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Textile industry expects 30% of small and medium enterprises will close down



On the one hand, with the sustained and rapid economic development, factor costs is an inevitable trend; the other hand, enterprises must adapt to this trend to rely on increased innovation ability, the adjustment of product structure and improve core competitiveness, efforts to defuse the rising costs pressure, the pressure becomes the driving force for the changing patterns of development, to achieve new development in the adjustment.

Keep the prices down by endless competition has been difficult to maintain, improve product quality and added value is the way out. Domestic textile enterprises started to increase investment in R & D and product innovation, improve product style update rate, and to take proactive approach product launches, and gradually open up the domestic market.

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Deng Lei Angola Anhui Import & Export Co., Ltd. is the business manager. In his May 21 interview with this reporter, said that traders are chasing the past, manufacturers run, traders are now chasing the manufacturers to list every day through several such calls received, "even go directly to the Office of the manufacturer, no list would not received the go. "

"In general, the first half of the textile company orders more season, from the clothing market point of view, in the first half is not satisfactory, let alone the second half." Deng Lei told this reporter that the textile enterprises are facing this year operating difficulties, an estimated 30% of SMEs will be closed down.

Ministry of Industry released statistics show that the first quarter of this year, China's textile sector grew by 10.4% line, down 3 percentage points year on year compared to last year's fourth quarter, down 1.2 percentage points.

International cotton prices fall 3 percent decline in orders

"The more prices rise the more you buy, the more afraid or more into the cotton price change rate is too large, a week, prices have very different risks faced by large enterprises, and now only willing to take some short-term list. "Lu Jianzhong has been ten years in the textile industry, cotton prices so sharp ups and downs, he first met.

Starting from March this year, cotton prices exceeded 34,000 yuan / ton mark for the post. Less than two months, cotton prices to a "roller coaster", cotton spot price all the way down to 2.4 yuan / ton, tumbled nearly 3 percent.

"Last year, cotton prices have gone up so dramatically, speculation is part of the reason, many textile enterprises in Zhejiang have come to Xinjiang last year, there fried cotton. This year, the domestic and foreign market downturn, shrinking downstream demand and reduced orders, making the cotton prices all the way down." Deng Lei judge, although cotton prices dropped by 3 percent, post-up space is limited.

Cotton prices, lower raw material costs and did not ease the plight of textile enterprises.

"Last year, a substantial increase in cotton prices, foreign orders for cotton apparel products decreased significantly." Clothing, general manager of Anhui hill Lu Lu Jianzhong Jin told this reporter last year, the international market is shrinking, his client had several cuts in the number of stores.

"Only after receiving the list, before going into the raw material." Lu Jianzhong told reporters that the company is also seeking more cost-effective alternatives, such as use of chemical fiber, polyester instead of cotton and other products. "The original production of chemical fiber clothing only 30%, after this year, there are already 50% of the raw materials of chemical fiber materials such as clothing production."

"The more prices rise the more you buy, the more afraid or more into the cotton price change rate is too large, a week, prices have very different risks faced by large enterprises, and now only willing to take some short-term list. "Lu Jianzhong has been ten years in the textile industry, cotton prices so sharp ups and downs, he first met.

Fair this year, the turnover of a situation, although foreign buyers under the single-active, but in the short single accounted for 89%, export profits are not high.

A interlining company in Jiangsu, in the early post-call price of cotton in the beginning of the year to 3 yuan / ton to buy Interlining fabric, as of now the price calculation, on the loss of five or six thousand dollars per ton, these costs need to be digested by the late sales.

Investment Advisor in the light researcher Xiong Xiaokun that, from the market perspective, sales of textile enterprises are mostly concentrated in the peak season of March and April each year, and this year has a sustained market downturn, post up space narrowing; again from the national level, inflationary pressures remain continued, the state will continue to tighten monetary or other means of intervention, the domestic policy environment does not allow a sharp rise in cotton prices; In addition, the global economy, various political factors, the international cotton market in the fall of the stock.

Southeast Asia and refund orders to cut

Guangdong Textile Import & Export Co., Ltd. Assistant General Manager Zhonghao Sen said that even without the export tax rebate cut, textiles and clothing export orders have begun to slump, due to exchange rate fluctuations and offer follow up and soaring production costs, scare away a lot of Guests are expected in the second half the worst case will probably go to 50% of customers order in Southeast Asia. In his view, the export tax rebate will be overwhelmed by textile and garment export business last straw, small businesses or out of business.

"Last year, China's raw materials surged, many foreign customers as part of the orders to Vietnam, Bangladesh and other Southeast Asian countries. Although the country's industrial chain as China's integrity, but the raw material and labor costs than China is much lower." Deng Lei told the newspaper journalists, labor costs in these countries only China's 1 / 10, single from this point of view, to reduce a lot of cost.

"Delivery has been delayed a month or two often occur, but foreign customers consider the cost factor, they will send the order relatively simple fashion to those countries." Deng Lei told this reporter that, in the past China was importing cotton from these countries in Southeast Asia this year, less the number of imported cotton.

Our reporter in an interview that, at present, Zhejiang and other provinces in the textile and garment industry, there have been such signs, that is, customers will be part of the original orders to Vietnam, Bangladesh and other neighboring countries.

On the other hand, the market suddenly rumors in mid-May, the relevant state departments have adopted the textile export tax rebate from 16% to 11% of the decision to launch June and July is expected to be implemented.

"Not all parts of the export tax rebate go all the textile enterprises in China, Chinese textile enterprises to be more competitive, offer very low, which is actually shared with foreign tax credits customers." Deng Lei told the newspaper reporters, according to clothing different, will provide 10% of foreign tax credits. "Deng Lei told this reporter.

He pointed out that for now, a one-time adjustment of 5 percent seems to be impossible. Because many of the current gross profit margin of textile exporting SMEs, only one or two percentage points. Once the lower export tax rebate to 11%, which will lead to a loss or a large number of garment enterprises "direct die."

Director of Finance Division, Ministry of Commerce Yuan Xiaoming, said in an interview in 2010, the average profit margin of China's export enterprises is 1.47%, lower than the average level of profits of industrial enterprises. January 2011 to February, export profit margins to decline further to 1.44%.

Guangdong Textile Import & Export Co., Ltd. Assistant General Manager Zhonghao Sen said that even without the export tax rebate cut, textiles and clothing export orders have begun to slump, due to exchange rate fluctuations and offer follow up and soaring production costs, scare away a lot of Guests are expected in the second half the worst case will probably go to 50% of customers order in Southeast Asia. In his view, the export tax rebate will be overwhelmed by textile and garment export business last straw, small businesses or out of business.

"Textile export tax rebate cut against the very strong voice, wants the state to temporarily make adjustments, depending on the attitude of the State of export, the state tend to encourage imports, the current attitude is not clear on exports, foreign exchange reserves may be because too many neglect or even suppress the export of export. "Zhonghao Sen said.

Export situation in the present complicated circumstances, the vast majority of enterprises are expected stability of the national policy. Fair spokesman Liu Jianjun, said profit in the current situation of eating a variety of factors, the enterprise export tax rebate policy stability in the appeal.

Start a new round of reshuffle: SMEs collapse predicted

Ministry of Industry statistics show that in the first quarter, 1 / 3 of the advantages of textile industry created a whole industry more than 90% of the profits. Among them, the average profit margin of not less than 10% of the enterprises accounted for 7% of total number of enterprises, creating industry-wide profits of 35.3%; average profit margin of 5% of the enterprises accounted for 24.5% of total number of enterprises, creating the industry's 53.8 % of the profits; average profit margin of less than 1% of the enterprises accounted for 68.5% of total number of enterprises, the profits of the industry accounted for only 10.9%.

Late last year, a thriving textile industry, while a large number of workshops springing up like clothing factory as take out.

"At that time did not worry about the order, the work of a few years in this industry employees, the accumulation of point contacts to a lot of out of the situation alone." Deng Lei said to this reporter.

This year, by the exchange rate, raw materials, labor and other factors, the textile industry is not easy. "It is estimated that 30% of the small and medium textile enterprises will close down." Deng Lei estimates.

The same is true in the northern city of Shijiazhuang. The textile industry have pointed out: "shutting down mills in Hebei Province in the ratio has reached 50%, Shijiazhuang City, there is also the phenomenon of decline in the operating rate, stopping to limit production of an estimated 30%."

According to media reports, Guangdong, Zhejiang, Jiangsu, Liaoning, Sichuan, Hubei province's foreign trade export situation of the six research shows that about half of these areas decline in corporate profits, losses or even collapse of some SMEs.

"Now more workshop-style textile enterprises, competitiveness is weak. Therefore, the shuffle is not necessarily a bad thing, reshuffle, high-quality companies will be more room for development." Deng Lei told reporters.

Ministry of Industry statistics show that in the first quarter, 1 / 3 of the advantages of textile industry created a whole industry more than 90% of the profits. Among them, the average profit margin of not less than 10% of the enterprises accounted for 7% of total number of enterprises, creating industry-wide profits of 35.3%; average profit margin of 5% of the enterprises accounted for 24.5% of total number of enterprises, creating the industry's 53.8 % of the profits; average profit margin of less than 1% of the enterprises accounted for 68.5% of total number of enterprises, the profits of the industry accounted for only 10.9%.

Industry insiders estimate that only two companies to the next in the fierce competition in the global market to survive, first, the average profit margin of more than 5% of competitive enterprises, and second, with strong bargaining power in the textile and garment enterprises.

Ministry of Commerce recently released "Report of China's foreign trade situation (spring 2011)," pointed out that on the one hand, with the sustained and rapid economic development, factor costs is an inevitable trend; the other hand, enterprises must adapt to this trend, depend on increased ability to innovate, adjust the product structure and improve core competitiveness, efforts to defuse the rising cost pressure, the pressure becomes the driving force for the changing patterns of development, to achieve new development in the adjustment.

In the interview, the reporter learned that a number of textile enterprises, rely on the endless competition has been difficult to maintain lower prices, improve product quality and added value is the way out. Domestic textile enterprises started to increase investment in R & D and product innovation, improve product style update rate, and to take proactive approach product launches, and gradually open up the domestic market.

Jin Lu costumes are also trying to take the brand of the road, although the company currently doing Only, Zara and other foreign brands of OEM, but have started, "Yu Tiger" and "Fox in Perth," the two pre-promotion of its own brand .

Lu Jianzhong told this reporter: "Soon the time the brand was founded, in general, need two or three years time, if can go about 10% can increase profits."


 
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