Zhangcha Knitting Industry Under Fluctuation Of Cotton Price

At the beginning of spring in March this year, many clothing The general rise in ex factory prices seems to have made a bad start to the clothing industry this year. Clothing wholesalers and related enterprises have said that the purchase price has risen twice in the first month of spring, which has never happened in the industry. However, many enterprises still resisted the pressure to raise prices. At that time, many insiders had a premonition that "business will be difficult this year".

The "premonition" of these enterprises finally became a prophecy in the autumn. The continuous rise of clothing prices in autumn and winter not only doubled the pressure on enterprises, but also many citizens had already smelled the violence of the storm as early as possible, so they should get ready for cold clothing before the clothing prices in the Spring Festival rose again. What really makes enterprises complain is that because of the rise in cotton prices and the shortage of cotton yarn, they dare not take orders even if there is a continuous flow of orders. They can only give up the "fat meat" they have.

This can also be seen in the impact of the Zhangcha knitting industry, which is still in the transition stage. Although cotton prices have fallen in recent days, the hesitation of garment enterprises has not weakened under the shadow of the price rise storm for several months. Since November, many Weaving enterprises It has been in a state of shutdown, and several large enterprises also said that the increase in cotton prices has resulted in the profit being squeezed to a minimum.

While experiencing the struggle at the center of the price rising storm, many knitting enterprises have realized that the raw material link that has held the enterprise's "throat" for many years needs to be improved urgently, and they have to make every magic weapon to break free from the shackles.

　　 Cotton price "high fever" burns knitting enterprises

The cotton price rise, known as the once-in-a-decade event, has caused a chain reaction across the country. The change of market price has made many clothing shopkeepers and citizens feel "unbearable". The shopkeeper who runs clothing business in Foshan Garden Shopping Plaza told the author that since the "season change", the purchase price of the same coat has risen twice, and the shopkeeper had to raise the price to sell.

The onset of the syndrome of rising cotton prices also led to the spread of printing and dyeing, clothing, accessories manufacturing and other links, and many related enterprises were burned by the "high fever" of cotton prices.

At 9 o'clock last Thursday, the security guard at the gate of Foshan Everbright Clothing Co., Ltd. was busy checking the vouchers of vehicles entering and leaving the factory. Here, a truck comes in and out every 5 to 10 minutes. But in fact, there are also hidden worries of business owners behind the prosperity.

"The rise in cotton prices has cut profits even more severely than it did during the financial tsunami." Tan Mingkuang, the chairman of the company, could not help sighing that cotton prices have risen to varying degrees every year, even though they have fluctuated in business for decades, since the reform and opening up, there has never been any raw material It has been such an "outrageous" year.

Cotton production across the country was reduced. The rise of cotton prices directly led to the soaring of cotton yarn prices, and many enterprises were unprepared for the large increase at the beginning. "In recent years, the price of cotton has remained at about 10000 yuan/ton, while the price of cotton has soared three times in the past. A ton of cotton yarn used to cost only 26000 yuan, but it has nearly doubled to more than 50000 yuan in the past!" Tan Mingkuang said that this has had a great impact on his enterprise.

In addition, many small enterprises in Zhangcha knitting industry are responsible for processing, and the reduction of terminal sales orders directly leads to the shutdown or bankruptcy of these small and medium-sized enterprises. Avi, who has operated the weaving factory in Zhangcha for 13 years, told the author that the business was relatively prosperous in November last year, but there was no business at all at the same time this year, and the whole factory's eight machines were basically in a shutdown state.

"It is expected that our annual income will decrease by 20%." He said that the profit of processing is very low, and the profit has decreased year by year in recent years. If the market situation continues to deteriorate, many enterprises will face the danger of bankruptcy.

　　 Take the initiative to deepen transformation and "ensure sales"

Due to the soaring price of raw materials, Foshan Everbright Garment Co., Ltd., as the "leader" of Zhangcha knitting industry, had to ask customers for price increases, and its products generally rose by 20% to 30%, which made many customers "unable to eat" and unable to place orders. What really makes clothing enterprises suffer is that they may not be able to buy cotton yarn even if they order it in advance. After the cotton yarn is ordered with money, the cotton yarn factory does not deliver or raises the price again from time to time.

This directly led to the loss of nearly 40% of the orders of the enterprise, and Tan Mingkuang was helpless about the loss of these orders, "Our annual total sales will generally increase by 20% to 30%, and even 40% in the best year, while this year's total sales can only be the same as last year or increase slightly," said Tan Mingkuang.

"In the past, even waiting for the hare can create good sales performance, but now if you don't take the initiative, you can only 'sit on the fence'." Tan Mingkuang said that although his enterprise's profit space has been reduced, the overall sales of the enterprise has not declined significantly, thanks to the early "crisis" awareness, so that Everbright Garments made early preparations for prevention.

According to him, Foshan Everbright Garments Co., Ltd. has set up a foreign trade development department as early as 2006, which regularly organizes personnel to participate in exhibitions around the world and promote its image and self marketing on the Internet. In addition to stabilizing the resources of frequent customers, it has also taken the initiative to tap a large number of new customers.

And some knitting enterprises in Zhangcha also jointly formulated the first mercerized cotton knitting T-shirt alliance standard last year, which promoted the knitting industry to gradually form a high-end product market and regional brands. Compared with the traditional business model of "waiting for the hare", many enterprises in Zhangcha knitting industry have felt the importance of "taking the initiative" to deepen the transformation.

　　 Enterprises expect to fight together

Although the cotton price has fallen recently, Tan Mingkuang and many business owners are still worried that the situation will be worse next year: although the cotton price has stabilized recently, the uncertainty of the cotton price makes it difficult for many enterprises to make the following decisions. According to the China Cotton Research Institute, the industry's expectations for the first quarter of next year are not very clear.

Wu Haoliang, secretary-general of Foshan Textile and Garment Industry Association, said that although many domestic cotton mills have established sales offices in Zhangcha, there are not many local cotton mills. 90% of Zhangcha's cotton yarn is purchased from other places, which poses a great obstacle to the supply of raw materials. The impact of the uncertainty of raw material prices on knitting enterprises has not yet reached its peak. It is expected that the impact will be even worse in the first quarter of next year. It is not ruled out that some enterprises will close down because of this.

At present, many enterprises in the market hoard and are reluctant to sell. Terminal sales enterprises cannot buy cotton yarn, and even if they have paid a deposit, they are unable to pick up goods from time to time. Liu Bisheng, chairman of Foshan Antony Knitting Co., Ltd., said, "It's hard to get stuck in the neck by others for many years.". In recent days, he has been thinking about the future of the enterprise. He believes that the whole industry should "learn from the pain" and fight together.

"At present, the integration of the upstream and downstream supply chains of Zhangcha knitting industry is an urgent problem to be solved, and it is also the most serious problem." He believes that if the various chains from raw material procurement to manufacturers and final distributors are well integrated, this "price rise event" will not have a major negative impact on the entire industry, but the enterprises in Zhangcha are developing in a decentralized manner, Some enterprises drive up prices for their own development, and even use fraud and deception to gain benefits. These phenomena have damaged the image and interests of the entire industry.

He called on all sectors of the industry to negotiate and reach cooperation intentions to jointly overcome this difficulty.

　　 Extended Reading

Shortage of human resources promotes the promotion of knitting industry

It is worth mentioning that the shortage of human resources is another problem that the whole Zhangcha knitting industry is facing. Since the beginning of the year, the whole industry chain has begun to face this dilemma.

On the one hand, it is the pressure of rising wages of employees, and on the other hand, it is impossible to recruit people. Avi, the head of a weaving factory in Zhangcha, said that the wages of ordinary workers in the industry were about 1000 yuan/month in 2000, but had risen to 2300 yuan/month at the beginning of this year. The cost of ordinary human resources has risen by 300 to 400 yuan, but it is still difficult to retain talents.

In fact, many business owners have realized the seriousness of "labor shortage", and the shortage of human resources has forced enterprises in the industry to upgrade their industries or seek other ways.

Tan Mingkuang told reporters that Foshan Everbright Clothing Co., Ltd. had more than 2000 employees in its heyday, but now there are only more than 1000 employees left in Zhangcha headquarters. The hidden worry of lack of work forced him to look to a more far-reaching place. At the beginning of this year, Everbright Garments was built and put into production in Zhuzhou, Hunan Province. At present, it has more than 500 employees, which has eased the recruitment problem to some extent.

In addition, the industrial park established in Zhangcha in recent years has provided a good production and operation environment for many enterprises and labor force. Among the five major construction projects launched by Zhangcha this year, Zhangcha Knitting Textile International Expo City is one of the highlights. It covers the functions of product trading, exhibition, research and development in the upstream and downstream circulation of knitting, with a total investment of 5 billion yuan.

Lou Jianfeng, from Deqing County, Zhaoqing City, has been "working" in Guangzhou's garment factory. Since he mastered the skills of clothing, he can generally get a salary of 3000 to 4000 yuan per month, and even get a salary of more than 5000 yuan in months when he worked hard and worked overtime. However, the bad working environment, excessive overtime and other reasons make him always think about "changing careers".

He had been waiting for work at home for several months when he wanted to change his career. Recently, due to the pressure of life, he had to return to the knitting industry and became a "lathe worker". However, this time, he changed his job to another city, and came to Zhangcha, Foshan to work in a clothing factory in Jade Belt Clothing City.

In Yudai Garment City, there are not many skilled lathe workers with six or seven years' working experience like him. Generally, young people will change careers after working in the garment industry for two to three years. It is an unwritten secret in the industry that the job mobility is fast. When Lou Jianfeng came here, he felt "much better" than Guangzhou. Although he still needed to work overtime to "catch up", the improvement of the working environment and the increase of his salary gave him confidence to continue to stay in the industry.

Upgrading the old property and factory buildings, or using the industrial park model to make industrial intensive development, is the development path of Zhangcha knitting in recent years, which plays an indispensable role in industrial upgrading and talent retention.

　 Industry voice

Establish exclusive raw material base for Zhangcha

The "price rise storm" of cotton seems to have subsided, but it is still surging. What can Zhangcha knitting industry rely on to withstand this storm? After this event, how can the whole industry improve? How can Zhangcha knitting industry defend against another rise in cotton prices?

Tan Mingkuang believes that the Zhangcha knitting industry is large in scale, but not high in grade. At present, most enterprises are only responsible for processing, and there are many small and medium-sized enterprises, but few enterprises are responsible for terminal product sales. He said that 80% of the cloth in the Zhongda cloth market comes from Zhangcha, but most enterprises in Zhangcha can only get a small part of the processing fees from it. "The price of a ton of cloth is generally 60000 to 70000 yuan, but the processing cost is only about 1000 yuan," he said.

He said that Zhangcha knitting industry must develop the sales link of end products and improve the industry level to continue to develop healthily.

Wu Haoliang believes that the industrial structure of Zhangcha knitting industry needs further improvement. As Guangdong does not produce cotton, the cotton price fluctuation will affect local enterprises. If a relatively stable source of raw material supply is established, this problem will be solved. He suggested that garment enterprises could jointly or take the lead of the government to purchase cotton bases in Xinjiang or other cotton producing areas to build a raw material base belonging to Zhangcha.

　　 Liu Bisheng said that Foshan Anthony Knitting Co., Ltd. has reached deeper cooperation with cotton producers. He said that at present, his enterprise has not been able to acquire the cotton production base, but with the continuous improvement of Zhangcha knitting industrial structure and the continuous development of the enterprise, this is also a major direction of future development.