Recently, various regions have successively announced the overall development and operation of the textile industry since the first half of the year. The epidemic has generally had varying degrees of impact on the development of the industry. As a province with a major textile industry, how has Henan Province performed so far this year? Recently, in an interview, Yuan Jianlong, executive chairman of the Henan Textile Industry Association, summarized the characteristics of the textile industry in Henan Province in the first seven months of this year as follows: the overall growth rate is stable with a decrease, and domestic demand is stable. The fluctuations in the raw material market have slowed down, investment continues to shrink, and operational quality and efficiency have steadily improved.
The overall growth rate and efficiency have slowed down
Statistical data shows that from January to July this year, textile enterprises above designated size in Henan produced 1.5439 million tons of yarn, 726 million meters of cloth, and 364,000 tons of chemical fiber, a year-on-year decrease of 6.19% respectively. %, 4.85% and 19%; main business income was 172.9 billion yuan and profit was 7.93 billion yuan, a year-on-year decrease of 15% and 20.3% respectively; textile and clothing exports were 1.11 billion US dollars, a year-on-year increase of 9.5%. The increase in exports of anti-epidemic materials has boosted the growth of textile exports.
“Affected by the epidemic at the beginning of the year, corporate production fell into wait-and-see mode.” Yuan Jianlong said that in addition to the emergence of market demand for epidemic prevention material production companies In addition to explosive growth, market feedback from other related industries is pessimistic. Companies have suspended production and limited production, inventories have increased significantly, accounts receivable have increased, and risks have increased. After March, the production of raw materials and basic products began to resume, but some logistics were not smooth. In the second quarter, with the support of national macro-control and policies to promote production and protect people’s livelihood, industry production gradually improved. Since June, the overall situation has gradually returned to normal.
In terms of the cotton spinning industry, most enterprises in the cotton textile industry in Henan are currently operating normally, with the current capacity utilization rate above 70%, and the average yarn count produced by the enterprises is above 40 counts. . The production of fabrics is determined by sales, and differentiated products dominate. In the chemical fiber industry, it is difficult to expand the viscose and spandex fiber markets; the polyester market is stable and declining, viscose staple fiber fluctuates slightly, prices and sales are relatively stable, and corporate profits have declined. Since the beginning of this year, the international crude oil market has fluctuated violently, and the prices of downstream raw materials have also dropped significantly. Enterprises have encountered adverse conditions in production. The outbreak of the epidemic has brought about a surge in orders for nonwoven equipment in the textile machinery manufacturing industry. Pure cotton spinning enterprises have a strong desire to transform and upgrade. Cotton textile equipment has been upgraded and demand has increased.
Generally speaking, the shock of the epidemic has intensified the polarization of enterprises. Wugang Yinlong, Xuchang Yufeng, Pingmian Group, Jiaozuo Haihua, Luoyang Baima, Weishi Textile and other companies are producing according to orders and taking regular breaks. The production and operation of key enterprises in Nanyang, Kaifeng, Xinxiang and other cities are operating normally. Chemical fiber companies have both protection and pressure. Orders for equipment related to textile special equipment manufacturing anti-epidemic materials have experienced explosive growth, while market demand for other types of machinery and equipment has shrunk severely. Some small and medium-sized enterprises have reduced production and suspended production, and have encountered unprecedented difficulties.
Three major problems need to be solved
According to analysis by industry veterans, The current problems faced by Henan’s textile industry are mainly reflected in the following aspects:
First, raw material prices fluctuate and companies lack orders. Since the beginning of this year, affected by the uncertainty of the epidemic and Sino-US trade friction, the pressure on textile exports has increased, uncertainty has increased, and domestic consumption has exceeded demand. Enterprise inventories have increased sharply, and the downward pressure on the cotton market has been obvious. The market for pure cotton yarn continues to be weak, and the price of artificial cotton yarn still falls. Domestic small and medium-sized yarn mills, weaving mills, and garment factories are experiencing increasingly serious production cuts and suspensions. Price reductions to revitalize cash flow have become a top priority for some companies. The main problem right now is the lack of orders rather than the price. Cotton yarn futures have gradually become an important tool for sales and risk hedging for yarn mills.
Second, the cost pressure on production and operation has increased, and there has been a shift towards overseas investment growth. At this stage, the speed of yarn imports is slowing down, but there is a trend of substantial imports. Cotton prices in India and Pakistan have a strong price advantage compared with domestic cotton, and are highly competitive in the international market. At the same time, domestic water and electricity costs, labor costs, raw material costs, etc. are gradually rising, which is an important issue facing the textile industry. This is also an important reason why textile companies have declined in domestic investment enthusiasm and turned to overseas investment growth.
Third, financing costs remain high and industry profits are diluted. Since the credit cycle of banks and other financial institutions is to repay the principal without lending or to loan after repaying the principal, this has a huge impact on the operating pressure of enterprises. Excessive financing costs have eroded the profits of the industry and are not conducive to the expansion of reproduction and stable operations of the industry.
Active actions to release industrial vitality
Yuan Jianlong said that although the current epidemic situation It is still spreading around the world and has a huge impact on the world economy, our country’s economy, and the development of the textile industry. Enterprises are facing unprecedented difficulties. However, our country is at the forefront of the world in epidemic prevention and control and economic recovery. Economic development continues to improve. The country and the Henan Province has also introduced a series of policies and measures to protect and support enterprises. Under this situation, Henan textile entrepreneurs have a strong sense of responsibility, are not afraid of difficulties, use the strength of the entire industry to break through, and work hard to break through the waves and move forward.
In the next step, the Henan Textile Industry Association will play a leading role and provide various services in a solid manner.
First, through various forms, go deep into the grassroots level and proactively and timely understand the difficulties and needs that enterprises encounter in terms of raw materials, funds, employment, sales channels, etc. during the process of resuming work and production.To meet our needs, we should play a good role as a bridge between the industry and the government, provide good services, and actively help coordinate and solve difficulties.
The second is to strengthen the leadership of advantageous enterprises and lead the industry to break through the waves. Advantaged enterprises, which only account for 1.29% of Henan’s textile industry enterprises, have created 14.5% of the total profits of the province’s textile industry enterprises. We must give full play to the mainstay role of advantaged enterprises in the province’s textile economy and lead the employees of the enterprise to do everything possible to Overcome various difficulties and lead the province’s textile industry to move forward.
The third is project-driven development to add industrial vitality. In the first half of this year, Henan Caijin Textile Co., Ltd. located in Tanghe County started construction of 100,000 spindles of spinning and high-grade cotton and non-woven fabrics, as well as a textile trading market project with a total investment of 1.05 billion yuan. After the project is completed and put into operation, the annual output value will reach more than 500 million yuan. After the textile trading market is completed and put into operation, the annual transaction volume will reach 3 billion yuan and the annual tax revenue will exceed 30 million yuan. After the entire project is completed and put into operation, it will create more than 3,500 new jobs. In late July, the Henan Hengtong Lyocell project with a total investment of 4.6 billion yuan and an annual output of 200,000 tons started laying the foundation stone in Taikang County. The project is constructed in two phases. After the entire project is completed and reaches capacity, it will be able to achieve an annual main business income of 5 billion yuan, realize profits and taxes of 1.2 billion yuan, and create jobs for 2,000 people. In Xinxiang Economic Development Zone, the green printing and dyeing project, jointly developed and constructed by Zhejiang Keqiao Economic Development Zone and Xinxiang Economic Development Zone, with a total investment of nearly 3 billion yuan and an area of 1,500 acres, has started laying the foundation. The project has attracted the attention of more than a hundred companies. A number of major projects, including the Shaoxing Zhongcheng Chemical Fiber Weaving Project with an investment of 1.5 billion yuan and the Xingli Textile Dyeing and Finishing Project with an investment of 800 million yuan, have been signed. Xinxiang Bailu Investment Group Co., Ltd.’s annual output of 100,000 tons of spandex project will also start construction in the near future. The construction of these projects will accumulate stamina and add vitality to the high-quality development of Henan’s textile industry during the “14th Five-Year Plan”.
The fourth is to make full use of policies, fully seize development opportunities, practice internal skills, improve products, and make the enterprise stronger.
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