 1 billion 463 million yuan, with an average annual net profit of 176 million 564 thousand and 600 yuan. The total investment of the first phase project is 590 million yuan, mainly building 90 thousand spindles and 400 air-jet looms. The annual sales income is 450 million yuan and the average annual net profit is 45 million 160 thousand yuan. The project is divided into two phases. It was originally planned to start in May 2017, with a construction period of 18 months.

Up to now, the project has completed the design of the project plan and part of the construction drawings, completed the environmental protection evaluation, examination and planning, and completed the two tenders of the weaving workshop, the dining hall, the dormitory building and the wall construction, and the tendering work of the project supervision. Contracts for construction of canteens, dormitories and walls have been signed, and construction supervision contracts have been completed. The construction of the wall foundation has been completed. By the end of 2019, a total of 5 million 665 thousand and 500 yuan had been allocated for project construction.

Changshan North Ming said that along with the global economic downturn, domestic and foreign textile markets were in a doldrums, Xinjiang's support policy for the textile industry has also been adjusted to some extent, and the investment risk of the project has increased. In addition, the company has increased investment and support for the software sector, reducing the production capacity of the textile plate initial processing and low added value, in order to reduce investment. Risk, the company intends to terminate the continued implementation of the project.

In 2020, Changshan North Ming textile plate will be adjusted through structural adjustment to eliminate varieties with low gross profit margins and poor market prospects, increase varieties with high profit margins and good market prospects, enhance enterprise's ability to resist risks and profitability. The company will also formulate management measures for cotton yarn futures delivery plant management, strengthen the technical strength of cotton yarn futures business, and carry out the cotton yarn futures delivery plant library business, helping the company spin The main industry improves quality and efficiency.

Market sluggish procurement downturn, textile traders pressure mountain

Recently, the yarn market has become more and more deserted, and orders are less than in March. In the Foshan market of Guangdong, according to an enterprise, the 26 yarn and 40 yarn that had better shipped in February and March tended to be dull with the gradual completion of the previous orders. In the Shengze market of Jiangsu, besides the demand of C32S and JC40S, which are mainly used for jet cotton and cotton series, the trading of other varieties is light, the market of pure cotton yarn continues to be weak, the downstream purchasing is low, and combed varieties are obviously inferior to other varieties.

Due to the large number of foreign trade orders being cancelled, many foreign trade enterprises are turning to domestic sales, and domestic orders are extremely competitive. There are spinning enterprises that, in order to rush orders, substantial price cuts, most manufacturers cut prices to 1000 yuan / ton ~2000 yuan / ton. Even so, most textile enterprises say it is difficult to get orders, raw materials purchase is also bought with orders, dare not hoard goods, and some enterprises with large stocks of raw materials say that the losses are serious. The current cotton mill and downstream cloth shops mainly focus on clearing inventory and selling goods, the shipping mentality is thicker, there are no new orders in the downstream, and the cost of labor, plant, raw materials and other costs leads to enterprises. In addition, they are eager to ship back the funds and sell again and again. The market price war is getting worse and worse, resulting in a vicious circle in the market. Some textile mills simply limit production, shift or holiday to ease operating pressure.

The sale of imported yarn is also not optimistic. Ningbo, Qingdao, Shanghai and other places of cotton yarn trade enterprises reflect not only the immediate cotton yarn inquiry and shipment continue to be light, but also the "futures yarn" that has just begun to improve in the early April, which has not been sold, especially in Vietnam, Pakistan, Thailand and other producing areas, the demand for OE yarn and 8S~16S siro spinning is getting weaker and weaker.

An import company in Zhejiang said that at present, apart from a small number of medium mix, high C21S~32S, package, bleaching and self welding, Vietnam, India, Pakistan and Uzbekistan have made inquiries and shipments, and others including JC20S~32S, OE yarn and high count compact spinning have become "hot potato". In the first ten days of March, the company began to take part in some parts of India, Pakistan and Uzbekistan yarn contracts, such as breach of contract, cancelling the contract through negotiation, postponed shipment, and so on. From the survey, although the arrival of India cotton yarn has declined in 3~4 months, China's port cotton yarn inventory has continued to rise, and some cotton yarn traders are under pressure.

Many spinning enterprises say that the pressure of business operation has been increasing since late April. According to the development of foreign epidemic situation, it is estimated that the external demand from April to May will drop to a low point, and the test will be even more brutal. In view of the grim situation of the market, many spinning enterprises have to cut costs, control costs and even shut down some capacity in order to maintain operations. Even the Yida group, one of the world's leading producers of high-grade cotton shirts, is cutting operating expenses.

Recently, 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 global spread of the epidemic has made the supply chain enterprises of the global textile and garment industry experience a storm, and we are under tremendous pressure. Some enterprises 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 brought unprecedented impact on the Yida group, which is upstream of the textile and garment supply chain.

Some experts said that the textile and garment market environment is relatively low. In the main consumer market of clothing, Japan, Korea, Europe and the United States all spread epidemic situation. Local consumers' clothing demand may be affected by the epidemic in the short term, and the behavior of European or American clothing brand cancelled or postponed orders directly affects the production rhythm of related enterprises in the industry chain. It is also expected that the company will have to close its factories this time. In recent years, cutting expenditure and maintaining production are the primary objectives of textile enterprises.