Guangdong textile and garment enterprises suffered losses of more than 20%

Guangdong textile and garment enterprises suffered losses of more than 20%

From January to October last year, the gross profit margin of the national textile and apparel industry was 10.57%, the net profit margin was only 3.83%, and the company’s loss rate reached 17.68%.

As the province with the third largest number of textile enterprises in the country, Guangdong’s textile industry’s profit margin ranks only eighth, lagging behind Hebei, Henan, Shandong and other provinces, and lower than the national average; its losses are as high as 21.05%, exceeding the national average.

Data from the National Bureau of Statistics show that from January to October last year, the gross profit margin of the national textile and apparel industry was 10.57%, the net profit margin was only 3.83%, and the corporate loss rate reached 17.68%.

What is particularly concerning is that as the province with the third largest number of textile enterprises in the country, Guangdong’s textile industry’s profit margin ranks only eighth, lagging behind Hebei, Henan, Shandong and other provinces, and lower than the national average. level; the loss was as high as 21.05%, exceeding the national average.

In an interview with this reporter, Fan Min, chief analyst of Textile.com, pointed out that the central government has clearly proposed the implementation of a tightening monetary policy. Since textile companies have long-term low profit margins, their funding needs are relatively dependent on bank credit. high. “Once money tightens, the textile industry will face great financial risks. Under the current severe situation where losses have exceeded 20%, if we do not maintain a clear mind and sound business ideas, more companies will face being eliminated in 2019 risk.”

The profit margin of Guangdong textile companies ranks only eighth in the country

Currently, the number of textile enterprises in Guangdong ranks third in the country, but its profit margin from January to October last year only ranked eighth in the country, lower than Hebei, Henan, Shanghai, Zhejiang, Fujian and Shandong and other provinces, and it suffered losses. The area is larger than these provinces and regions.

Why is the scale large but with low profit margins and large losses? Industry insider Ma Xinzheng analyzed that this is mainly because Guangdong Province’s textile industry is too export-oriented. It is the largest textile and clothing export province in the country. The province’s textile and clothing industry The export proportion is also as high as 46.2%. It has been hit hardest by a series of policies such as the appreciation of the RMB and the reduction of export tax rebate rates among all provinces and regions. At the same time, many of Guangdong’s textile and garment exports are still processed for sample processing and OEM production, which can only earn a small amount of processing fees. The impact of the country’s adjustment of processing trade export policies last year was also large.

In comparison, Shandong’s textile industry has a much greater scale advantage than Guangdong, and its export ratio is only 0.73 times the national average, indicating that it is mainly targeted at the domestic market and has higher profit margins than exports.

The operating rate of the national textile industry is less than 70%

Due to the influence of a series of policies, the current situation of the textile industry is not optimistic. Data from the China Textile and Apparel Industry Association shows that among the more than 40,000 domestic textile companies in the first three quarters of last year, less than one-third had a profit margin greater than the industry average of 3.83%.

Companies with different strengths have very different profit margins. On the one hand, strong companies accounting for 8.9% of the entire industry have average profit margins as high as 31.71%; on the other hand, more than two-thirds of companies have profit margins below the average, with the average profit margin of these companies being only 0.61%. , down 0.42 percentage points from the same period last year, with a total loss of 9.9 billion.

The survey also shows that currently less than 70% of the overall domestic textile production is operating, and the phenomenon of enterprises reducing and suspending production is quite serious, mainly among some small and medium-sized textile enterprises. However, based on optimistic expectations for the future domestic economic situation, the current textile industry across the country has always believed that it can survive and develop by expanding its scale and continuously technological transformation, causing the investment growth rate of the entire industry to run at a high level.

From January to October last year, fixed asset investment in the textile industry was 203.163 billion yuan, a year-on-year increase of 31.75%, and the growth rate was 6 percentage points higher than the first half of 2007. Such rapid growth in fixed asset investment indicates from one aspect that the current textile industry is likely to bear the brunt of the shock wave of monetary tightening.

Fan Min further stated that the textile industry next year will also be affected by the fourfold impact of the accelerated appreciation of the RMB, the reduction of export tax rebates, trade frictions and the implementation of the new version of the Labor Contract Law, and the outlook is not optimistic.

New labor law challenges low-profit labor-intensive characteristics

“The Labor Contract Law, which will be implemented from this year, will pose a challenge to the low-profit and labor-intensive textile industry.” Fan Min pointed out that a considerable number of companies have already expressed concern about the “employment, compensation and leave” in the new law. The harsh provisions show concern and concern.

At present, the implementation status of the “Labor Contract Law” of my country’s small and medium-sized textile enterprises is not optimistic. “A considerable number of enterprises do not fully comply with the Labor Contract Law and its relevant regulations, and there are various violations of laws and regulations. If these enterprises are required to fully comply with the relevant provisions of the new Labor Contract Law in the short term, it will inevitably cause consequences. The costs of a large number of small and medium-sized enterprises have increased significantly.”

At the same time, the implementation of the new law and its supporting regulations has put forward higher requirements for the textile industry with high production and delivery time requirements and a high degree of marketization. Management costs will increase accordingly, and management difficulties will be further increased.

Fan Min also predicted that due to the high contribution rate of the textile industry to the increase in foreign exchange reserves, there is an expectation that the export tax rebate rate will be reduced for the textile industry this year.Of course it’s very strong. He pointed out that the export tax rebate policy will also likely be further tilted towards optimizing the product structure. For varieties involving environmental protection and ecological environment changes, the export tax rebate rate is very likely to be further reduced, such as cashmere and leather products.

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