In the past two weeks, textile companies, which had just emerged from the first wave of pressure due to delayed resumption of work and production in China, have faced the second wave of pressure: order cancellations and suspensions! No orders to take, no orders to make!
All orders are cancelled, and we will have a holiday after finishing the day shift!
“We are about to have a holiday!” A parking worker told the editor helplessly, “After finishing today’s day shift, we will have a holiday. The notice has been Downloaded.”
The notice states: Due to the severe epidemic situation abroad, ports have been suspended and foreign trade orders have been cancelled. Completed The day shift will be on vacation for a few days today, and the working hours will be notified later.
Generally speaking, the textile market is relatively busy around the Qingming Festival and will not take a holiday easily. It has been in business for more than 20 years. Xiao Wang, a truck driver, said that this is the first time he has taken the Qingming Festival holiday, and there is no clear time for work.
Recently, many weaving mills have the idea of reducing production and taking holidays. Due to the continued spread of the epidemic, the production enthusiasm of various weaving mills is generally not high. According to data monitored by China Silk City Network, Shengze area The operating rate of water-jet and air-jet looms is around 70-80%.
It is understood that at this time point, there are many manufacturers who want to take advantage of the Qingming Festival holiday. The person in charge of a company with 400 looms said: “The current operating rate of the factory is 60%, and we dare not run more machines. The main reason is that there is too much inventory. There is already about 2 months of inventory. Now the cloth price has been falling. , too much production cannot be sold, foreign trade orders have basically been cancelled, and domestic sales orders are not large. We have plans to take a holiday during the Qingming Festival. We will see what other factories do. I heard that one factory is planning to take a week off.”
All the money is spent on repayments and inventory. If you run out of money, sell goods and take out loans
There are still some bosses in the market who have very high financial pressure because their inventories are too high and the final payment has not been collected. However, they are not willing to close the factory easily. At this time, , Boss Bu will take action to sell goods.
At the end of the month, workers’ wages, water, electricity, raw materials, etc. all need to be paid in cash, and there is not so much working capital on hand, so the inventory can only be liquidated, and the goods are usually sold at very low prices. For sale, some will even be lower than the cost price. For example, a boss previously sold 600,000 meters of pongee. Its cost price was 1.7 yuan/meter, but the selling price was only 1.65 yuan/meter. If there are too many goods sold in the market, it will disrupt the market price and cause the price of gray cloth to fall again and again. The manufacturer has no profit at all.
Taking a step back, if there are traders who happen to need these fabrics or out of the mentality of stocking up (they will naturally be tempted when they see the price below cost), they will buy this batch of goods, no matter what, It also solved a big problem for the weaving factory. The worst situation is that even if the goods are sold, there is no buyer, and the cloth boss still has no money. When the editor visited, some bosses encountered this situation.
The boss of a company with 60 looms revealed: “Our customer’s order was canceled, which resulted in us having no orders to make. We have lowered the price of gray cloth, and we sell it as long as there are people who want it. But even so, not many people take the goods. It is the end of the month, raw materials have to be imported, and wages have to be paid. There is really nothing we can do. Last week we applied for another loan. , after a batch was received, we went to buy raw materials and pay wages. Our factory originally relied on loans to operate, but now it’s really worse. We can’t even earn interest every month. But we don’t dare to start work at will. , take a holiday, because once the epidemic situation improves, it will be difficult to recruit workers temporarily, but then, if you really can’t persist, you will definitely have to take a holiday.�”
Another boss came up with the idea of ”exiting the industry”, “This year’s textile industry is so bad, no one can say whether it can survive. Last year we said that we would return farmland to forests and clear out textile factories. Some companies have already agreed, but with the epidemic this year, this matter will probably have to be postponed. When I get the compensation, I plan to pay off the factory’s loan first, and then retire. Now that I am retired, I will no longer bother with textiles. ”
It is foreseeable that both domestic sales and foreign trade have been severely hit this year. The order volume of textile enterprises There will be a cliff-like decline. As the epidemic and the off-season deepen, textile companies with insufficient strength may be defeated in this battle.
If the market situation goes bad, accounts receivable will The payment problem is becoming more and more serious!
“The customer has just informed us that we should not make large quantities of goods and postpone them indefinitely. If the epidemic continues to be serious in the future, we may not want this batch of goods directly. Then we will return Can’t get the money either. “A foreign trader said helplessly.
In addition to foreign trade, many companies are also very anxious about the receivables of domestic trade customers: “When the market is bad, the problem of receivables becomes more serious because everyone has no money. This year’s situation is special. The market is weaker than the previous two years, so payment collection may have to be delayed again and again. Now the payment repayment time for our domestic trade customers is about 3 months. The previous payment time for foreign trade was shorter than that for domestic trade, but it is hard to say what will happen next. ”
When the market situation goes bad, the repayment cycle will become longer, and there may even be “bad debts”. The main reason is that everyone has no money, and end customers’ payments are not so timely, and sometimes they even bring some clothes. Debt repayment. Step by step, the weaving factory’s repayment will be even slower. In 2018, the market was good and the weaving factory had a strong voice and could require customers to settle in cash. But now the situation has taken a turn for the worse, and cloth bosses must take precautions. Otherwise, avoid bad debts.
The pressure on textile companies this year is very high. All the editor can say is “Hold on. ”, looking forward to the textile market being revitalized after the epidemic!
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