The subprime mortgage crisis became the “scapegoat” for blind expansion, and textile companies sheathed their swords and switched from offense to defense
RMB appreciation, rising raw material prices, and rising labor costs have become the “three major killers” of enterprises, but what really killed Hejun Toy Factory was not any of these three “killers.” In fact, Hejun’s bankruptcy is more directly related to the acquisition of Yatian Toy Factory, Fujian Silver Mine and other projects. The failure of diversified expansion may be behind that A direct cut.
“In addition to the impact of the subprime mortgage crisis, the bankruptcy of enterprises is closely related to the investment expansion of enterprises in the past three years, and this expansion often exceeds The enterprise’s ability to withstand risks, high debt and diversified structure make it low in risk resistance.” Yu Yaochang, executive vice president of Galanz Group, said that last year Galanz had a bank credit of 6.8 billion, but only a few hundred million were actually used, but in the end we We did not invest the remaining 6 billion yuan in this field. Facts have proved that our decision was right. Without working capital, how can the manufacturing industry continue to manufacture? This winter is a cold winter for bubble-type companies, but it is just winter for pragmatic companies. ”
The subprime mortgage crisis has now become the “scapegoat” for many companies to invest indiscriminately and expand blindly. “At the end of the year, you will find that in the annual reports of many listed companies, there will be statements such as ‘due to the impact of the subprime mortgage crisis, one of the company’s investment projects failed to achieve expected investment returns; or operating performance was poor’.” Yu Yaochang said. .
The chairman of a well-known lighting appliance company also said that the bankruptcy of these companies are all related to excessive borrowing, blind expansion and investment. They always imagine that they can catch up in a few years, but a company like GE cannot achieve success in a few years. The inevitable result of blind expansion and high-debt operations is that when the industry is in recession, it will fall into trouble or even go bankrupt.
The upstream forces the downstream to default on their accounts
The stalls located at Fumin Fabric Market in Humen Town, Dongguan City are particularly deserted. During this supposed peak season, Peng Guohong is sitting leisurely on a stool and playing with the cat. “I’m as anxious as an ant on a hot pot, but what can I do?” Peng expressed more helplessness when faced with the bill that has been overdue for three months.
“In this market, basically everyone is owed money. The market is not easy to operate in the first place. If you don’t give credit to customers, there will be others waiting for credit. Some old customers default on malicious intent, and some default on credit. Business is difficult and I really can’t make much money.” Faced with the arrears from downstream tourists, Peng Guohong is even more worried that he still owes hundreds of thousands of dollars to his suppliers.
Peng Guohong said that since 2007, the business has been barely maintaining. “A stall that hasn’t done a single order in a few months is definitely going to be overwhelmed. Since the closure of the small factory last year, business has gradually slowed down. . It is difficult to see foreigners coming to purchase in the entire Fumin Fabric City, and there are many fewer Hong Kong businessmen.” Coupled with the rising prices of raw materials, Peng Guohong is more cautious when purchasing goods.
“The fabric that used to cost 9 yuan a piece is now sold for 12 yuan a piece. The supplier’s asking price is much higher than before, but the purchaser is very sensitive to the price and the texture of the fabric, which directly leads to the goods not being sold, but Even if you can’t sell it, you have to find a way to pay back the money, otherwise the supply will be out of stock.”
In addition to dealing with the relationship between suppliers and customers, Peng Guohong also has to pay 1 RMB per month for his stall of less than 10 square meters. The monthly rent of 10,000 yuan, “
We are like a child standing in a big crowd. Not only can we not pay other people’s accounts, but also our account periods have been repeatedly extended by large downstream customers.”
Tightening monetary conditions push up corporate financing costs
Being chased for debt by the supplier caused the bank to freeze the account. As the new year is approaching, whether it is small merchants or small and medium-sized enterprises in the accessories city, you can hear the sound of bank debt collection at the door.
“Now is a difficult time for us. Not only can we not get a loan from the bank, we also have to find a way to repay this year’s debt.” As one of the industries most severely affected by the foreign trade dilemma, Zhantian Textile Group Chairman Li Yonggen is quite troubled by the bank’s credit policy.
“The current situation is becoming more and more severe, with financing difficulties and rising costs.” Li Yonggen told this reporter that the interest rate for loans from commercial banks is now about 11.3%, which includes the costs of the guarantee company and the bank’s own increase in accordance with regulations. part. The interest rates for private loans are generally between 20% and 30%, and the financing costs alone have increased by nearly 50%.
Since 2007, China’s series of tightening policies have increased operating pressure on small and medium-sized enterprises. This phenomenon has already manifested itself in the second half of last year. Last year, the central bank raised interest rates six times and tightened credit. Statistics show that of the total national credit balance, small and medium-sized enterprises only account for 22.5%, and since September last year, they have only accounted for 15%. Especially in areas such as Zhejiang, the scale of credit provided by the four major state-owned commercial banks to small and medium-sized enterprises has decreased. 25%.
On October 29, the People’s Bank of China decided that from October 2019Starting from the 30th, the benchmark interest rate for RMB deposits and loans of financial institutions will be lowered. The one-year deposit benchmark interest rate will be lowered from the current 3.87% to 3.60%, a decrease of 0.27 percentage points; the one-year loan benchmark interest rate will be lowered from the current 6.93% to 6.66%, a decrease of 0.27 percentage points. 0.27 percentage points. This is the third time China has cut interest rates in one and a half months, but the industry generally believes that companies will not be able to reap the benefits in the short term. “Adjustments of a few points can only be a drop in the bucket for enterprises.” Li Yonggen said.
Next spring and winter are coming
Many companies say that what they can do now is to endure and shrink the front line.
Peng Guohong said that the characteristic of the textile and garment industry is that there is a relatively long delivery period from the purchase of fabrics to the production of sample clothes to mass production and sales. “This delivery period is usually half a year, and many factories are currently using the grain stocks at the beginning of the year.” Based on this calculation, Peng Guohong came to the conclusion that starting from June this year, the export orders that continued to decrease in July and August will gradually decrease at the beginning of next year. Manifest, “It’s not a bad time yet.”
The common view in the industry is that if the situation does not improve in February or March next spring, the industry will face a severe winter.
If the components of the chain are still waiting and watching, then those who stand on the chain and see the overall situation appear to “stand higher and see further.” Zhu Wenxin, the founder of China’s first clothing industry management consulting company, called on all companies to start “shrinking” as soon as possible: borrowings that should be recovered should be recovered as soon as possible, investment should be shrunk as soon as possible, and “war zones” should be shrunk as soon as possible from key points.
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