Can Not Wait For The Golden Period, Textile Enterprises 72 Changes

In the first quarter of this year, the textile industry, which no longer looked at the scene, shifted the sales market and changed production varieties and opened a difficult icebreaking road.

It is hard for anyone to imagine that the textile and garment industry, which has always been "golden three silver and four red May", is no longer this year.

"Before the Ching Ming Festival finished the order on hand, I went back to my hometown to take a vacation. It is estimated that it will be several months before I return to work." Zhang Kai, who has been doing garment processing for more than ten years, told reporters that affected by the epidemic, all sectors of the industry will continue to live like this year, and the textile industry will not be an exception. What we are facing now is not only the lack of new orders, but also the arrival of the return of single tide.

According to the data of the General Administration of customs, the total export volume of textiles and clothing in China in the first quarter of 2020 was 45 billion 260 million US dollars, down 17.7% from the same period last year, of which 22 billion 690 million US dollars in textile exports, 14.6% in the same period last year, and 22 billion 570 million US dollars in clothing exports, down 20.6% over the same period last year.

Can not wait for the golden period.

"The clothing industry has a very strong seasonal character, and the impact of the epidemic on the textile and garment industry is quite large, and it is a series of chain reactions." Zhang Kai said that the outbreak of outbreaks of foreign countries led to the reduction or even suspension of freight and the longer the time of shipment. When the goods have passed, they have already passed the golden period of sale. Cash flow is affected, "goods can not go out, orders are reduced, resulting in slower payment, will have an impact on the company's cash flow, and then transmitted to the upstream enterprises".

In 2001, when Zhang Kai retired from the army, he went to work in a garment factory. He worked hard and wisely. He quickly grasped the relevant skills and maintained good relations with foreign distributors. In 2004, he began to "start all over again" and seized several opportunities. Over the past decade, the clothing business has been thrived and accumulated wealth, and the factory has expanded several times. The white horse clothing wholesale city has offices, and also has factories in Baiyun District and Foshan, where clothing exports are all over the world.

Zhang Kai, who has worked hard for nearly twenty years in the clothing industry, is also at a loss what to do in the face of this unprecedented epidemic. "A large part of the clothing produced by our factory is exported to African countries, but now the epidemic is spreading in Africa, where can there be sales volume? With the export policy being constrained, the way of export is almost out of line." Zhang Kai is pessimistic about the future operation of the factory.

The seasonality of the clothing industry is obvious. The clothes in spring, summer, autumn and East have obvious changes. According to the production cycle of the garment industry, most enterprises have completed the production of spring and summer wear. In the 2 and March, the retail industry was almost stopped by the epidemic, resulting in a lot of goods being unsalable. According to the current situation of epidemic development, this year almost all domestic garment enterprises are faced with the confusion of low income in the first half of the year and not enough sales in the second half of the year.

In the first half of March, a large number of clothing stores in Europe and the United States ceased to open to the outside world. Almost all clothing companies, clothing department stores and clothing business companies were all cut short. The impact of global epidemic prevention and control on the total market demand has come into being. China's foreign trade enterprises, which have just stepped out of the first wave of domestic delayed production and resumption, have come to the second wave of pressure. They have to pay rent for factories, taxes and salaries, wages for workers, many workers are facing unemployment, and enterprises are closing down.

The United Nations Trade Research Institute said that exports of key components such as automobiles and mobile phones in China were expected to shrink by 2% in February, which may have caused other countries or industries to lose 50 billion US dollars. In the 13 industries analysed by the report, the textile and garment industry will lose more than 1 billion 500 million dollars (about 10 billion 400 million yuan). Specifically, the biggest impact on the industry is the European Union, with a loss of US $538 million. The manufacturing industry concentrated in Vietnam and Turkey, followed by Hongkong and Taiwan. The textile and garment industry in the United States lost 80 million dollars. Alessandro Nicita, an international economist at the China World Trade Center conference, said the reason why the EU's textile and garment industry has been greatly affected is that Italy, France, Spain and other EU member states have maintained close cooperation with Chinese suppliers.

China is an important supplier of intermediate products such as yarns, fabrics, zippers, buttons and other accessories in the textile and garment industry. According to the National Bureau of statistics, China's Manufacturing Purchasing Managers Index (PMI) fell 14.3 percentage points to 35.7% last month, the lowest since February.

Industry insiders said that the overseas epidemic is spreading seriously, and the main export countries of China's textile and clothing industry are affected by the epidemic in the United States, the European Union and Japan. These countries account for about 60% of China's clothing exports. It is estimated that the export volume of textile and clothing in 2020 will drop by 11% over the same period, and the export volume in the one or two quarter will decline by 20%~30%.

In late April, the reporter contacted many enterprises responsible for clothing and bag production. They all indicated that they were at rest or ready to work. No order, no raw materials, the operation of the factory had to press the "pause button".

The number of well-known clothing brands in China has also shrunk dramatically due to the number of epidemic outlets. Shenzhen clothing brand is currently more than 1300 entities in the country, half of which have been suspended (half of the remaining revenue is not optimistic); Shanghai clothing brand Lulualways I love Lulu currently has over 250 stores in the country, since the outbreak of the outbreak in January, there is almost no income under the line; BELLE's February performance fell 80%; As of February 5th, there were more than 50 business shops in Israel, accounting for 10% of the total number of shops in the country. Levi s recently closed half of its stores in the Chinese market, which is expected to account for 3% of the group's revenue. This will have a negative impact on the short-term growth target of the group. Nike announced that it will temporarily close about half of China's stores, and the remaining stores will shorten their business hours.

As a matter of fact, most garment enterprises have been discontinued, not only those factories but also the upstream and downstream supply chain enterprises, which involve millions of production workers.

"2020 is estimated to be very difficult to do. If we can survive this year, we have to say otherwise." Zhang Kai looked confused.

Helpless: Battle mask

Reporters in the survey found that many textile manufacturers have been fighting for production masks.

As early as after the Lantern Festival, a boss who made underwear production in Shantou told reporters that they had to manufacture masks. "A lot of people can buy two masks production lines by buying a few machines on a temporary basis, making masks for cars, and we are making textiles. In contrast, there are more conditions. Why not?" the underwear boss said that masks are in short supply, so long as they are produced, there will be no stock.

It is also because the respirator is a much-needed global product with considerable profits. Therefore, the mask manufacturers have gone mad four times overnight. Small and medium-sized garment processing plants have natural advantages in the transformation of production masks. There are many similarities between the existing equipment and the mask processing equipment, and the production line is also in general agreement.

In the interview, the reporter learned that after the transformation of small and medium-sized garment processing enterprises, the production of civil masks was mainly made, and the surplus production capacity was supplied to the upstream and downstream suppliers, dealers, etc. after satisfying the self employment of their own factories. The factory for changing the mask will undergo the transformation of operation: remove the original production line and transform it into a mask production workshop. It can be seen that in fact, for a small garment processing plant, the degree of transformation is not large.

For the masks factory of the new production line, their flat mask production line equipment also increased from about 200000 years ago to 7.8 million or even more than one million, and the rising production equipment increased the risk of investors. For these converted garment manufacturers, their biggest risk is the growth price of raw materials tens of times. The biggest problem in the process of conversion is raw materials, especially melt blown fabrics. In April 25th, the reporter learned from the relevant insiders that the core material of the respirator increased from 20 thousand yuan / ton to 600 thousand yuan / ton, and had to be controlled by the relevant departments.

However, some analysts pointed out that although China's mask production increased significantly, the gap is still large. Zhang Yu, chief macroeconomic analyst at Huachang securities, said that the total number of employed people in the two or three industry in China amounted to 530 million people. If a comprehensive resumption of work was done, 530 million people would be required to supply 530 million masks per day. Under extreme circumstances, only "two production + medical workers + transportation industry resumed" would need 238 million per day. In addition, due to the continuous development of the global epidemic, and China as a large country of mask production, the time line of mask production will continue to lengthen in the future. Coupled with the impact of the epidemic, clothing unsalable, the market is sluggish. In the future, the market demand for mask is relatively high. So these fast entry masks will have a better development of garment enterprises, which is a wise choice for the transition period.

Since April, the demand for domestic masks has tended to be balanced. It is no longer "hard to get". Now most of the mask production is for export. However, the certification standards vary from place to place, and the qualification certification cycle is long. Many factors decide that the future of these new masks manufacturers will not be easy to go.

Whether Zhang Kai or the underwear boss of Shantou, they all said that the clothing companies were fighting for mask production, all of which were in order to continue the frustration of the life of enterprises.

The way for enterprises to save themselves

In late April, workers in Guangzhou's Zhongda cloth market were returning home. "No job, no income, rent to pay, and Guangzhou is still an epidemic area. It's better to feel at home." Zhongda textile business circle is the largest garment accessories market in Southern China. The surrounding urban villages gather around one hundred thousand people from all over the country who are living in the clothing industry. They have just returned from their hometown to Guangzhou to work in less than a month, and have begun to go back to their homes.

In March 18th, Chen Honghua received a call from the owner of a large textile exporter in the local area. The other side hoped that he could submit an export Research Report to the local government as soon as possible. Chen Honghua is the Secretary General of a regional Home Textile Association in Zhejiang. After receiving the call, he conducted a centralized research on the member enterprises in a few days.

The findings are not optimistic. More than half of the enterprises in their member enterprises were canceled, 20% of the enterprises were cancelled orders between 20% and 50%, and 40% of the enterprises' orders were postponed. On the one hand, a large number of orders were cancelled or delayed, while the new orders were almost zero. Chen Honghua told reporters that home textile enterprises mainly obtain customer orders through international exhibitions. Now this channel is temporarily blocked by the epidemic. In the first half of 2020, all international exhibitions of home textile industry could not be carried out as planned.

There are people in the textile industry who suggest that enterprises should save themselves: first, to transfer the sales market, and the two is to change production varieties.

Export is one of the three carriages of the domestic economy. Now it seems that the "export" carriage is difficult to continue. After the Spring Festival in 2020, the county magistrate broadcast live with goods, and the huge volume and sales volume brought by the live broadcast of the shaking sound made many people see the new hope.

Live broadcast is a kind of no way to most enterprises. "Fabric trading is a block transaction. It requires experience, large payment, and a lot of formalities. Online closed transactions can not be fully realized, at least for the time being." An industry insider analyzed, "we only regard live broadcast as a means of brand promotion, as an auxiliary way." It is obviously not realistic for fabric companies to regard live broadcast as the only straw.

If we only produce varieties according to foreign trade orders, products will not necessarily be in line with domestic aesthetics. Therefore, we need to redesign and make samples to produce products that meet the requirements of the Chinese people. Foreign trade to domestic sales is not as easy as it may be. Shaoxing Xi Yuan Textile Co., Ltd. is mainly engaged in all kinds of chemical fiber fabrics, customers around the world, 90% of the company's sales volume from foreign trade orders. The company official said that under the current situation, many people will naturally think of "export to domestic sales", which is natural. But for foreign trade enterprises, foreign trade products are not necessarily in line with domestic aesthetics, and prices may not be accepted by domestic consumers. Moreover, the "rules of the game" in the domestic market are quite different from those in the foreign trade market. "In traditional foreign trade, enterprises can advance smoothly as long as they fulfill their contracts. And domestic trade is much more complicated, including product line planning, channel development, brand building, sales team building, and so on, and enterprises must also take inventory risks in doing domestic trade.

"As a long-term export oriented export oriented enterprise, a great change in products is not achieved in one or two days. This requires a full understanding of market demand, designers and workers' understanding of the domestic clothing market, and a mature product will take several months to come out, and now it is a fire." In Zhang Kai's view, even if it is necessary to exclude the domestic market from export sales and exclude the difficulties of the enterprises themselves, the impact of the epidemic will reduce the income of most of the citizens, and the purchasing power will also be affected. "The biggest fear is that the people have no purchasing power."

In addition to the transformation of the market, more companies choose to shrink production capacity, reduce expenditure and stabilize the workforce. Many textile enterprises in Zhejiang show strong desire for survival, which fully demonstrates the vitality and toughness of Zhejiang's private economy. Dynamic adjustment of production capacity has become the first rule of survival under the epidemic situation. Keqiao, Zhejiang, is a developed region in China's textile industry. There are quite a few textile enterprises that are rapidly changing according to market demand in Keqiao. "Companies are having difficulties at the moment, but every business is trying to figure it out." Wang Hao, member of the Party committee of the Keqiao Bureau of letters, told reporters that some export-oriented enterprises have increased the proportion of textile products that are more versatile by adjusting their product structure, because such products are not sold well after the outbreak.