The textile market has undergone sudden changes in the past two years. As the weaving production capacity in the market continues to expand, consumption power has begun to enter a bottleneck: in 2019, the textile market suffered a major blow due to overcapacity; in 2020, a century-old disaster The new coronavirus epidemic has made textile companies even worse.
The current textile industry as a whole shows two major trends:
On the one hand, as production capacity continues to expand, conventional products are in excess, and the epidemic in 2020 has exacerbated the overcapacity situation;
On the other hand, as people live With the improvement of production level, the demand for mid-to-high-end textiles is growing rapidly.
After the two phases were superimposed, a serious polarization situation emerged.
If textile companies want to break through obstacles and break the cycle of vicious competition and low profits, transformation and upgrading is a process that they must go through. The concept of transformation and upgrading has been around for a long time:
From a macro perspective, from the past supply-side reform, to the later “Internet +”, to the current Industry 4.0 and “Made in China 2025”, the state promotes Made in China A grand strategy for industrial transformation and upgrading.
From a micro perspective, textile companies replacing new looms, installing ERP systems, changing management models, or even developing a new fabric can be regarded as transformation and upgrading in a certain sense.
The market situation is forcing it, and textile companies are struggling to upgrade
In the past few years, textile Foreign trade is growing rapidly every year, and the demand for China’s high-quality and low-cost textiles exceeds supply in the market. Textile companies are now able to “make money even while lying down.” At that time, the more produced, the higher the profits, so textile companies often used funds to expand their scale, but this situation has changed in the past two years.
In 2018, expansion of production was still the first choice for weaving companies after they had money. Due to the policy reform of water-jet looms, the number of looms in Jiangsu and Zhejiang was greatly restricted. At the same time, due to the fabric market that year It’s relatively good. Weaving companies generally have good cash flow. On the one hand, the market demand was not met, and on the other hand, weaving companies had money. At that time, most cloth bosses still wanted to expand production capacity, and there was a vigorous transfer of water-jet looms.
At that time, some cloth bosses complained that the profit from making T400 and four-way elastic was almost the same as that from making pongee and polyester taffeta, but the costs of the two sides were not the same at all.
But the overcapacity in 2019 and the new crown epidemic in 2020 have completely changed the market. In addition, in the process of large-scale transfer of textile production capacity to the central and western regions, weaving production capacity is becoming more and more centralized. Some powerful leading companies have invested thousands of water-jet looms in a single factory, which is affected by the scale effect. , they have greater advantages than traditional textile companies in terms of raw material purchasing and production efficiency. There is a stronger competitive advantage on conventional products with price as the main anchor. In the increasingly fierce competition, textile people have gradually realized that cloth can no longer be sold as it was produced before, and the concept of transformation and upgrading has begun to take root in people’s hearts.
It’s not possible without money, nor is it possible just to have money
However, many textile people have discovered that the road to transformation and upgrading is not easy. Sometimes it is better not to rotate than to rotate. This is related to the way of thinking of some textile people.
First I entered a company to run orders, then accumulated some contacts and then went out to work alone. I made money to buy looms and transformed into an integrated industry and trade enterprise. Finally, I bought more looms and the factory opened bigger and bigger. This is the current stage. The fortune-making process of some weaving companies, so it can be said that a considerable number of heads of weaving companies in the market started their business in trade.
Although trading and opening a factory are both in the cloth business, their focus is different. If you open a factory with the idea of trading, problems will easily arise. Such problems may not have appeared in the past when everything was profitable, but when the market fluctuated and companies began to compete for core competitiveness, various problems emerged.
Therefore, cloth bosses must not only have the concept of transformation and upgrading, but also have a clear understanding of why and how to transform. For Chinese textile companies, labor is becoming more and more expensive, and human resources are no longer an advantage. Compared with Southeast Asian countries, the biggest advantage of China’s textile industry is the soundness of the industrial chain. Under the national strategy of “Made in China 2025” and “Dual Cycle at Home and Abroad”, the technological upgrading of textile enterprises will only become faster and faster.
In the past years when the market was good, the overall profit situation of textile enterprises was still good. Therefore, traditional textile enterprises generally have good capital accumulation. In other words, the biggest advantage is “money” . After all, whether it is to replace equipment or equip the system, a large amount of funds is required, and it is absolutely impossible not to have enough money. But just having money without thinking about improving technology makes it difficult to put money to practical use.On the other hand, in the increasingly fierce competition in the textile industry in the future, there will also be disadvantages.
Under the pressure of structural overcapacity and the new crown epidemic, for traditional textile companies, the era of “no need to worry about selling cloth” has passed , transformation and upgrading is already a “must take” path. Higher sales volume, lower costs, and higher product added value are essential qualities for enterprises in the future competition in the textile industry. But in transformation and upgrading, in addition to massive capital investment, it is also important to change some of the past thinking patterns. </p
