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How To Climb Up The Value Chain Of Textile Industry From A Piece Of Clothing

2022/4/2 14:20:00 0

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The conveyor belt links multiple floors, the workers and intelligent equipment cooperate efficiently, and the complete set of equipment in the dyeing workshop is completely closed and quietly running... When you enter the Ningbo factory of Shenzhou International, you can see the busy scene. 　　

Whether within the textile industry circle or in the manufacturing industry, Shenzhou International is an "alternative" existence: how can garment factories achieve such high profits? What do manufacturing workshops rely on to retain tens of thousands of young people? How to let the "sunset industry" in the eyes of others climb the upstream of the value chain? 　　

Textile factories with net profit margin of 20%

On Yongjiang Road, Beilun District, Ningbo City, a two meter high enterprise door wall with brick red background is slightly old. This is the Ningbo factory of Shenzhou International, which produces about 850000 pieces of ready-made clothes every day. Taking into account the factories in Anqing, Quzhou, Zhejiang, Vietnam and Cambodia, Shenzhou International produces about 2 million pieces of ready-made clothes every day. 　　

It works for UNIQLO, Nike, Adidas, Puma and other clothing brands, with annual revenue of more than 20 billion yuan and a net profit margin of 20% for consecutive years. This has overturned the cognition inside and outside the industry: how can a garment OEM enterprise have such a high profit?

Shenzhou International Ningbo factory is located on Yongjiang Road, Beilun District, Ningbo City. (photos provided by interviewed enterprises)

"It's supply and demand that determine profits." Said Ma Jianrong, chairman of Shenzhou International Group Holding Co., Ltd. He has witnessed China's textile industry climbing the upper reaches of the value chain for more than 40 years since he was an apprentice in a textile mill at the age of 13 to be in charge of the continuous growth of the enterprise. 　　

When it comes to the core competitiveness of enterprises, Ma Jianrong is not shy. He said that in the trend of "fast fashion" in the global clothing market, Shenzhou International's supply capacity has an absolute advantage. Especially in the context of a global epidemic, this capability is value added. 　　

The so-called supply capacity can be simplified into two words: one is "fast". The delivery period in the industry is more than three months. Shenzhou International only needs 45 days, and the fastest can be within 15 days; The second is "stability". Through vertical integration of production and global layout, enterprises can better cope with the uncertainty of supply chain and trade environment. 　　

Ma Jianrong said that since its listing in 2005, more than half of the company's profits have been used to introduce and develop equipment. At present, it is investing billions of yuan in digital reform. In addition, in 2008, enterprises started the global layout, stabilized the whole industry chain, and improved the ability to resist risks. 　　

Industry insiders told reporters that there are thousands of garment foreign trade enterprises in Zhejiang, and the gross profit margin of a garment has been hovering between 10% and 20% for a long time, while the net profit margin is often less than 10%. With the industrial transformation and further concentration in recent years, China's textile industry continues to climb upstream in the global value chain, and Shenzhou International is a typical one. 　　

Providing stable and decent jobs for young people 　　

"I have been working in the factory for ten years, so I don't have to worry about where to work after the new year." Luo Jixian, a 28 year old workshop worker from Zhaotong, Yunnan Province, is adept at handling fabrics delivered by intelligent devices. This Spring Festival, like more than 80% of the employees in the factory, she chose to stay in Ningbo for the Spring Festival to support enterprises in epidemic prevention and rush orders. 　　

Chen zhifen, executive director and deputy general manager of Shenzhou International, said that the company has more than 90000 workshop workers in the world, of which domestic employees come from 14 provinces, autonomous regions and cities, but the annual turnover rate is less than 3%, far lower than the average data of manufacturing industry and the same industry. 　　

Some labor-intensive manufacturing factories wonder what Shenzhou International relies on to retain tens of thousands of employees? How to make young people willing to stay in the workshop?

A glance at the workshop of Ningbo factory. Photo by Fang Wenyu, a reporter from Xinhua News Agency

"Manufacturing doesn't conflict with young people." Chen zhifen, who has been working in Shenzhou International for 31 years and has been working as a garment maker to deputy general manager, admits that young people can not be labeled as "impetuous". They also want stable and decent jobs. 　　

Invest hundreds of millions of yuan to build a staff canteen, pack more than 300 buses every year to pick up employees across provinces, and pay special attention to employees from other places... In Shenzhou International, "putting employees first" is a development concept inherited so far, which is implemented in every corner of operation and management. 　　

Before going to Shenzhou International, Zhao Jinlong, from Fuyang, Anhui Province, worked in several factories, but none of them worked for more than half a year. He finally settled down in Ningbo factory and has been working for more than 4 years. 　　

"Because there's a sense of belonging here." Zhao Jinlong recalled that at the beginning of January this year, there were confirmed cases of new crown pneumonia in the factory, which caused thousands of employees to be isolated. During this period, the company provided special subsidies of 500 yuan per day for centralized isolation employees and 250 yuan per day for isolated employees at home. The employees felt very warm. 　　

"It's good to make a dress." 　　

Since 2020, Shenzhou International has invested 55 million yuan to upgrade the process. After completion, the concentration of COD discharged will be controlled below 50mg / L, and the daily reclaimed water reuse will reach 18000 tons, saving 5.4 million tons of water resources annually. 　　

Once upon a time, the textile industry was regarded as a "sunset industry" and "low-end industry" with heavy pollution pressure, narrow profit space and dim prospects. 　　

In the view of the industry, Shenzhou International has many easy cross industry and quick money opportunities. For example, we can raise tens of billions of yuan with low interest rate, and then we can make a profit by changing hands, or invest in real estate and finance. In fact, Shenzhou International not only has no cross industry investment, but also does not do its own brand, focusing on the manufacturing link.

Shenzhou International Ningbo factory is the leading pilot plant in the industry. (photos provided by interviewed enterprises)

"It's good to make a dress." When asked why he only works as a contract manufacturer, Ma Jianrong said frankly that his concentration comes from the entrepreneur's sense of keeping the job, but also from his rational optimistic view on the industry: garment is a just needed industry with a huge market. Indeed, many textile enterprises have been shut down due to pollution or are unable to continue due to high cost. However, this is often due to the bottleneck and lack of competitiveness in the development mode of enterprises, It's not that the industry itself has a problem. 　　

He told reporters that as early as 2000, Shenzhou International had just turned from debt to profit, and decided to use 30 million yuan of profits for the construction of sewage treatment plants. 　　

Manufacturing a garment belongs to the "low-end" or "high-end" industry, and the final decisive factor is the development path. From the perspective of Shenzhou International, focusing on the textile industry and practicing the green, innovative and open high-quality development path, we will be able to achieve a stable and long-term development and become one of the upper reaches of the value chain.