Tomorrow is the beginning of summer. Judging from the temperatures in the past few days, it feels like we are entering midsummer. But for the textile industry, May may not usher in midsummer, but cold winter!
It is reported that many textile companies in Jiangsu and Zhejiang have been declared bankrupt and liquidated by the court, and there are also many textile companies that have gone bankrupt and auctioned on Ali Auction.
It has just entered May, and so many textile companies cannot survive. Go down and exit the battlefield early. This has to give people a chill. What is the reason for the collapse of these companies?
Funds are particularly important during the epidemic!
The biggest reason for the collapse of these companies is the break in the capital chain, especially under this year’s epidemic, Funds are particularly important!
For today’s textile companies, although there are signs of recovery in foreign trade, there are very few actual orders received, except for protective clothing fabrics, but this wave of popularity is not expected to last long. Nowadays, textile companies can basically only rely on one leg (domestic trade). Under such circumstances, many companies can only rely on cutting production and taking holidays to save money.
In addition, due to the scarcity of orders and the decline in raw materials, although there was a wave of increases before the holiday, the effect was minimal. As a result, gray fabrics are becoming less and less valuable, and customers frequently lower prices. “Now the factory has been weaving inventory, and only makes some loose orders in trade. The profit cannot sustain normal expenses. The profit of a loom every day is only maintained at It’s about 10 yuan,” said a manufacturer of polyester taffeta.
In the first quarter of this year, many manufacturers had no orders due to both domestic and foreign trade being blocked. It can be done, but we can only weave inventory. At present, the inventory of most weaving manufacturers has reached a high level of about 2 months! Furthermore, if the inventory cannot be cleared, funds cannot be mobilized, and there is no money to buy raw materials, pay wages, etc. Under this situation, many manufacturers will choose to sell goods to withdraw funds, but the more they sell goods, the more chaotic the market price will be, and other manufacturers will have to join the “price war” to grab the shrinking cake.
Do not blindly hoard goods, as the gain outweighs the loss.
Nowadays, protective clothing fabrics such as polyester taffeta and pongee are relatively hot, and the prices are also rising. Today, 190T polyester taffeta has increased by about 3 cents compared with two weeks ago. Many people have spotted this trend and want to stock up on goods to earn the price difference. This approach has certain feasibility. After all, everyone wants a piece of the pie when they see money being made. And for now, there are still many foreign The customer is placing an order in this regard.
But at the same time, we must also see the crisis behind the prosperity. First of all, stocking up requires a lot of liquidity. It is understood that most of the purchases of these fabrics are now cash transactions. If you can sell it later, you can still make a profit, but if this part of the goods cannot be sold later, the funds on hand will be tied up, and the gain will outweigh the loss. Nowadays, the decision whether to stock up or not is still in the hands of textile workers. The editor can only say that they must be rational. After all, for this year’s market, it is most reliable to hold cash firmly in your hands.
It is difficult to collect receivables, and we must be careful to prevent customers from going bankrupt and running away
Every time at the end of the month, I will always see one or two Moments that have made timely payments. For this year’s market situation, it is probably not easy to understand the accounts. At present, many domestic trade and foreign trade customers have accounts between 3 and 3. More than three months, in addition to this, we must also be careful to prevent customers from going bankrupt and running away.
Although everyone knows that it is not easy to pay accounts, it is already a common practice in the textile industry to collect goods on account of debts. Especially this year, everyone does not have sufficient funds on hand. If they are required to pay in cash, I am afraid that many If no one can take it out, then the business will be ruined. “Now we can only let them owe money. We all paid in cash last year, but this year there is too much inventory. We can only ask them to pay a deposit first, at least to transfer the inventory.” Lower it a little first.” said a manager of a factory that produces imitation silk.
Postscript
For textile companies, 2020 is not a year of development, but a year of survival. I believe this has become The consensus of most cloth bosses is that in the face of weak domestic and foreign trade, it is even more important to be down-to-earth, manage scientifically, and ensure sufficient funds on hand, so that we can survive until the end!
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