Foreign Trade Clothing Enterprises Are In A Predicament &Nbsp; They Have Practiced "Internal Strength" In Succession.

Global linkage

In 2011, the development of textile and garment industry slowed down significantly.

After years of overloading, the price of raw materials is uncertain, the cost of labor is increasing and the appreciation of the RMB exchange rate is difficult. In the past, the market rule of experience accumulated has become an unmanageable "wild horse". The gradual dilution of profits has also changed from worry to the fact.

In the case of "internal worries and external difficulties", such as export disruption and loss of manpower, business owners are not optimistic about market expectations for next year.

During the visit of the Nanfang Daily reporters, most of them believe that the industry's weakness will last until the first half of next year.

How to practice the cold spell has become a problem to be solved in the whole industry.

Nanhai Xinguang Knitting Co., Ltd. is a garment brand in the United States. Its products are mainly exported to Europe, America and Japan. Influenced by the earthquake in Japan and the weak environment in Europe and the United States, the total sales volume from 1 to November this year dropped by about 20% compared with the same period last year.

"Internal and external difficulties", the company's responsible person used these 4 words to express the difficulties encountered this year: in addition to export obstruction, the company also encountered staff shortage.

According to him, last year, the company had more than 400 workers. It lost more than 100 people a year, and now only about 300 employees are left.

In the 2008 financial crisis, there were more than 600 people in the factory.

"At that time, we paid more than ten million, and now only millions."

"Now the profit is only about two points, so long as there is a single connection, we will start building without making money."

The person in charge said with emotion that he could only keep the workers in order to ensure that the workers could do the work.

In order to retain workers, Pan Zhaowen, the boss of Nanhai Jiarong Garments Co., Ltd. has increased wages from 2007 to now, increasing from 5% to 7% every year.

"The increase in the production cost of enterprises is about 30%, and some enterprises have lost money in order to feed their employees."

Pan Zhaowen said.

Chen Shubin, executive director of Foshan textile and garment industry association and Qiao Li Chemical Fiber Weaving Co., Ltd. said that the financial crisis in 2008 had a very small impact on its company. It has been the most difficult 3 years since 2009. This year it is even more difficult than 2009. Its company has been reduced to 300 people by more than 400 people at most. "A worker used to operate 3 looms at the most, and now a person operates five or six stations at a very slow speed."

According to the reporter's understanding, the labor cost of Foshan's textile and garment industry is growing by about 20% annually.

Even though business owners have been making efforts to increase wages and benefits for front-line employees, it is still difficult to stop employees from losing.

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"In the first half of this year, our total export volume was about US $5 million, an increase of 68% compared with the same period last year, but basically we have no money to make."

As the first half of the year, the total export volume increased in the top three enterprises in the South China Sea. The Nanhai Jiarong Garments Co., Ltd. mainly made jeans garments, and more than 95% of its products were exported to the United States.

Pan Zhaowen, the company's reporter, told reporters that the gross profit of the company has shrunk from 8% last year to 3% this year.

"At present, the company is already marginalized."

Pan Zhaowen regrets that from 2002 to 2004, it is the best time for enterprises to operate. They can pay nearly 20 million yuan a year to the state.

It has been the hardest 3 years for enterprises to operate in 2009, and only about 4000000 tax can be paid annually.

According to the insiders, the export clothing generally takes a small profit but quick turnover way. According to the current cost, enterprises should raise their prices at least 15% before they have normal profits, while customers are willing to raise their prices by 5% or less.

In the process of negotiating prices, many enterprises have split up with old customers who have worked together for many years because of the price negotiation.

At present, many enterprises in the textile and garment industry are operating at zero profit. This year the tax increases, but the industry, especially the garment industry, has an average profit of only about 0.5%.

According to the statistics of the Ministry of Commerce, orders for textile enterprises generally increased by 15% - 20% compared with the previous year, and the price range of individual products was even higher.

However, foreign businesses are generally unable to accept more than 10% to 15% raise prices. Some European and American customers have begun to reduce their purchases in China, and some low-end goods tend to purchase from low cost regions such as Southeast Asia.

Pan Zhaowen's Jiarong Garments Co., Ltd., because of the "Eagle enterprise" in the South China Sea, is not nervous about financing. The high cost is the biggest reason for the company's low profits. "In 2008, the financial crisis could not get the order, and now there is an order not to answer."

Pan Zhaowen said that because the products were exported to the United States and settled in US dollars, the exchange rate problem also had a certain impact on them.

The RMB exchange rate has risen from the highest 8.6 in 1994 to about 6.3 today, and the appreciation rate has reached a new high. Especially in recent years, the appreciation rate is relatively large every year.

According to the exchange rate at the time of order, many enterprises may have a profit of 5% to 10%, etc. after a series of processes such as development confirmation, purchase, production and delivery, when they get the money, it is often 35 months later. According to the exchange rate at that time, the net profit of 2% to 3% is likely to be reduced. "The more you do it, the more you will lose."

"Compared with the same period last year, sales increased by 10%, but profits were very thin."

Tan Mingkuang, chairman of Foshan Everbright Clothing Co., Ltd., is also deeply impressed by this. Now the labor cost has increased by about 20% a year, coupled with the appreciation of the renminbi and the high cost of production, which has seriously restricted the growth of profits.

The increased cost can not be directly reflected in the product, but only by "running volume" to increase profits.

Maintaining weak trend in the first half of next year

In order to investigate the survival situation of small and medium-sized enterprises in the South China Sea, recently, the Nanhai inspection and Quarantine Bureau launched a large scale questionnaire survey for nearly two months, including 15 industries and 728 enterprises, including the textile industry.

It is reported that the 15 type of export small and medium enterprises, mainly 20 to 150 small businesses, accounting for 54%.

The survey results show that textile and garment, other mechanical and electrical products and furniture enterprises account for the top three, accounting for 14%, 12% and 11% respectively.

According to the survey results, in the 728 valid questionnaires, there were 375 enterprises in the first quarter, accounting for 52%, while only 57 of them received half a year's orders, accounting for 8%. In addition, there were 37% orders without orders and 267 enterprises.

Nanhai inspection and Quarantine Bureau analysts said, "this survey results are a bit intriguing, showing that enterprises are polarized, and the situation is not optimistic."

Next year's market development has also become Tan Mingkuang's concern.

"According to past experience, in the normal year to December, orders can be filled until next June, and now we only receive March is not yet full."

Tan Mingkuang said that at present, the wait-and-see sentiment is strong in the European and American markets. If the order is still not rising after the Christmas holiday, it will prove that the crisis is really serious.

Not only is export clothing, but the entire textile and garment industry in Foshan is at extremely difficult times.

Chen Shubin told reporters, "do not make money, according to the current environment, textile related enterprises can maintain operation is good."

He told reporters that many enterprises in the Xiqiao textile industry are doing the market, and how much they earn.

At present, the market situation is very weak. When we produce a new product, if we put it on the market, we will have to backlog for a few months if the market is bad.

And downstream products, customers pay very slowly, capital is difficult to turn around.

"How many years have I been doing this business? I can still see the market rule before. In the past few years, the market can not understand, and we are careful in weaving."

For the recent textile market, Chen Shubin believes that this weakness will be maintained in the first half of next year. "It is good to ensure that the machine is kept in operation when the profit is very weak."

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Wu Haoliang, Secretary General of Foshan Textile Industry Association: strengthening enterprise management is the key to win.

According to our observation, the entire textile and garment industry is polarizing.

Part of the enterprises that are well managed by the enterprise management and quality control can still get prosperous, but most of the small and medium enterprises lacking standardized management are getting worse and worse.

Therefore, if we want to consolidate orders and achieve better business results, enterprises must first realize their pformation, pay more attention to cost management, energy conservation and emission reduction, and strive to scale production enterprises, and increase the development of new products to increase profit margins.

In this way, enterprises can get out of difficulties and achieve magnificent turn.

Pan Zhaowen, the boss of Nanhai Jiarong Garments Co., Ltd.: we must follow our own brand line.

As the US market is hard to maintain, we have begun to cultivate free brands and try to do domestic sales.

Since July this year, the company has been promoting a brand of jeans in Beijing and Shanghai. "At the stage of publicity, it has been investing money, and intends to lose two years to promote it. It may take two years to be effective."

In my view, under the increasingly fierce market competition environment, the survival space of low-end products in European and American countries is getting smaller and smaller. Only by focusing on product design and taking the route of independent brand can enterprises get better survival and development space.

Reporter observed: enterprises need to work hard to be "rejuvenated"

2011 is destined to be an extraordinary year in the textile and garment industry.

Since the beginning of the Spring Festival, the "weak season" has begun to show signs of weakness in the industry.

But the shortage of orders, the lack of staff start up, and the recruitment of enterprises all the year round have become the plight of the industry throughout the year.

"The time for shuffling is coming."

In the course of the interview, many people in the industry agreed that the small and medium-sized enterprises with poor risk tolerance had reached the stage when compared with the large and standardized enterprises.

If the overall environment continues to deteriorate, industry shuffling will come.

Facing the deteriorating overall environment, the low cost advantage of textile and garment industry has gradually weakened, forming new competitive advantages has become an urgent task for many textile and garment enterprises.

"We are constantly carrying out pipeline pformation. Before putting in 2 million yuan for JIP management and raising production efficiency by more than 30%, we will continue to put in the computer hanging system this year, forming an automatic production line, and the production efficiency will continue to increase by about 20%."

Tan Mingkuang's Foshan Everbright Clothing Co., Ltd. is currently one of the knitting industry giants in Chancheng district. It is still working hard in production management.

Small and medium enterprises' funds are "tight". They can not invest large sums of money to increase production efficiency when the environment is poor, but they can still increase weights in terms of energy conservation, emission reduction and efforts to reduce costs.

Innovative products can bring more profit margins, and upgrading the level of enterprise management will lay a good foundation for the competitiveness of enterprises.

Many people in the industry say that practicing "internal strength" is the best policy for the small and medium-sized textile and garment enterprises.