This year’s textile market is difficult! Disaster! Disaster!
Whether it is other regions or the surrounding areas of Jiangsu and Zhejiang, the textile market is indescribable. Crazy production capacity expansion, production capacity transfer, and blind production have resulted in huge overcapacity. Weaving manufacturers have difficulty in balancing production and sales, and the textile market is going downhill.
Coupled with the ups and downs of the foreign trade environment, it is difficult to have direct benefits. The textile market lacks upward momentum, and companies are more or less under financial pressure. In addition to the blind expansion of the companies themselves, the difficulty in receiving orders also puts companies under great pressure.
Conventional varieties are not popular, and the market is not sustainable
The textile market is not good, and clothing manufacturers have also changed their ordering methods, mostly focusing on small batches and multiple batches. , resulting in textile companies having few large orders and mostly small orders. Especially in the off-season of July and August, selling goods is common in the market, but the cruel thing is that if you sell it, no one may want it.
After entering September, the market conditions began to become warmer, mainly autumn and winter fabrics, which led to a wave of goods sales by weaving manufacturers, but it is expected that this wave of market conditions will not last long. . Negative cuts and production shutdowns continue in the market. It is difficult to receive orders, and the most direct result is that the inventory of gray fabrics remains high!
The market is still silent. It should have been the bustling production time for gold, nine and silver ten orders. However, in fact, the number of relevant orders received by various textile companies is far less than in previous years. Most of them are doing All of them are autumn and winter orders. It can be said that the recent spring and summer clothing orders in the textile market are absent. Because the clothing sales side still has a large amount of spring and summer clothing in stock due to the impact of the epidemic at the beginning of the year. The spring and summer market next year is basically a function of digesting inventory, so there is no need to place this order again and increase inventory.
For the vast majority of textile companies, even if there are no orders, they will not easily suspend production and take holidays, especially various textile factories. Because once a long holiday is taken, it is easy to cause the loss of workers, and it will be more difficult to resume production. Without orders, work cannot be stopped, and the resulting expenditures on labor, water, electricity, environmental protection, etc. will greatly increase the company’s operating costs.
There are many textile companies in the market that have received orders, especially foreign trade orders. However, receiving orders now is not necessarily a good thing for them. Raw materials have risen sharply and the prices are astronomical. Shipping costs are aggressive, and according to the current market conditions, profits of most companies have been significantly reduced or even lost money.
The boss is unable to repay workers’ wages
Due to the downturn in the textile market in the past two years, especially due to the epidemic this year, it is very common for textile companies in many places to suspend production and close down. Not only some small-scale companies, but also some well-known companies have also gone bankrupt. Dilemma.
The biggest reason for business collapse is the break in the capital chain, which has resulted in many bankrupt textile companies not having enough funds to pay workers’ wages.
High inventory, longer payment terms, and difficulty in capital turnover
It’s not just bosses who are on the verge of bankruptcy who have a tight capital chain. This year, it can be said that 70 to 80 percent of bosses have encountered financial constraints at one time or another, especially companies with a large proportion of foreign trade business.
A company that produces peach skin and pongee said: “Basically all our foreign trade orders were stopped in the first half of this year. Funds were very difficult at that time, and the factory’s Workers’ wages are paid every three months, and hundreds of looms in other places have also been stopped.
Many cloth bosses said that after so many years of work, this year is In the most difficult year, in addition to reduced profits, high inventories and longer payment terms were also the most important reasons for the difficulty in capital turnover of textile companies. It is reported that a boss who produces imitation memories in Jiangsu and Zhejiang said that some regular items in their factory this year The inventory of each variety of polyester taffeta exceeds 500,000 meters, which means that millions of funds are occupied. The inventory cannot be cashed out, which means there is no working capital, and there is no way to buy raw materials, pay wages, etc.
How to alleviate financial pressure?
Therefore, how to alleviate financial pressure next? , one is to reduce inventory, by reducing production, selling goods at low prices, etc., and the other is to collect payment in time. If receivables cannot be collected, the pressure is still on the enterprise.
Now Today, the market is still relatively sluggish and transaction risks are high. Production decision-makers should face this situation calmly and ensure the stability of existing customers; strengthen their own immunity, guard against arrogance and impetuosity, maintain product quality internally, and maintain market communication externally. Strengthen the concept of production and marketing; be honest and trustworthy, do not agree easily, and do it when you agree; keep a broad mind, actively communicate and learn from each other’s strengths. Only in this way can the capital and manpower in hand be truly transformed into productivity that causes self-change.</ p
