Recently, the editor was attracted by a piece of news. The news stated that a once popular domestic textile factory and its equipment were recently auctioned by the court.
It is sad that the factory was auctioned, but This year, such cases are not uncommon in the textile market.
In June, the house and equipment of Yizheng Baosheng Textile Co., Ltd. were auctioned by the court.
In August, Xiamen Hualun Printing and Dyeing Co., Ltd. was delisted and many of its assets were auctioned. Previously, it was a well-known old printing and dyeing company in Xiamen.
In October, the real estate and other ground attachments of Zhucheng Zhucheng Xinfang Textile Co., Ltd. were auctioned by the court.
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Although we have always said that the textile market is not going well this year, business is difficult to do, and production suspensions and bankruptcies are not uncommon, but when it is extended to being auctioned and made public, it still makes people feel chills down their backs. Everything is difficult at the beginning. If you guess the beginning, you can’t guess the ending.
It is not difficult to find that most of these textile companies that cannot sustain themselves are due to a broken capital chain. In short, they have no money!
This year’s textile market is difficult! Disaster! Disaster! Whether it is other regions or the surrounding areas of Jiangsu and Zhejiang, the textile market is indescribable. Since last year, crazy production capacity expansion, production capacity transfer, and blind production have resulted in huge overcapacity this year. It is difficult for weaving manufacturers to balance production and sales, and the textile market has suddenly gone downhill. Coupled with the ups and downs of the foreign trade environment, it is difficult to have direct benefits. The textile market lacks upward momentum, and companies are more or less under financial pressure. In addition to the blind expansion of the companies themselves, the difficulty in receiving orders also puts companies under great pressure.
Conventional varieties are not popular, and the market is not sustainable
The textile market is not good, and the way clothing manufacturers place orders has also changed. Most of them focus on small batches and multiple batches. As a result, textile companies have few large orders and mostly small orders. Especially in the off-season of July and August, selling goods is common in the market, but the cruel thing is that if you sell it, no one may want it.
Conventional varieties have reached a dead end this year. Take nylon spinning as an example. As a necessity for autumn and winter fabrics, three to four million meters was considered normal in previous years. However, This year, some companies said that orders for nylon spinning are close to being cut in half, with less than 2 million meters produced so far. Coincidentally, during interviews and surveys, some companies even stated that the sales volume of nylon silk spinning this year was 0.
After entering October, the market conditions began to warm up, basically focusing on autumn and winter fabrics, which led to a wave of goods sales by weaving manufacturers, but this wave of market conditions will continue. Soon, less than 2 months later, the market entered the off-season again. Negative cuts and production shutdowns continue in the market.
It is difficult to receive orders, and the most direct result is that the inventory of gray fabrics remains high!
The price of gray fabrics continues to fall, and it is difficult for weaving companies to reduce their inventories
The price of raw materials continues to fall, and the price of gray fabrics also drops accordingly. Taking 75D chiffon as an example, the price of its main raw material polyester filament FDY75D/72F has dropped by about 650 yuan/ton in the past month, and the price of gray fabric has dropped from 3 yuan/meter in October to the current level of about 2.9 yuan/meter. But the more the price falls, the less people buy it, the less people buy it, the more the price falls, and the market begins to fall into an infinite loop.
Sample companies tested from the China Silk City Network show that the current inventory of gray fabrics in Shengze is about 38-39 days, which has increased compared with the previous period. Although It has decreased compared with September and October. Compared with the 34-day inventory in the same period last year, it is still at a high level. High inventory of weaving enterprises has become the norm, and high inventory has become one of the reasons for the downfall of textile enterprises.
In addition, the operating rate of looms in Shengze area It is currently around 85%, which is down from some time ago. It can be seen that in view of the fact that the current price of gray fabrics is difficult to rise, and the downstream demand has returned to flat, and some of the payment has not been withdrawn from the year before, weaving enterprises will choose to moderately reduce operating hours to maintain stability due to financial pressure.
Whether there are no orders or high inventory, in the final analysis, it is insufficient terminal demand.
This year, not only the textile market is “cold”, but also the clothing industry has encountered a “bottleneck period.” Data from the National Bureau of Statistics show that since the fourth quarter of 2017, sales of clothing and cloth have declined to varying degrees year-on-year.
Among them, clothing sales were 54.06 billion pieces in 2018, a decrease of 24.8% from 71.91 billion pieces in 2017. This number means that each person in China bought 12 fewer pieces of clothing on average in 2018. Based on our country’s population of nearly 1.5 billion, clothing sales will be reduced by nearly 1.5 billion per year.17.8 billion pieces missing!
Continuing into this year, the global economic downturn and weak consumer intentions have led to a “wave of closures” among clothing companies this year, including many large companies: Rasha Bell closes an average of 13 stores every day; a generation of “shoe king” Fuguiniao went bankrupt and delisted…
We cannot control the market, so can we make changes ourselves to prevent problems in the capital chain?
1. Transformation and upgrading. For large companies, transformation and upgrading can mean opening up the entire industrial chain, from raw materials to gray fabrics; for small businesses, transformation and upgrading undoubtedly means developing new products, such as T400, T800, and recycled fabrics that have become popular this year. , when conventional varieties have entered a “dead end”, these high value-added products have carved out a niche.
2. Optimize payment methods and select high-quality customers. According to the old routine in the textile market, when placing an order, a general customer will pay a 30% deposit and then pay the balance after the goods are shipped. However, this year’s market situation is poor, the balance payment cycle has been repeatedly lengthened, and it is difficult to recover arrears. There are even cases of defaulting on accounts. Therefore, choosing high-quality customers can also provide a certain degree of protection for your funds.
3. The New Year is approaching, beware of scammers. Some time ago, a textile company was defrauded of more than 5 million yuan, which was widely searched. For textile companies, when the market is good, there may be 10% profit, but in this year’s environment, it is good to be able to protect the capital. If you encounter another scam , how many years can you go without eating or drinking? Therefore, as the new year is approaching, textile people must beware of scammers! Hold on to your pockets!
Someone once told the editor that I have never been able to fully understand the wave of production shutdowns. I didn’t know anything until three or four of the five companies in one gate closed. Tell people to empty the building.
No matter what the market situation is next year, in the limited time this year, smooth operation is important. With capital, we can fight again next year!
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