Profit Plus &Nbsp; Textile And Garment Enterprises Are Hard At The End Of The Year.

In 2011, the textile and garment industry experienced a sudden change in the market.

In the first half of the year, "price increase" was the key word in the industry. However, it didn't last long. After entering the autumn, the textile and garment industry experienced an unprecedented low tide. The production, downtime and closure of the textile and garment base were being staged in Zhejiang.

Although there is nearly a month away from the Spring Festival, many textile and garment enterprises in Zhejiang have begun to take the annual leave ahead of schedule.

What causes the industry to be in such a miserable situation? How will the enterprise get through the crisis? For this reason, the Securities Times reporter visited the textile and garment enterprises in Zhejiang on the spot.

Entering winter, textile and clothing in Keqiao, Shaoxing

From the recent visit to Zhejiang textile and garment enterprises by the Securities Times reporter, textile and garment enterprises have experienced the sudden cold and hot changes in the market in the past year.

After a brief glories in the first half of the year, orders fell sharply, huge inventory pressure, rising labor costs, appreciation of the renminbi, fluctuations in raw material prices and loan interest rates.

Manpower costs rise and profit

Sijiqing, Hangzhou, has the name of "the first street of Chinese clothing (000902, stock bar)", while Hangzhou, Xiaoshan, Keqiao, Huzhou, Shengzhou and other textile and garment industrial parks are the backing behind the reputation of Sijiqing.

Zhejiang Xiangrun Garments Co., Ltd. is a large garment manufacturer in Xiaoshan Industrial Park. Zhang Yue Quan, vice president of the company, told reporters that as an export oriented garment enterprise, the gross profit will not exceed 10% at present. Net profit will also be 4%~5%, appreciation of RMB, increase of labor cost and change of raw materials. The impact of these three will be very fatal to export garment processing enterprises.

This is not just Zhang Yuequan's own dilemma.

In textile and garment enterprises in Shaoxing, Shengzhou and Huzhou, Zhejiang, a number of business executives told reporters that many factors such as rising labor costs, appreciation of the renminbi, fluctuations in raw material prices and the growth of financial costs caused many enterprises to get into trouble.

Take Xiangrun garment as an example. In 2009, the average wage of the company's workers was 1900~2000 yuan / month. By the end of 2010, their average wage rose to 2600~2700 yuan / month, and the average wage of workers has increased to 3000~3100 yuan / month by the end of this year.

At present, the number of workers in the company is 1800~1900, that is to say, the cost of labor alone is 20 million yuan more than that of 2009.

Even for a large garment enterprise with nearly 2000 people, 20 million yuan is by no means a fractional sum. The rise in human cost alone may eat up most or even all of their profits.

Yu Xueyi, general manager of Zhejiang Haide Garments Co., Ltd., the largest trousers manufacturer in Hangzhou, told reporters: "in the domestic textile and garment processing enterprises, the annual profit is more than 30 million yuan.

Take our company as an example. At present, a pair of trousers will earn 4 yuan at most, and this year's output is about 5000000, that is to say, the profit of our factory is only 20 million this year. "

It is understood that for garment processing enterprises, fabric costs account for about 70%~75% (after the rise in labor costs, raw material costs accounted for about 65%~70%).

Now, the raw material cost of the market is almost the same. If the cost of the fabric increases, the price will rise, and the customers will be able to accept it.

At the same time, due to the different labor costs of different enterprises, if customers increase the processing fees on the basis of rising labor costs, customers are generally difficult to accept.

Declining competitiveness leads to shrinkage of orders

As a labor-intensive industry, the rising cost of manpower after the financial crisis has further weakened the competitiveness of domestic textile and textile enterprises, and the orders of many garment enterprises have begun to cool down.

"Now, our competition is no longer a competition with domestic manufacturers, but rather a contest with emerging countries in Southeast Asia.

Last year, we made 6 million 280 thousand pairs of trousers. This year's capacity is estimated to be about 5 million 300 thousand, with a drop of nearly 20%, and next year it may continue to decrease. "

Yu Xueyi told reporters.

It is reported that in the past two years, the garment and textile industry developed by India, Vietnam, Laos, Kampuchea and other countries has formed a scale effect. More importantly, in the textile and garment enterprises of the above countries, their average workers' monthly salary is about 100 dollars (about 631 yuan), while many of the garment enterprises in Zhejiang, their average monthly salary of workers has reached 3000 yuan, plus the insurance of clothing enterprises for employees, as well as the cost of food, housing, pportation and so on, the actual labor cost is about 3500 yuan / month.

Therefore, India, Vietnam and other countries

Yu Xueyi said that in terms of quality, the products of domestic garment enterprises are superior to those of garment enterprises such as India and Vietnam.

But for mass clothing products, the quality difference is not very obvious. European and American customers do not care much.

Therefore, some European and American customers entrust orders to garment enterprises in Southeast Asian countries, while some complex and highly ordered orders can only be handed to domestic garment manufacturers.

Data from the US Department of commerce also confirm this.

From January 2011 to August, the total volume of imports of cotton products from Bangladesh, Vietnam and Indonesia increased by 3.35%, 0.97% and 2.45%, respectively, while the total number of cotton products imported from China decreased by 16.61% over the same period last year.

In addition to the shock waves brought by the emerging markets in South Asia, in recent months, the European and American economies have seen bad news frequently, making many garment enterprises in Zhejiang worse.

Yao Qijun, deputy general manager of the company, said: "in 2008, the financial crisis gave us the impression that after October, the situation was not very good, but after 2009, the economy soon recovered. Before September this year, our company's offshore orders were good, but the beginning of October began to reduce orders, and this time it was more obvious.

At the meeting this morning, several European and American orders were cancelled.

Corporate confidence index is low

In the first half of this year, "price increase" is the key word in the textile and garment industry.

However, after entering the autumn, the market situation plummeted, all kinds of unfavorable factors made many textile and garment enterprises boss depressed.

The data provided by the Management Committee of Shaoxing Keqiao Economic Development Zone show that in the textile and garment enterprises of the industrial park, even if it is regarded as the profit of the first half of the year, the phenomenon of increasing profits without increasing profits is quite common.

Take a large textile and garment enterprise in Keqiao Industrial Park as an example. In October of this year, the company achieved operating income of 412 million yuan, an increase of 119.67% over the same period last year. However, the company's profit did not increase or fall from 31 million 953 thousand yuan last year to 10 million 622 thousand yuan this year.

Huang Jianjiang, director of the office of Shu Mei te textile, told reporters that this year's profits were mainly supported by new products, but the profits were mainly realized in the first half of this year.

After October, the production of the company was normal, but the products had already started to be unsalable.

So some of the knitting machines have been shut down.

The enterprises interviewed by reporters generally reflected that the export orders of Zhejiang textile and garment enterprises had a sharp decline after October due to the shrinking international market demand and the competition of Southeast Asian countries such as India, Kampuchea and Vietnam.

In order to fight for limited orders, textile and garment enterprises, which are constantly being affected, dare not rush to raise prices, which makes many local garment enterprises unprofitable.

In order to retain customers and employees, many enterprises are still struggling to support without profits or even losses.

The situation of textile and garment enterprises is worrying. Even the power companies' tariff settlement methods for textile and garment enterprises have changed.

Yang Mingfa, deputy general manager of China Jia Industrial Group, told reporters that "before the electricity bill was turned over to the unit on a monthly basis, but over the past two months, the electric power company was worried that the" running road "phenomenon occurred on us, so the time of paying the electricity charge was settled within 10 days.

According to the reporter's understanding, for a textile and garment enterprise with a scale of 1500 or so, if electricity starts normal, the monthly electricity charge will be about 3 million yuan.

Although the absolute cost of this cost is not very large, for the struggling textile and garment enterprises, their attitude is that they can drag on and drag, and the way of changing the electricity tariff of the power company is because the local small and medium-sized textile and garment factories have experienced a sudden collapse.

In Xiaoshan, Zhejiang, the number of workers is about 1500.

"Next year, at least 10% of the enterprises will go bankrupt."

Gao Ligen, President of the Yuhang clothing association, said: "now, the situation at the end of the year and early next year is even more serious than in 2008.

Big businesses are strong enough to resist risks, and they can barely sustain them. Small businesses will be more serious.

During the 2008 financial crisis, Zhang Yuequan, who had more than 20 years of experience in the clothing industry, worked as a paratrooper from Daly (China) Co., Ltd. to Zhejiang Xiangrun Garments Co., Ltd.

But in the face of the new crisis, Zhang Yuequan is also in low spirits.

"Now everywhere is doing the confidence index survey, for me, the confidence index is very low."