The entire textile industry is currently in a state of “nothing to do”, and all textile people are more concerned about changes in overseas situations than ever before. After all, it is difficult for clothing consumption to pick up before the epidemic is brought under control, and foreign trade orders will not be substantially issued. Of course, how to avoid risks and survive this “order drying period” is also what textile people are more concerned about. When it is impossible to obtain more orders through “open source”, perhaps cutting expenses and lowering costs is the only option.
However, there are many textile companies in the market that have not appropriately reduced their startups and operating costs due to the reduction in orders.
“Thisyearourordershavebeenreducedbynearly70%,andtheinventoryofgrayfabricsexceeds5.5millionmeters,whichisbasicallyequivalentto68daysofproduction,butthestart-upratehasnotbeenreducedyet.Theplanisstillfullyoperational.”
“Our recent order volume has been reduced by at least 50% compared to before. The inventory in the warehouse is hundreds of thousands of meters for each variety. I heard that some small factories in the surrounding area have started to Production is reduced, but our factory is still operating at 100%.”
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This state of full operation seems to be somewhat inconsistent with the fact that there is an extreme lack of orders in the market. We must know that the downstream printing and dyeing enterprises of weaving have been suspended or semi-suspended. “Just make it as soon as the order comes” has become the current situation of most dyeing factories. Some dyeing factory salesmen have even begun to attract customer orders with various price concessions. Under normal circumstances, it is “difficult to accept” that dyeing factories actively offer price concessions. “God” thing.
The suspension of production can save costs, and the production is also
Under normal circumstances, the textile industry When companies cut back on expenditures and costs, the first thing they think of is reducing production, suspending production, lowering the operating rate, or even cutting the number of workers and reducing worker benefits. But in a weaving business, these seemingly money-saving methods may not be so money-saving.
First of all, the rent of factory buildings for weaving enterprises will not be reduced or reduced depending on whether they are producing or not. In addition, general enterprises will have certain raw materials in stock. Rather than keeping these inventories in the form of raw materials, it is better to turn them into fabrics. It can be shipped as soon as possible when customers need it.
And employees in the factory do not have no salary expenses at all when production is suspended. In order to retain employees, most manufacturers will provide employees with a certain amount of living expenses. Although normal production requires more wage expenditures, workers are also generating value. However, if living expenses are provided during holidays, the manufacturer’s contribution and return will be completely disproportionate. In addition, many old employees are likely to resign due to low holiday income. No matter when the time comes, skilled old employees are a rare asset to the weaving factory.
In other words, if production is stopped, manufacturers will still have to spend a lot of money, and the returns will be small. In the case of production, although the expenditure is higher, the returns are also equal. Therefore, many weaving companies will not take the road of suspending production and taking holidays unless they have to.
The overstock of gray fabrics is not conducive to market recovery
However, despite the extreme lack of market orders, weaving companies still do not reduce production and accumulate inventory significantly. The situation is not conducive to market recovery.
The first is that a large amount of working capital will inevitably be backed up by piles of inventory. Without working capital, weaving companies will lose their vitality to some extent, and more attention will only be focused on digesting inventory and releasing funds. However, they lack the ability to respond to new demands and new fashions that may appear in the market after the epidemic, making it difficult to devote energy to innovation and grasp fashion trends. As a result, it is inevitable that various fabrics will be homogenized and low-price competition will prevail.
In addition, the inventory of gray fabrics accumulated for a long time will cause problems in itself, even if it is woven with the best raw materials and machines. In particular, the end time of the pneumonia epidemic is uncertain, and the longer the time passes, the higher the probability of problems with gray fabrics. According to the person in charge of a weaving factory, their factory still has gray cloth from many years ago. This batch of cloth has been accumulated for too long and has various large and small mold spots and mildew spots. Under normal circumstances, this kind of fabric is not suitable for dyeing light colors, and can only be dyed dark blue, black and other dark colors. To some extent, it hinders the consumption of inventory and may also cause the loss of customer orders.
In today’s textile market, production suspension and production reduction are already high probability events. Although the vast majority of weaving companies are still holding on, from the overall situation, this state is not How long will it last? They will also join the ranks of suspending work and reducing production. It’s just that compared to other textile industry links, weaving companies may be under greater pressure after the overseas epidemic is over. After all, there is a backlog of gray fabrics, a lack of funds, and there is a high probability of facing inventory that is out of condition.
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