"Midfield War" In Textile Industry: How To Turn Defeat Into Victory In Dilemma?

surprise attack

For a long time, the warm wind has already felt the heat. In the midsummer of 2020, the natural season will change as usual.

The "climate" of textile industry is much more monotonous. Since returning to work, Nantong Yongshang Textile Co., Ltd. has only one shift a day. "Too much will certainly not digest." According to Gu Xuchun, chairman of the company, under the situation of normalized prevention and control of new crown pneumonia in China, the "frost period" brought by the epidemic to the industry will exist for a long time.

"It is obvious that this year's customer inquiries are not as frequent as before." Zhang Xiuhong, general manager of Nantong Qingyu Feifei Textile Co., Ltd., said, "if you can't take goods downstream, you'd better wait." After receiving orders, the company will return to work at the end of April.

After the Spring Festival, the main raw material for weaving cotton yarn has been falling in depth. Taking 32 combed pure cotton yarn as an example, the transaction data released by China Textile Industry Federation showed that in early July, the selling price per ton was about 18650 yuan, which was more than 600 yuan lower than that in early April.

"The global epidemic has led to the cancellation or cancellation of textile export orders and the overstocking of textile mills." Chen Xiaodian, director of the Bureau, said that it was difficult to change the economic development of the industry. Since the resumption of more than 30 small enterprises, he believes that the problem is that all the small-scale enterprises have resumed their business.

According to the data released by the General Administration of customs, China's textile and clothing exports fell by 17.70% in the first quarter, even exceeding the level in 2009 after the financial crisis. In the first five months, China's textile and clothing exports still decreased year on year, but due to the surge in global demand for epidemic prevention materials, textile exports showed a year-on-year growth.

A survey organized by China Textile Federation shows that with the extension of business suspension time in developed countries caused by the epidemic, China's textile enterprises' export trade has been under pressure, and the domestic market is far from the same level in the past. The output of the key categories of textile products showed a significant reduction compared with that of the non-woven fabric production. Only the production of nonwovens kept a small growth of about 3%. The lack of demand has indeed led to the enterprises in some regions to stop work after returning to work.

"In Dieshiqiao, there are fewer foreign customers and fewer old customers." Gu Xuchun said that Rudong textile industry has been relying on Dieshiqiao market for a long time. At present, the primary market is still recovering, and the secondary and tertiary markets below are not fully opened. "There will be very few new orders this year, and more than 90% of the products will be in stock," he asserted

Zhang Xiuhong's estimation is more optimistic. She calculated that with the stabilization of the epidemic prevention and control situation in the later stage, the company's sales of 33 million yuan last year may not be a problem, but the profit will undoubtedly be very thin.

The resumption of work was delayed again and again, the supply of raw materials was not up, the logistics was delayed, the workers were hard to reach the designated position, and the orders were suddenly depressed. At the beginning of the Spring Festival in 2020, the sudden spread of Xinguan pneumonia makes textile enterprises encounter a head-on blow. What's more, companies in trouble still have to maintain the necessary decency at a certain cost.

"There are fewer orders, but the salary of the management staff needs to be opened, and the work of piecework workers needs to be supported." Yan Lipei, Secretary General of the Textile Association of Chahe Town, said that in addition to these expenses, it should be noted that 80% of textile enterprises have loans, and the interest is not small pressure.

Gu Xuchun believes that the lost time is also an irreparable price. Cloth is just a kind of ordinary daily necessities. Even if the impact of the epidemic is weakened, the restrained consumption demand can not be released, not to mention the capacity of an enterprise is basically fixed. "There is no retaliatory rebound in our industry."

A consensus

Worry, but seldom complain. This is the group expression of the vast majority of textile enterprise helmsman. This subtle psychology stems from an industry consensus: the impact of the epidemic is not all the challenges to the textile industry.

Nantong Hengchang Textile Co., Ltd. has 96 air-jet looms and 130 rapier looms. Last year, the gray cloth sales reached more than 80 million yuan, which was basically the same as that of last year. Zhou Zhengxu, chairman of the board of directors, said that although the book data was passable, the actual profit was extremely low, and the inventory increased, equivalent to 100 rapier looms weaving for one year.

Since 2019, textile enterprises have generally experienced such a difficult period. The direct reason is that a new round of Sino US trade friction started in the previous year has released a negative impact on the industry. "The first quarter was ok, but in the second quarter, the situation began to get worse, the downstream demand decreased, and the accounting period became longer." Guo Ping, chairman of Nantong Weilun Textile Co., Ltd. and chairman of the county textile chamber of Commerce, said that in the second quarter of the peak textile production season, the off-season has come in advance.

According to a survey conducted by the county development and Reform Commission in the middle of last year, in the first five months of that year, the taxable sales of the county's textile industry decreased by 28.81% year on year. Yuan Weihua, member of the Party group of the county's development and Reform Commission and full-time deputy director of the Bureau of industry and information technology, said that the market expectations brought about by Sino US trade friction and the fluctuation caused by raw material prices have an objective impact on the industry.

Zhou Zhengxu remembers that when he first entered the industry in 2004, the price of cotton yarn per ton was about 20000 yuan. The price of cotton fell to the level of 15 years ago. Take 40 yarn specifications as an example. Under normal market conditions, the price per ton should be 24000 yuan.

In front of the raw material cotton price, such as Dong Yiyuan Textile Co., Ltd. Zhang Jun gives a more refined "fluctuation curve.". He recalled that in April 2019, the price of cotton per ton was about 16000 yuan, and since then, cotton prices have experienced rare ups and downs. On June 29, the leaders of China and the United States met in Osaka, Japan. The next day, cotton futures were trading within 10 minutes. To July 9 and 10, cotton futures for two consecutive days limit, the same month, the price per ton fell to about 14000 yuan.

The fluctuation of raw materials deeply disturbs the business decision-making of enterprises; the impact of new forces also increases the difficulty for enterprises to judge the market trend. Under the guidance of national industrial policy, the focus of domestic textile industry has shifted to the West in recent years. Many large textile enterprises have moved their production bases to Xinjiang either as aid projects or based on investment needs. "There are a number of local offers. Land, employment, electricity, tax and other aspects of preferential strength, is incomparable in the mainland. " Yuan Weihua said.

"Take electricity charges as an example. In Rudong, the price of industrial electricity per kilowatt hour is about 80 cents, while in alar and Ili areas of Xinjiang, it only costs 28 cents." Mao Guoping said that in addition, the local government's rent of factory buildings, the reduction and exemption of value-added tax, as well as subsidies for workers' insurance and product freight are important policy supports.

A person in charge of a textile enterprise in Dayu town introduced that taking the export subsidy as an example, if the products are transported from Xinjiang to Nantong, the freight will be surplus. In other words, the textile products from Xinjiang have already locked in the price advantage. "If the products are sold to the mainland, they will immediately reduce the price if they are unsalable." As the government provides subsidies, it usually has a cost advantage of RMB 1000 or 2000 per ton of products compared with the mainland enterprises, which forms a great pressure on the latter.

Structural dilemma

The problem goes beyond that. What can describe the ecology of an industry in essence is often some structural difficulties.

Textile industry is a labor-intensive industry, labor is the most basic factor of production, but it has become a headache for enterprises. Nantong Jianjia Textile Co., Ltd. sold more than 40 million yuan last year, relying on the support of more than 40 workers in the factory. "Workers are generally older, and many of them are grandparents." General manager Huang Jianguo said.

In Hengchang textile, Zhou Zhengxu had long wanted to eliminate 130 rapier looms, but these machines are still on. "We have more than 10 workers over the age of 50. If we don't open the rapier, they can't adapt to the updated equipment, and they will soon go to other homes." Zhou Zhengxu said that workers would rather keep them than let them run away.

As early as seven or eight years ago, Rudong textile industry employment problems began to highlight. Yuan Xiang, chairman of Nantong Yuanye industry and Trade Co., Ltd., recalled that when the textile market was relatively good in 2013, enterprises needed a large number of recruitment. But there are so many local workers that "robbing people" cannot be avoided. "Before the workers arrive at the factory, they will be given a red envelope of 2000 yuan, and the most people will be given 5000 yuan." Yuan Xiang said that it was not ruled out that the workers had already reported and were robbed by another enterprise.

The shortage of labor can be attributed to the aging population of Rudong. However, according to Tang Xuefeng, the general manager of Nantong century Tianhong Textile Co., Ltd., the "character" adjustment of the textile industry can not be ignored. On the one hand, textile work is relatively monotonous, and local young people are rarely willing to join the industry. Even if young people from other places come to work, they need to spend after they get their wages. Textile enterprises are scattered in villages and towns, and the surrounding supporting facilities are difficult to provide consumption support. On the other hand, the so-called economically backward areas are also using development to accumulate labor demand, and foreign textile workers will gradually return.

Enterprise management is also a major bottleneck restricting textile industry to extricate itself from difficulties. Rudong's textile enterprises are mostly developed from small workshops in front of and behind the house. In order to save costs, many business owners are "all-round players". "The boss is a decision-maker, an accountant, a salesman, a porter, even a stop and repairman. He does everything and does everything." Yuan Weihua said that diligence is a profound brand given to the industry by the textile industry which rose during the period of national entrepreneurship.

With "hard work" to reduce costs, Rudong textile products were once invincible in the market. Zhou Zhengxu said that at the same price, if you put it in Rudong to make money, you can't make a deal in other places. In Shandong and other regions, many enterprises still follow the old state-owned enterprise model, "raising a lot of idle people."

However, the excessive flexibility of the system often leads to non-standard, especially in financial management. According to the investigation of the national development and Reform Commission, there are quite a number of textile enterprises have serious misunderstanding on the definition of profit. Except for workers' wages and fixed expenses, the boss' salary, bank interest and accounts receivable are ignored. "If you take 150000 in the first year and 200000 at the end of the year, I'm making money." Yuan Weihua said that under such "simple and crude" financial management, the sustainable development ability of enterprises is really worrying.

The requirements of environmental protection and management of textile enterprises are constantly improved. Huang Jianguo said that in peacetime, the relevant departments check, as long as the other party points out the problem, the enterprise will actively rectify, but it is also very difficult. He said frankly that enterprises have developed from self-employed enterprises, and the production pattern has been fixed. It is very difficult to solve the problem thoroughly if we make a small fuss. He wanted to make a thorough transformation of the enterprise, leaving aside the pressure of capital, and facing the problem of useful land. "In terms of utilization efficiency, limited land resources will definitely be given priority to projects with larger investment and more prospects."

Hong Shanjun, director of the Economic Development Bureau of Matang Town, often hears the bitter water of textile enterprise owners in the town. He believes that from the perspective of supervision, it is not wrong to be strict with the requirements, but the grass-roots background of the rise of the whole nation's entrepreneurship period also determines the management thinking and management mode of the industry, which is difficult to simply cut off from the past. "Enterprises may not want to upgrade, but they are full of contradictions." Hong Shanjun said.