The Short-Term Layout Of Global Textile Supply Chain Has Changed Due To The Epidemic Situation

At present, the epidemic is still spreading all over the world, and international business exchanges and goods circulation are affected to a certain extent. According to the "overview of China's overseas investment in the first three quarters of 2020" released by Ernst & young, an interdisciplinary professional service agency, in the first three quarters of 2020, the overseas investment of Chinese enterprises continued to decline, with the total amount of overseas mergers and acquisitions of 24.4 billion US dollars, a year-on-year decrease of 50.6%, which was the lowest in the same period in recent 10 years.

In this year of ups and downs, "going out" textile enterprises how?

Africa: risks still exist, controllable in general

According to incomplete statistics, by the end of 2019, the stock of foreign investment in China's textile industry has exceeded US $10 billion. Overseas investment is distributed in more than 100 countries and regions, with annual sales revenue of more than 10 billion US dollars. In this process, Africa, with its advantages in resources, labor force, policy and consumption potential, has become a key area for China's textile enterprises to deploy overseas.

In the face of the continuous spread of the epidemic since 2020, the export and employment of African textile industry have been affected, and Chinese textile enterprises in Africa will inevitably be affected.

Jiangsu Sunshine Group invested in wool textile dyeing project in Ethiopia in 2016 and set up sunshine Ethiopia wool textile and dyeing Co., Ltd., a wholly-owned subsidiary. By the end of 2019, its Ethiopia company has invested 469 million yuan. According to Jiangsu Sunshine's 2020 half year report, the project has been officially put into production in the first half of 2020, but the production and operation are affected to a certain extent due to the epidemic situation and other reasons.

Jiangsu Sunshine Group also pointed out that the differences in legal environment, economic policy, market situation, culture, language and customs at home and abroad have brought certain difficulties to the operation and management of Ethiopia company. At the same time, the changes of local economic situation and relevant economic policies may have adverse effects on the future operation of Ethiopia company.

In addition to enterprises, some industrial parks in Ethiopia were forced to shut down in 2020. Ethiopia's Oriental Industrial Park, developed and constructed by Jiangsu Yongyuan Investment Co., Ltd., is planned to be 2.33 square kilometers. 129 enterprises have settled in the park, with an agreed investment of 1 billion US dollars, an output value of 1.5 billion US dollars, and 16000 local jobs. Liu Zhenghua, vice president of the company, said frankly that the epidemic situation delayed the construction of the second phase project. However, he said that the second phase of the project is still in progress, planned to be completed in two years, and about 150 enterprises will be introduced. "The phase II project will aim to introduce upstream and downstream enterprises in the industrial chain, such as jeans manufacturing, and create a" one-stop "mode from cotton planting, spinning, textile, printing and dyeing to clothing."

Liao Hongying works in Ethiopia's Oriental Industrial Park. As an assistant to the general manager of Linde Textile Co., Ltd., she looks back on the past year of 2020 and is quite relaxed: "the impact will be more or less. In March last year, the company received a notice from us and UK customers, and some orders were delayed. Logistics has indeed stagnated for a period of time, but the overall impact is still within the acceptable range. "

Southeast Asia: both favorable and negative

The outbreak of the outbreak of Southeast Asia's textile industry also pressed the key to suspend. The weakness of retail industry in many countries around the world, the closure of retail stores in Europe and the United States, and the sharp decline of textile and clothing sales volume have made the textile and garment industry in Southeast Asia in a dilemma.

Then, what will happen to the development of China's textile enterprises in Southeast Asia in 2020?

As early as 2013, Shenzhou International Group Holdings Co., Ltd. built a fabric production base in Vietnam to better meet the orders and trade demands of core customers. By the end of 2018, Vietnam Deli fabric factory has been able to undertake 45% of the group's fabric supply. According to the recent financial report released by the company, the production capacity of Vietnam factory will reach 300 tons / day in 2020, which is almost the same as that of Beilun fabric factory in Ningbo.

In its financial report, Shenzhou International pointed out that Vietnam's fabric factories would provide effective supply for downstream production of Shenzhou International in 2021. In the changing trading environment, the layout of overseas production capacity makes the company's delivery capacity more stable. On the other hand, with the increasing uncertainty of the global trade environment, overseas factories can flexibly allocate production for customers, which is more resistant to pressure. The factory capacity of Shenzhou International in Vietnam is enough to undertake the current total orders exported to the United States, which can effectively hedge the impact of Sino US trade friction.

It is understood that, under the impact of the global epidemic, although the major cooperative brand companies of Shenzhou International have suffered a decline in performance, the company still maintains the stability of its business. In the first half of 2020, the company's revenue was 10.234 billion yuan, a slight decrease of 0.4% year-on-year.

Shaoxing MuLinSen Knitting Co., Ltd. is mainly engaged in various kinds of rayon products. Its products are mainly exported to Southeast Asia, and has set up printing and dyeing factories and bonded warehouses in Indonesia. Huang Yong, general manager of the company, said that since September 2020, the company's operating income has changed from negative to positive. In the whole year of 2020, the company's annual sales volume increased by about 15% year-on-year. "The Indonesian factory is not only responsible for the production and storage of products, but also can send the latest fashion information of Southeast Asia market and patterns to China at the first time. After improvement and development by the R & D team of the headquarters, we can finally make new patterns and new products for different markets and regions. This also lays the foundation for the company to send the latest product patterns to various customers on a regular basis. " Huang Yong believes that the opening of the factory not only keeps old customers, but also attracts a large number of excellent new customers, which improves the competitiveness of the enterprise.

However, the epidemic has also cast a shadow on some enterprises that have taken root in Southeast Asia. "Because of the epidemic, the company's orders are much less, so it is estimated that the annual reduction will be at least 30%." A Cambodian textile enterprise director, who did not want to be named, admitted that in 2020, the factory was often in the state of semi shutdown.

Chinese textile enterprises: going out is still the general trend

The epidemic situation has changed the short-term layout of global textile supply chain, and the external policy environment is complex. It is obvious that Chinese enterprises need more early warning mechanism and risk awareness to participate in the global industrial chain remodeling.

Industry experts believe that before enterprises go global, first of all, we should do a good job in early research, especially to understand the safety risk review of foreign capital, understand the local laws and regulations, and avoid blindly entering unfamiliar industries. Secondly, we should not only pay attention to the initial cost, but also pay attention to the integration cost. We should focus on the long-term development strategy. In addition, we should strengthen communication with local parties, establish a positive image, pay attention to fulfill corporate social responsibility, respect local customs and habits, and gradually cultivate unique corporate culture.

Liao Hongying believes that the impact of the epidemic will be long-term, and China's textile enterprises need to have a clear judgment on this, and it is more important to go far than to go fast. At present, enterprises should not only pay attention to the further changes of the epidemic situation, but also pay attention to the changes of the international political pattern. But she is still full of confidence in investing in the African market. "Textile and clothing industry is one of the pillar industries in Africa. Southeast Africa has the most dynamic textile industry in Africa and is an important cotton producing area. Chinese enterprises can bring advanced technology and management methods to African countries, help to improve local production process, and try to transfer large-scale garment production process to realize the overall transfer of clothing industry and related supporting industries to southeast Africa. "

The more we face downward pressure, the more we need to find a way out in a broader range. Zhou Zhaomei, global head of Ernst & Young's China overseas investment business department, said: "although the global economy enters a recession period in 2020 and various political and economic risks are difficult to eliminate in the short term, economic globalization is still the general trend. We believe that "going out" will still be the inevitable choice for more Chinese enterprises under the new development pattern of "domestic and international dual circulation" promoting each other. In the future, the focus of overseas investment of Chinese enterprises will still be the fields and industries closely related to the development of domestic real economy. "