Since the beginning of this year, the COVID-19 epidemic has broken out in many places across the country, which has had a certain impact on the production and operations of many companies. In particular, the chemical fiber industry has also encountered multiple challenges such as rising oil prices, weakening demand, and logistics obstruction, and the operating pressure of the industry has increased significantly. However, many companies have realized that special times are also the best time to practice “internal strength”. The China Chemical Fiber Industry Association issued an initiative: Face uncertainty and do things with certainty.
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The industry is in a stable but worrying situation
Data from the National Bureau of Statistics show that from January to February, chemical fiber output was 10.154 million tons, a year-on-year increase of 3.01%; operating income was 147.75 billion yuan, a year-on-year increase of 14.6%; total profit was 4.51 billion yuan, a year-on-year decrease of 32.7%. Entering March, under the circumstances of high costs and weak demand, coupled with logistics obstruction caused by the epidemic, chemical fiber inventories gradually accumulated to high levels, the industry’s operating rate declined, and profit margins and processing intervals were further compressed. The overall industry performance in the first quarter was ” The operating characteristics of “stable but worried”. Since then, as the epidemic control has improved, the production and operations of some enterprises have improved.
As an industry leader, Hengli Group’s production and operations have also been affected to a certain extent. The production capacity and production and sales rate of the group’s downstream chemical fiber textile sector have declined slightly, and inventories have increased. As of the end of April, the production and sales rate of the chemical fiber sector had only rebounded slightly.
In terms of employee arrival rate, Hengli Group’s chemical fiber segment did not suspend production during the Spring Festival due to the particularity of continuous production, and employees “celebrated the New Year on the spot”, so there is no employee shortage for the time being. After the Spring Festival holiday in the textile sector, due to the lockdown in some areas, personnel were unable to arrive at work normally, resulting in a decrease in the start-up rate. Migrant workers from the central and western regions were reluctant to come to Jiangsu to work due to the epidemic, and it was difficult to recruit workers. During the lockdown period, the food and lodging of logistics drivers and employees were all provided by the company, which virtually increased management costs.
Especially in terms of logistics, due to the continued increase in epidemic prevention and control efforts, Hengli Group’s logistics has encountered serious problems. Due to inconsistent prevention and control standards among regions, cargo transportation efficiency has dropped significantly and logistics costs have increased significantly; exports have also been affected.
At the same time, in terms of project construction, the construction period of investment projects has been greatly delayed due to the shortage of construction workers and poor transportation of construction materials. The import and export of equipment and raw and auxiliary materials have also been greatly affected by the epidemic prevention and control at major ports in Shanghai. Influence.
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Facing uncertainty, do certain things
Special times are also the best time to practice “internal strength”. In the face of uncertainty, do what you are sure of and be your best “self”.
Chen Xinwei, President of the China Chemical Fiber Industry Association, mentioned in his interpretation of the “Guiding Opinions on the Development of High Quality in the Chemical Fiber Industry” that with the severe situation at home and abroad, industry enterprises have continued to You may face an extremely difficult period down the road. To this end, he suggested that industry enterprises should first carry out industry self-discipline and prevent operational risks. In the context of high inventories and low profits, as well as high uncertainty in oil prices and the risk of outflows of textile and apparel orders, it is recommended that chemical fiber companies strengthen industry exchanges and collaboration, and appropriately and simultaneously reduce burdens and production. At this stage, the focus is on digesting inventories and stabilizing market prices. Mainly, avoid price fluctuations and ineffective vicious competition. In addition, accounts receivable must be strictly controlled to ensure the safety of the cash flow capital chain.
The second is to pay attention to environmental changes and policy trends and formulate response strategies. It is recommended that enterprises comply with local epidemic prevention requirements, explore nearby markets, compress the procurement and sales radius, and use “small circulation” within provinces and regions with relatively small logistics restrictions to relieve sales pressure and reduce logistics costs. At the same time, we will strengthen online exchanges and communication with overseas customers, and formulate special overseas customer maintenance and service plans to avoid customer loss after the epidemic.
Third, in special periods, we can focus on energy conservation and consumption reduction to reduce costs and increase efficiency; we can use the shutdown period to carry out equipment upgrades and transformation, especially to accelerate the advancement of informatization intelligentConstruction; actively seek breakthroughs and adjustments in product innovation to increase the added value of products; comprehensively improve production management levels and create efficient and agile operating capabilities to help reduce costs and increase efficiency; think about the future and formulate medium- and long-term development strategies for the company.
Hengli Group has set a benchmark for the industry in this regard. During the outbreak of the epidemic, Hengli Group deeply explored the path of “intelligent transformation to digital transformation”, accelerated the “replacement of machines with people” process, built intelligent factories, and continued to extend and broaden the industrial chain. With the blessing of “intelligence” and the advantages of the entire industry chain, Hengli Group has demonstrated good “immunity” in the face of the epidemic, solved labor problems, and accelerated the recovery of production capacity. At the same time, in the context of the downturn in the textile industry market, Hengli Group has innovative thinking, promoted the industrial structuretransformation and upgrading, given full play to the group’s technological and innovative advantages, improved product competitiveness, and Products should be made solid, strong and excellent. Produce high-end chemical fiber products and develop high-end fashion fabrics through unique technology to avoid low price competition.
In addition, in the past two years, Hengli Group has fully realized the importance of epidemic prevention and control, and on the basis of daily epidemic prevention and control,On this basis, a certain amount of experience has been accumulated. At the beginning of the COVID-19 outbreak, Hengli Group established a leading group for epidemic prevention and control, and the epidemic prevention and control working groups of each industrial park strengthened contact and communication to form a joint force for epidemic prevention and control. Nowadays, under the leadership of the epidemic prevention and control leading group, each industrial park has tightened the string of epidemic prevention and control, integrated normalized epidemic prevention and control into ideological understanding and action implementation, and ensured that all links and processes of epidemic prevention and control are strict and effective. advance in sequence. Faced with the outbreak of the epidemic from time to time, Hengli Group planned in advance, strengthened the internal training of volunteers and nucleic acid sampling personnel, and cooperated with medical staff to complete multiple rounds of nucleic acid testing. Hengli volunteers also actively participated in nucleic acid sampling service activities organized by various communities, streets, towns and other organizations to contribute to epidemic prevention and control.
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Strengthen confidence and embrace stronger development
Although the environmental situation at home and abroad is severe, Chen Xinwei pointed out that the “Guiding Opinions on the High-Quality Development of the Chemical Fiber Industry” clarified the new positioning and role of the chemical fiber industry, that is, the chemical fiber industry is the core support for the stable development and continuous innovation of the textile industry chain, and is the core support for the stable development and continuous innovation of the textile industry chain. The industry with international competitive advantages is also an important part of the new materials industry. This shows that chemical fiber plays a core supporting role in the textile industry chain and plays an important role in promoting the development of strategic emerging industries and even the national economy. The industry must have confidence in the future. It is believed that with the implementation of relevant national support policies, the operation of the chemical fiber industry is expected to gradually get out of the predicament.
The relevant person in charge of Hengli Group also believes that China’s textile industry has a long history and is currently the largest foreign exchange earner, with traditional advantages. Although Vietnam’s textile industry is mainly developing strongly in the garment industry, currently textile fabrics and textile raw materials mainly rely on imports. Although it will have a certain impact on share in 3-5 years, it will not It will cause too much structural change. In the face of repeated epidemics, it is recommended that companies adjust their annual plans according to actual market conditions; they should work hard to reduce inventory, sell as many products as possible, and grasp more funds. In the long run, in the post-epidemic era, companies first need to build confidence and choose flexible production, that is, selective mass production of advantageous products and products with market competitiveness. It is crucial to “work hard on internal skills” and continuously improve core competitiveness.
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