Another textile town fell! Haining Warp Knitting Industrial Park is located in Maqiao Street, Haining City. All warp knitting companies in the industrial park will stop on the 5th, and the restart time is to be determined.
The situation in the textile market this year can indeed be described as “bleak”, and it is the worst year in recent years. Textile companies have high inventories, finished goods cannot be shipped out, raw materials cannot come in, and many companies have gone on holidays, reduced burdens, and stopped production.
The recent epidemic situation has been tense and control efforts have been tightened. Textile companies generally face problems in the transportation of raw materials and products, and insufficient production capacity. At present, the order situation is temporarily stable, but the rising costs of various types have led to high production costs for enterprises. Therefore, Boss Bu made a calculation: Stopping production will not make a loss but save money!
The factory’s daily production costs are high!
Next, let’s calculate the factory’s monthly expenses! Take a textile factory with 200 water-jet looms as an example.
01
worker’s salary
The first is worker wages. The salary for a driver is 9,000 yuan/month. Other positions with lower wages are also 5-6,000 yuan/month. Generally, a factory needs to be equipped with 20-30 workers, so the monthly salary cost is at least 200,000 yuan.
02
Factory rental fee
In terms of rent, if it is a leased factory, there will also be rental fees. The current factory rent outside is 60-70 yuan/year/square meter. 200 machines require 2,000 square meters of factory space, and the annual rent is 120,000-140,000 yuan.
03
Production management fee
Normal production every day also needs to add other expenses such as raw materials, water and electricity, financial management, etc., so the cost of weaving per day is about 40,000 yuan, and the monthly cost is 1.2 million.
But what is even more chilling is that even if they are produced, not all of them may be sold, and there will still be inventory left, and even more and more of it will become more and more tired. It is reported that most factories currently have inventories of more than one month, and this part of the inventory also takes up a lot of funds. If calculated based on the price of 1 yuan/meter of 190T polyester taffeta sold in bulk, 1 million meters of inventory will occupy 1 million yuan of funds. In addition, due to recent logistics control reasons, some produced gray fabrics cannot be distributed, and the funds occupied have increased.
Based on this calculation, the weaving factory requires about 1.5 million yuan of funds for normal production for one month, and the inventory will also occupy more than 1 million yuan of funds. This cost indeed poses a great challenge to the factory’s capital flow. If production ceases, many expenses will not be incurred. For example, workers’ wages, according to Boss Bu, can be reduced or reduced if production is suspended due to epidemic control. In addition, after the production is stopped, there will be no other expenses such as raw materials, water, electricity, and financial management. The inventory will no longer increase, the funds occupied are reduced, and the inventory of gray cloth can still be sold, and there is still income. Therefore, for some cloth bosses, instead of producing inventory every day and unable to sell it, it is better to stop the machine, sell the inventory, and withdraw funds. In this way, the suspension of production does not cause a loss, but also saves money!
It was supposed to be the shipping season, but there are rumors of production discontinuation!
In fact, in early February, most weaving manufacturers’ gray fabric sales performed well, and even showed the momentum of “Red February”. But it was quickly extinguished by the fierce epidemic, and until now, it remains unremarkable.
At present, due to epidemic control, transportation and logistics are restricted, and goods transportation is difficult, resulting in a sharp decline in residents’ clothing consumption, and clothing factories have reduced orders or even canceled orders. Some companies said that even if there are orders at present, they are accepted at low prices, or the prices given need to be competitive. If they can accept them, they will get orders. If they don’t, they can only be done by companies that can end it.
According to the sample data of Silkdu.com, it can be seen that in late February, the Shengze area entered the inventory accumulation stage, and the current market inventory is still at a high of about 34 days. Inventory is at a high level during the year, and difficulties in destocking have become a “common problem” for weaving manufacturers, which has also led to weaving manufacturers having a difficult time with orders. Although the market is currently in the traditional peak season, it is difficult to reverse the high inventory situation due to the imbalance between supply and demand.
The cost of raw materials is high and the selling price of gray cloth is low.
In addition, another recent change is that the prices of raw materials cannot go up. Even if they go up for a while, they will soon fall again. “Buy up, not down” has always been an old saying in the raw material market. The outbreak of production and sales of polyester factories often coincides with the rise in raw material prices. As for the textile raw materials themselves, the more they buy, the more they go up, and the more they go up, the more they buy. But this situation has changed a lot this year. No matter whether the price of raw materials rises or falls, weaving…Businesses don’t buy it anymore. Weaving companies no longer follow the trend and adopt a wait-and-see attitude in the face of rising raw material prices. Polyester yarn production and sales continue to remain low, and price increases have come to an end.
Basically all textile bosses said that the market profits this year are less than in previous years, mainly because the price of raw materials has been at a high level this year. Especially for polyester filament, even if there is a promotion, it will immediately return to its original position. In essence, it has not dropped by a large number. In addition, there are few hot-selling varieties in the market and competition is high. Weaving manufacturers use low-price competition to obtain orders, so that the original low-priced gray fabrics The price is being pushed down again and again.
To sum up, for weaving factories, in such a turbulent environment, it is not surprising to reduce or suspend production, and it is not a loss, but it saves a lot of money!
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