Since the national environmental protection campaign was launched in 2017, the transfer of the textile industry has become a rational choice for enterprises to achieve transformation and upgrading and seek breakthrough development. Under the pressure of environmental protection, a large number of looms have poured into the central and western regions with low costs and rich resources. However, as time goes by, how is the boss who expanded production like crazy in the past two years doing now?
Peripheral dividends have begun to fade, and the cost is actually not that low
In the past two years, bosses who have transferred looms have begun to appear A consensus: In fact, the cost of moving out is not much lower! The following are the views of some cloth bosses who have moved to northern Jiangsu, Anhui, Henan and other places on costs.
“The rent is cheaper, and other aspects are actually similar to the local ones, but including shipping costs, it’s not much cheaper.”——Moved to the Yancheng area of Jiangsu
“ The cost of setting up a factory is almost the same as that of setting up a factory locally. The rent is cheaper, the labor cost is more than 8,000, and the environmental protection is also very strict.” – Moved to Nantong area
“Compared with the local area, it is actually more expensive. In terms of labor, other rents, water and electricity are fine, and environmental protection is a little better than before due to the epidemic this year.”——Moved to Langxi, Anhui
“The rent is cheap, at 120 yuan/square meter , the labor force is similar to that of the local ones, or even more expensive, because we arranged local management workers to guide the production, and the water, electricity and tax bills are now basically unified across the country.”——Moved to Henan
From this point of view, Especially in terms of labor, some areas in the periphery have even surpassed the local ones. Although the rent is relatively cheaper, overall, the cost advantage is not obvious. The bosses who moved out were also because of strict local indicators, while the central and western regions basically There are no index requirements. Therefore, in the past two years, some larger enterprises have installed hundreds or thousands of machines, which has laid the groundwork for a blowout in gray fabric production capacity in the next few years.
Millions of meters of inventory have become the norm, and most companies in peripheral areas only operate half of their machines
“The situation this year is really not optimistic, and our export orders have decreased. The demand has dropped a lot, and the machine is running while weaving inventory. We already have 5-6 million meters of inventory. In addition, the raw materials have increased recently, but the cloth price has not increased. It is equivalent to using high-priced raw materials to produce low-priced gray cloth. Calculated In fact, it is a loss. In this case, we chose to stop half of the 300 looms in Langxi, Anhui and only operate 50%. The operating rates of surrounding manufacturers are basically around 50%, and the better ones are 7-7 80%.” said a cloth boss who moved to Langxi, Anhui.
Coincidentally, a cloth boss who transferred looms to Henan also revealed: “We have a lot of inventory, 7 to 8 million meters. Now the looms in other places are only 50% open, and the gray cloth is basically sold at a loss. There are also some gray fabrics produced with high-priced raw materials that are not sold. If you sell them, you will lose 0.3-0.4 yuan/meter.”
In addition to Anhui and Henan, northern Jiangsu, Hubei, Jiangxi and other regions also undertake most of the weaving. Most of the looms transferred to other places are water-jet looms, which weave the lowest-end fabrics, such as polyester taffeta, pongee, nylon, etc. The production capacity of a single loom for this type of gray fabric can reach more than 200 meters a day, and according to incomplete statistics, the total number of newly added looms in northern Jiangxi, Jiangxi, Anhui, Hubei and other places has exceeded 200,000! One can imagine how much gray fabric production capacity there is in other places.
Since the first half of 2019, gray fabrics such as polyester taffeta and pongee have been in a state of overcapacity. By April this year, although it was reported that polyester taffeta and pongee could replace non-woven For cloth used in protective clothing, the demand for polyester taffeta and pongee has rebounded, but it cannot absorb so much inventory. Therefore, gray fabrics from other places are still in a serious imbalance between supply and demand.
Low-price and large-volume foreign gray fabrics have impacted the local market
“The price of gray fabrics from peripheral looms is lower. For example, in northern Jiangsu, their 210T polyester taffeta can be made for less than 1 yuan, while our own production according to the current raw material price is 1.2-1.3 yuan/meter. About. But the quality of these gray fabrics is not as good as local ones. They generally produce low-end products such as polyester taffeta and pongee. In the end, a large part of these gray fabrics also flow into the local market, which has a great impact on the local market!” It has more than 300 units Mr. Cui from Loom said.
A large amount of peripheral gray fabrics flow into the local market. Although the quality is not as good as the local ones, these gray fabrics are market goods. Customers do not have high quality requirements. Coupled with the temptation of low prices, if there are no major problems with the fabrics, they will definitely be sold. Priority is given to low-price products. Affected by this, many local companies are forced to join price wars and fall deeply into the abyss of losses. The more they produce, the more they lose. However, when the machines stop, rent, machine depreciation, and basic living expenses for workers are all lost. It’s about expenditure. Boss Bu faces a dilemma.
Under the hot and cold environment, there will be a second production cut and holiday measures
Now the raw materials are different from those at the beginning of the month.The market price has increased to a certain extent, but cloth prices have remained unchanged. In addition, foreign trade has not recovered significantly, and domestic trade has gradually entered the off-season, resulting in a lack of orders. Even the previously popular polyester taffeta, pongee, conductive fabrics, etc. Epidemic prevention orders are beginning to come to an end. Faced with this situation, cloth bosses in peripheral areas said that after comprehensive consideration, production may be reduced again or even stopped altogether!
“If the raw materials fall, we will buy some and continue production. If they do not fall, we may take a holiday at the end of the month.” said the above-mentioned cloth boss with an operating rate of 50%. “In this situation, we can only sell gray fabrics at low prices to raise funds, but we are not willing to keep losing money. Next, we may have to reduce the number of machines, from more than 300 to more than 100.” said Mr. Wang, who moved to Henan.
Judging from the current situation, only by working hard to survive this period will it be possible to receive orders after the epidemic.
