Foreign textile fiber companies have emerged

Rising raw material prices, rising labor costs, shrinking foreign trade orders, sluggish domestic demand, and difficulties are among the many factors that constrain China's textile industry to face many challenges. The "Economic Information Daily" reporter recently went to Wujiang, an area where China's textile industry gathered, and learned that in the first half of this year, the internal and external problems of China's textile enterprises have become increasingly prominent. The situation of textile enterprises and natural fiber textiles has further deteriorated, and chemical fiber companies Comparative advantage is seeking to break through.

Shengze Town, Wujiang City, the traditional silk capital of China, has now become a gathering place for the modern textile industry. With tens of thousands of sets of domestic and foreign leading production equipment, the town produces 6 billion meters of various textiles every year. However, since last year, Shengze has been affected by internal and external troubles.

According to the latest data released by the General Administration of Customs, from January to May of this year, China’s textile and apparel exports totaled US$88.835 billion. From the sales amount, the growth of textile and apparel exports showed signs of shrinkage. From the month of May, textile and apparel exports totaled 20.038 billion U.S. dollars, up 23.77% year-on-year, and down 9.76 percentage points from the 33.53% growth recorded in the same period of last year. The growth rate of the textile and apparel industries also slowed down obviously from the previous four months. “The increase in *** and the reduction in foreign trade orders directly led to the decline in the sales volume of small and medium-sized textile enterprises with low-end textiles as their main products.” Cai Yanhua, secretary-general of the Wujiang Textile Industry Association, told the “Economic Information Daily” reporter that China’s textile industry relies heavily on exports. Some enterprise products are relatively single, relatively small in scale, and foreign trade orders account for a high proportion of total orders. The reduction in foreign trade orders has a considerable impact on these enterprises.

This is a "foreign trouble", "internal concern", the first is the rise of raw materials. “The minimum cotton price has risen from about 12,000 yuan/ton to about 34,000 yuan/ton, and now it has dropped to about 24,000 yuan/ton. The price is still high; the cotton yarn has increased from 30,000 yuan per ton to 60,000 yuan per ton. There are many varieties.” Wen Hao, deputy general manager of Jiangsu Hengli Chemical Fiber Co., Ltd., told the “Economic Information Daily” reporter that not only has the natural fiber boomed, but the cost of chemical fiber raw materials has also been rising. In addition, there is an increase in labor costs. According to Cai Yanhua, from the second half of last year to the first half of this year, the labor costs of Wujiang textile companies rose by 20%, and the monthly salary of textile workers rose to 3,500 yuan to 5,800 yuan. According to sources in the textile industry, under the dual constraints of high costs and declining sales volume, the profits of textile companies have been further compressed: the industry’s average net profit before was about six points. According to the current situation, profits may only have four points.

“The above-mentioned internal and external problems, coupled with the intensified financing of SMEs, have made the living conditions of SMEs and natural fiber companies worrying, but this is good for the chemical fiber textile industry.” Wen Hao told reporters that the situation with other textile companies in the capital chain tension is just the opposite The fact is that since the start of 2009, chemical fiber industry products have generally had high profits without inventory.

It is reported that during the recovery process after the financial crisis, loose monetary policy led to a substantial increase in the downstream scale of the textile industry. However, due to the long construction period, the textile raw material industry has taken at least one-and-a-half years from project approval to product production, and the pace of expansion generally lags behind. In the downstream, the unbalanced supply and demand led to the general high profits of the chemical fiber industry and there was no inventory, and the capital chain was also relatively loose. In an interview with Wu Jiang, the reporter learned that in the context of the overall decline in the domestic textile industry in the first half of this year, the chemical fiber textile industry has achieved unprecedented development—the price of cotton yarn increased sharply last year, resulting in cotton yarn and chemical fiber. The gap is obvious. Downstream garment factories cannot accept such high cotton yarn prices, forcing weaving mills to search for alternative raw materials: When downstream fabrics are placed on orders, they should be replaced with chemical fiber as much as possible to avoid the use of natural fibers.

“In 2008, the price of polyester was about 18,000 yuan/ton, and the price of cotton yarn was 15000-16,000 yuan/ton. Today, the price of cotton rose to 23,000-24,000 yuan/ton, and the price of polyester still hovered around 18,000 yuan/ton. It shows that as a raw material, polyester can maintain a more stable price." Wen Hao said that this year Hengli Chemical Fiber research market development trend, developed several varieties of properties that are closer to cotton yarn, and registered the brand.

“We feel that the chemical fiber market has suddenly expanded a lot. Our gross margin space last year and this year was the largest in recent years and the average gross profit margin was about 30%.” Wen Hao said that the current demand direction of the market is to locate porous ultra-fine special fiber products. This is a substitute for natural fiber, and at this point, Hengli Chemical Fiber is a leader in domestic R&D. Its R&D fabrics have entered the global supply chain system of brands such as Nike, Adianas, and Toyota Motor.

Cai Yanhua, secretary general of the Wujiang Textile Association, said that every crisis is the turning point for the industry. In the long run, the use of industrialized synthetic spinning materials will be the trend and the direction of industrial upgrading of the textile industry.