Shaoxing’s export-oriented textile enterprises seek development amid crisis
At present, the international financial crisis continues to penetrate into the real economy, bringing great survival pressure and difficulties to the manufacturing industry. In Shaoxing County, Zhejiang Province, two-thirds of textile products are sold to the international market. If consumers tighten their wallets and buy one less piece of clothing per person, it will put huge pressure on suppliers to survive.
Against the background of sluggish international market demand, the Shaoxing County Committee of Zhejiang Province proposed a transformation and upgrading strategy in an effort to enable export-oriented textile enterprises to maintain smooth operations.
Finding hope in adversity
“The financial crisis has significantly reduced orders from the European and American markets. More than 200 people in the company have to pay wages, and bank interest has to be paid. At that time, I felt like I was pushed to the edge of the cliff.” Shaoxing Inuo Printing and Dyeing Co., Ltd. What Chairman Qin Liangzhou said reflects the feelings of some local textile business operators.
There are many small and medium-sized enterprises like Ino in Shaoxing. Their annual output value generally ranges from tens of millions to one to two hundred million yuan. Most of their products are exported, and their independent research and development capabilities are weak. For many years, these companies have mainly maintained their existence by “processing according to supplied samples”. No matter what material or color the external orders are, they are only responsible for taking orders and producing them. Although the profit margins of this business model are generally low, during the booming European and American markets, these small businesses were doing pretty well.
However, the spread of the financial crisis in a short period of time has had an adverse impact on these companies. Qin Liangzhou said that in September and October last year, textile companies similar in size to Inno began to become nervous due to the impact of the international market. But after a brief panic, Qin Liangzhou immediately started his action. Since the shrinking market cannot recover in the short term, we should start with internal management to save costs and improve efficiency. The company promptly adjusted the market direction of its products and transferred products exported to the European and American markets to Africa. Qin Liangzhou said: “Nowadays, foreign businessmen do not place an order for half a year’s demand as they did in the past. What is important at this time is confidence. Although our output value dropped from 100 million yuan the year before last to 70 million yuan last year, and the profit has become very meager, but We have not cut employees’ salaries, this is also to encourage everyone to get through it.”
Looking for business opportunities in crisis
The export-oriented Zhejiang Red, Green and Blue Textile Printing and Dyeing Company has mastered advanced digital printing expertise and developed thousands of new patterns last year, becoming an effective weapon for market expansion. Sales manager Xiao Jianyao said: “Last year we participated in many professional exhibitions at home and abroad. Because we have accurately positioned our products in the mid-to-high-end market, although orders dropped slightly after the financial crisis hit, the company quickly stabilized its position. .” Now, the company’s daily output has been reduced from the original 210,000 meters to 90,000 meters. However, the price of the same type of fabrics, red, green and blue, is 40% to 50% higher than that of its peers. The profit in 2019 has doubled compared to 2007. twice. Xiao Jianyao is confident about the market situation in 2019. The company raised the price of its products in February, but still maintained a sales growth rate of 10%.
Xinle Textile Co., Ltd. is unique in creative fabric design. In the first two months of this year, the company continued to maintain growth momentum. They incorporate Chinese elements into popular works, and the R&D center launches thousands of new products to the market every year. Last year, sales contracts worth more than 400 million yuan were basically signed by shirt companies on their own initiative.
Similarly, in the crisis, Tiansheng Holdings Co., Ltd. also operated vigorously. Last year, Tiansheng’s sales reached 6.6 billion yuan. Chairman Sun Yonggen said: “I believe that Shaoxing’s textile industry will not recover because of this financial crisis. Because the consumer market will never disappear, the key is to find products suitable for the market.”
Yuewang Holdings Group is a non-woven fabric manufacturer. In the past, downstream companies purchased and processed the non-woven fabrics produced by Yuewang Holdings and made them into medical masks, diapers, wet wipes, and disposable wipes. The added value of the products increased Several times. After extensive and in-depth market research, Chairman Gao Hagen found that in Europe and the United States, the per capita annual consumption of non-woven fabrics is 20 kilograms, while in China it is only 0.5 kilograms. This made him aware of the market potential of non-woven end products. As a result, the company’s research and development of new products quickly followed. Nowadays, the wet wipes and disposable wipes developed by Yuewang Holdings have been launched. After the group’s new factory is completed, more non-woven end products will be introduced to the market.
The shrinking export market has caused more companies to look for new opportunities and develop new products. Currently, the monthly orders of the Zhejiang Modern Textile Industry Research Institute in Keqiao have increased from 200 to 300. Due to rapid business growth, in addition to designing in-house, Dean Hu Keqin also outsources part of the business to Korean design institutions. He said, “The market is sluggish and foreign businessmen are not sure which products will sell well. At this time, smart entrepreneurs should take the initiative to provide new products for foreign businessmen to choose from and strive for more opportunities.”
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