From February 6th to February 7th, 2020, the land, real estate, machinery and equipment of Hangzhou Xiangsheng Textile Co., Ltd. were publicly auctioned on the Alibaba Bankruptcy and Liquidation Platform, as of the morning of the 7th When the auction ended at 10 o’clock, only one person signed up to participate, and the final transaction price was 533 million yuan.
Hangzhou Xiangsheng Textile was established in 1997. It is an old-line polyester chemical fiber filament manufacturer with an annual production capacity of up to 200,000 tons. Due to poor management, the Xiaoshan Court issued bankruptcy notices on four companies, namely Hangzhou Xiaoshan District Xiangsheng Textile Co., Ltd., Hangzhou Xiangsheng Thermal Power Co., Ltd., Hangzhou Xiangsheng Import and Export Co., Ltd., and Zhejiang Xiangsheng Group Co., Ltd. on November 22, 2018. .
The bankruptcy auction of chemical fiber companies is not an isolated case
The old bankruptcy auction of Xiangsheng Chemical Fiber is embarrassing, but what makes people feel even more helpless is that This is not an isolated case. In recent years, it is not uncommon for chemical fiber giants to go bankrupt.
On November 15, 2015, Jiangsu Minghui Chemical Fiber Technology Co., Ltd. issued an announcement to undergo bankruptcy reorganization and terminated the labor contracts of all employees of the company;
In January 2018, Hangzhou Longda Differential Polyester Co., Ltd., a polyester factory in Xiaoshan, completed an auction with a transaction price of 372 million yuan. It was once one of the leaders in Xiaoshan’s polyester industry, with an annual output value of more than 5 billion yuan;
On November 7, 2018, the Xiaoshan District People’s Court of Hangzhou issued an announcement ruling that Hangzhou Zhebang Chemical Fiber Trading Co., Ltd. went bankrupt;
On November 5, 2019, Huaxin Chemical Fiber, once one of the top 100 companies in Ningbo and China’s leading chemical fiber company, could not escape the fate of bankruptcy auction. , the final auction price was 826 million yuan
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This series of once-familiar names appeared on the list of bankruptcy and liquidation , which is extremely emotional at the same time. But at the same time, everyone can’t help but wonder, why is this?
Chemical fiber companies frequently go bankrupt and liquidated. What are the reasons?
Industry polarization
In recent years, Shenghong and Hengli Chemical fiber giants such as Xinfengming and other traditional polyester filament production companies have also established their own PTA production equipment. These chemical fiber giants are working hard to open up the entire polyester industry chain. to reduce costs and control risks.
In contrast, there are some small and medium-sized chemical fiber companies. Affected by their own capital scale, their original old equipment is difficult to replace, and the cost and quality of the filaments they produce are low. There are certain disadvantages between us and big manufacturers.
The situation is becoming more and more polarized. At present, the top six polyester filament companies in the industry, Tongkun, Xinfengming, Shenghong, Hengyi, Hengli, and Rongsheng, account for more than half of the total production capacity. The industry concentration is increasing at a steady rate every year.
Insufficient prosperity
2018 In the middle of the year, PTA, the raw material for chemical fiber filament, began to rise sharply, with the spot price even exceeding 10,000 yuan at its peak. Although the price of polyester yarn also rose, its increase rate still could not catch up with the “crazy PTA”, and the polyester factory even fell into a The strange situation of “increasing prices while losing money”.
In 2019, due to the poor overall environment of the weaving market, the price of polyester raw materials fell again and again, and polyester inventory also exceeded the record of previous years.
Under such circumstances, leading companies can weather the difficulties better because of their more advanced technologies and abundant funds, while some small and medium-sized chemical fiber companies that are already struggling to operate It will need to face more severe tests.
Debt operation
Debt operation It is a double-edged sword. If used properly, it can enable enterprises to quickly raise the funds they need, reduce operating costs, reduce tax expenditures, obtain financial leverage benefits, etc.; if used improperly, it will bring disaster to the enterprise.
And in many cases, some small-scale chemical fiber companies are bound to encounter many situations of insufficient funds during the production and operation process. At this time, debt is also a helpless choice. . However, if the company chooses unreasonable amounts, limits, channels and methods of liabilities, and improperly uses debt funds, it will also have many negative impacts on the company.
Mistakes in decision-making
Due to debt Seriously, some chemical fiber companies are burdened with a big burden in their production and operations. This will test the decision-making ability of managers.
Should old equipment be phased out? Do you want to buy new equipment? Products produced with old equipment are not profitable, and buying new equipment requires a lot of money.�� funds. For some chemical fiber companies whose capital chains are already tight, it is no exaggeration to describe their mood when making major decisions as “walking on thin ice.”
The epidemic may accelerate industry reshuffle
Recently, affected by the ongoing novel coronavirus epidemic, several important textile clusters across the country have pushed back their start dates: Shengze postponed to after 24:00 on February 20, and Keqiao postponed to February 17 Later, Guangzhou Zhongda, the country’s largest textile fabric gray cloth trading market, issued a notice on the 5th to “delay the start of operations indefinitely.”
The delayed start of operations in various textile clusters is a considerable loss for weaving companies, but for the polyester industry, the challenges may be greater.
The following table shows the equipment start-up and maintenance status of dozens of polyester factories as of February 6.
The above data can be seen that the polyester production capacity involved in load reduction or shutdown in the near future has exceeded 20 million tons, this kind of suspension of production is absolutely unprecedented, but even with such a large suspension of production, it still seems to be a drop in the bucket in the face of the environment where weaving companies don’t know when they can start operations.
In 2019, the polyester industry has been plagued by high inventory. The average inventory of polyester factories reached a maximum of 24 days. Coupled with the unfavorable destocking market last year, As of the Spring Festival holiday, the inventory of polyester factories is still at a high level.
At present, except for some companies that produce protective equipment, most weaving companies are still in the A state of shutdown, which means no consumption of raw materials. Therefore, during this period, the polyester factory can be said to “increase inventory as much as it produces.” It is really unimaginable that when the weaving company finally starts operations, the polyester factory will What kind of “astronomical figure” will the inventory of the ester factory be.
At that time, under the pressure of inventory, the price of chemical fiber filament is bound to drop again and again. Those leading companies have sufficient funds and the confidence to withstand such an impact, but what should those small and medium-sized chemical fiber companies that already have tight capital chains do? Once the funds are broken, it will inevitably follow the old path of bankruptcy and liquidation of the “predecessors”.
Therefore, the editor judges that the epidemic will accelerate the reshuffle of the polyester industry. After the epidemic, the concentration of the industry will be greatly improved in a short period of time. .
Editor’s note: In recent years, the two trends in the chemical fiber industry The situation of class differentiation is becoming more and more serious. On the one hand, leading chemical fiber companies have opened up the entire industrial chain; on the other hand, one after another old chemical fiber companies have embarked on the path of “bankruptcy and liquidation”, which is lamentable.
With the recent outbreak of the epidemic, the start-up time of major textile clusters has been pushed back again and again, and the inventory pressure of polyester companies has become increasingly greater. For some small and medium-sized chemical fiber companies that are already struggling to operate, this situation is just adding insult to injury.
But on the other hand, this is just like the new coronavirus epidemic itself. Although it is difficult, it is something that we have to face. And the best way to deal with it is to face it head-on and then defeat it!
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