Textile Enterprises Transform Themselves To Save Themselves, And Competition From Foreign Trade To Domestic Sales Is Becoming Increasingly Fierce.

As a long-term monitoring and observation of the textile industry insiders, Lin Exhibition on this Dragon Boat Festival saw an unprecedented holiday.

"There was no concept of vacation in the textile industry before. It was rare to rest for two or three days in a month. But now, the intensity of holidays is increasing. If you meet a statutory holiday, you can simply spend a few days, or even a few more days. Lin exhibition told the first finance, behind the holiday is the large-scale production reduction and limited production. The reason is the economic downturn under the epidemic and the shrinking orders. Factories are in urgent need of reducing expenditure and slowing down the backlog of inventory.

The reduction is not a minority. On the eve of the Dragon Boat Festival, even a certain County Textile Association issued a Joint Convention directly to the enterprises. "From June 20th onwards, enterprises will limit production by 30% to 50% according to their own operation".

As the global epidemic fluctuates, the economic recovery is clouded. As the low season of textile industry, textile enterprises are getting more and more difficult this summer. In addition to the shrinking orders and high inventory prices, the textile business owners have a headache, as well as fierce competition from foreign trade to domestic sales.

The market cake is shrinking, the snatch of food is numerous, and the textile industry, which believes that the market will always improve, obviously needs more patience and more ways to sustain it.

70% enterprises cut off production and holiday on Dragon Boat Festival

Ministry of Commerce of China Shengze silk chemical fiber index monitoring and publishing platform silk capital network recently conducted a market survey.

According to the questionnaire survey results of nearly 300 textile enterprises, over 60% textile bosses indicated that sales in June were not as good as that in May; 70% enterprises chose to cut production and holiday during the Dragon Boat Festival; over 30% enterprises started less than 50%; and over 60% people believed that the July market will continue to weaken.

As a textile town that contributes nearly 1/3 of the fabric output nationwide, the data from Shengze town of Suzhou are quite representative.

The data monitoring of silk net sample enterprises shows that on the eve of the Dragon Boat Festival, the opening rate of the Jiangsu and Zhejiang looms has been partially lowered, and the Shengze waterloom loom rate is less than 70%. The opening rate of Changxin water jet looms and Changshu warp knitting machines is maintained at about 70%, Haining warp knitted performance is slightly better, and the operating rate is maintained at seven or eight. The performance of Shaw is relatively weak, and the starting rate is only about 40%.

At the same time, the rate of loom start up was less than 65% in Jiangsu and Zhejiang provinces, which was low in the same period in recent years. It dropped by nearly 10 percentage points compared with the same period last year.

Chang Dong, the head of a local textile factory, told the first finance company that their factories were also on holiday on the Dragon Boat Festival. "Shengze and its surrounding areas have generally reduced production, and the peripheral market has been worse. Some peripheral manufacturers have completely stopped production and have long entered a long-term holiday mode."

What worries Dong Chang is that the situation in the second half of this year will be even more severe. In the recovery of many industries due to the lifting of the ban overseas, more than half of the textile enterprises have fallen into the situation of "worse sales in June". He said last year that his factory basically had zero inventory, but this year, no matter in May or June, stocks remained almost unchanged.

In a factory in winter, the ideal state is to produce on demand as soon as the order is received, while producing some conventional varieties while looking for the next order. On the one hand, the machine should not open and stop, workers need more or less work; on the other hand, moderate inventory and the required venues and cash can be maximized in the enterprise's affordability. However, the foreign trade orders have been sharply reduced due to the epidemic, and the inventory can not grow too fast, which has brought heavy burden to the enterprises.

When the holiday is cut down, the working hours of workers are constantly being adjusted. For example, from the original two shifts, instead of four shifts, from the original 12 hours to 12 hours, change to a day off, or even two days, or 6 hours, rest 18 hours.

In order to keep workers out of difficulties, there are still very few enterprises that directly suspend production. Most enterprises take the above way of production reduction to support them.

In addition to cloth production enterprises, textile machinery manufacturers who provide equipment for these enterprises also feel the obvious influence.

A textile equipment manufacturer in Northern Jiangsu, who is responsible for the manhole relative to the first finance, said that many enterprises will expand their capacity and need new machines last year. This year, one notable thing is that there is basically no demand for new equipment, most of which is the replacement of old equipment into new equipment.

"Go on!" Chang Dong said, "overcapacity is the current situation of the domestic textile industry in the past long time." Under the impact of the global epidemic, the supply-demand relationship that has struggled to restore balance has worsened. But it is hard to keep up. The longer we stay, the more we hope to see the warmer day.

According to the monthly market sentiment index released by the silk net, the index reached its peak in January this year (108.53), and fell rapidly due to the outbreak of domestic epidemic, reaching its lowest level in May 10th (71.89), then slightly upward.

However, Lin Zhan also admitted that China's textile industry has always been supported by domestic demand and external demand. At present, external demand is weak, and it is very difficult to recover in the short term. At least, there is no need for specific drugs. "There are more than 10 million new crown cases in the world, and there is no good news yet. The future is uncertain." He said.

Foreign trade to domestic trade intensified competition

In June 22nd, the general office of the State Council issued the "Implementation Opinions on supporting export products to domestic sales" (hereinafter referred to as "opinions") to help foreign trade enterprises that involve nearly 200 million people to obtain employment, and to encourage enterprises to expand the international market, while supporting marketable exports to expand the domestic market.

The 10 measures mentioned above focus on the key to the export of domestic enterprises. However, in the view of Lin exhibition, the government provided a better business environment and, at the same time, further intensified the already fierce competition in the domestic market, coupled with the shrinking of the domestic market as a result of the global economic impact. "The cake has been narrowed down, and the snatch is increasing, and the price pressure and the debt situation may be even more severe."

In the words of Chang Dong, the price of clothing made in the spot and online stores in China is extremely low or arrears are made, and there are still a large number of competitors to seize the orders that only break even or small profits, so the competition situation in the domestic market can be imagined.

Kong Xiang also told the first finance company that "the water jet looms sold to China are basically sent because they can't receive money". The factory has just completed an old customer's order, then basically does not plan to receive the order, the market is not prosperous, he worried that the goods have not been able to receive the money.

"Now the list also needs to focus on payment terms and customer strength." Kong Xiang said, good customers can do, some unfamiliar or general strength customers will not do. Before the sale of goods outside Jiangsu and Zhejiang, the longest one 3 years did not have to return accounts.

Taking into account the difficulties of foreign trade enterprises, the above opinion clearly stated that we should do well in financing services and support, and increase insurance support. We encourage all kinds of financial institutions to provide financial support for export products to domestic sales, strengthen supply chain financial services, carry out the policy financing business under the domestic sales insurance in combination with the actual situation, and increase credit support for business revolving funds such as liquid capital loans.

Meng Zhuo, manager of Anhui clothing import and export Limited by Share Ltd, said that if export credit insurance can cover domestic products, foreign trade enterprises will feel comfortable at home. After all, one of the concerns of foreign trade to domestic sales is domestic spending and arrears.

Enterprises strive to transform themselves

On the one hand, a large number of foreign trade enterprises open their own way to fight in the domestic market; on the other hand, the textile industry is also trying to find business opportunities, and increase R & D and design elements to strive for transformation.

Good at the transformation of the textile machine hole, has been closely monitoring the market demand changes. Under the impact of the epidemic, he saw the pain of the lack of automation of the domestic textile machine cleaning device. He tried to introduce overseas equipment, and through further improvement and design, made the original imported device localization.

"In another ten days, the finished products can come out." Kong Xiang said he was also considering upgrading some imported parts for local textile equipment needs to reduce costs through localization.

Kong commensurate that the epidemic has had a great impact on enterprises. The export of 1/3 share has almost stopped this year. Because exports are mainly for Southeast Asian and South Asian markets, and the epidemic in India and other places has not yet been controlled, this has enabled enterprises to intensify their efforts to fight in the domestic market.

With continuous R & D and invention patents, Kong's sales increased 4~6 in the same period of 20% this year. "Since April, we have moved more to online transactions, and new patents have begun to play a role." At present, the company's online sales account for about 30% of the total sales.

In mid June of this year, the 2020 Shengze fashion week and the seventh Jiangsu (Shengze) Textile Fair were also changed to the cloud exhibition. For the first time, the "cloud" mode was adopted to graft "fashion" elements, trying to inject vitality into the development of the industry.

According to public data, Shengze town owns more than 2500 textile enterprises and more than 6800 textile and trading companies; Shengze textile cluster has 250 thousand looms, with an annual output exceeding 25 billion meters, of which 130 thousand are looms in Shengze Town, with an annual output exceeding 13 billion meters, accounting for 1/3 of the country's total.