The weather has clearly entered summer, but the fabric industry is still “bitterly cold”.
On May 11, Shandong Wulian People’s Court issued an announcement announcing that Shandong Hualong Textile Co., Ltd. was bankrupt. It is sad that a generation of leading textile companies have fallen to such a stage.
Coincidentally, recently, many textile companies have been declared bankrupt and liquidated by the court. On Ali Auction Network, there are many textile companies conducting bankruptcy auctions. What is even more surprising is that some well-known companies have also fallen into bankruptcy. Facing such a “cold winter”, how to survive has obviously become a big test that enterprises need to face together.
The leading company has closed down
The market situation is grim
The official website of Shandong Hualong Textile Co., Ltd. shows that the company has 5,000 employees and is a company integrating spinning, weaving, clothing processing, home textiles, A large-scale textile enterprise integrating real estate and textile import and export trade, it mainly produces pure cotton and chemical fiber blended yarn, air-jet worsted knitting yarn, cloth products, as well as clothing and home textile products, with more than a dozen series and more than 200 varieties. The company produces 60 million meters of cloth and 23,000 tons of yarn annually. It has won many honorary titles such as “China’s Top 500 Competitive Textile and Garment Enterprises” and “National Advanced Group in Textile Industry”. Its “Longfang” brand polyester-viscose fabric has been rated as “Shandong famous brand” products. While the company’s products are sold throughout the country, they are also exported to more than 30 countries and regions such as Europe, the United States, South Korea, Japan, and the Middle East.
No matter what the reasons were for the company’s poor performance in the early stage, the epidemic that occurred this year may have become the decisive factor that crushed it. The last “straw”.
On the People’s Court announcement website, reporters found that only 5 From May 17th to May 19th, seven textile and apparel companies, including Binzhou Jinli Textile Co., Ltd., Shengzhou Tianlang Clothing Co., Ltd., and Wuhan Yuemian Textile Factory, issued bankruptcy announcements.
“Due to the superposition of the epidemic and the off-season, many textile and fabric companies have failed in this ‘cold winter’ recently. These companies The biggest reason for bankruptcy is the break in the capital chain. Especially under this year’s epidemic, capital is particularly important.” An industry insider analyzed to a reporter from China Textile News, “For current textile companies, although there are some problems in foreign trade, There are signs of recovery, but except for protective clothing fabrics, very few can receive actual orders. Now, textile companies can basically only rely on domestic trade. In this case, many companies can only rely on cutting production. , take holidays to save money, and it is reasonable for companies that were not doing well in the early stage to close down.”
According to industry insiders, in the first quarter of this year, many fabric companies have no orders to make due to both domestic and foreign trade being blocked. The inventory of some weaving manufacturers has reached a high of about 2 months. “If the inventory cannot be cleared, funds cannot be used, 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 this will also lead to confusion in market prices, and other manufacturers will They also have to join the ‘price war’ to grab the shrinking ‘cake’.”
Overview of the textile market in Jiangsu and Zhejiang regions Compared with previous years, the market situation in the first three months of this year is indeed not satisfactory. According to data from sample companies monitored by relevant websites, currently, the gray fabric inventory of companies in Shengze, Jiangsu is around 42 days old. Although it has declined from the previous period, it is still at a high level compared with the same period last year, and the company’s destocking process is slow. In terms of operating rate, according to statistics, the operating rate of looms in Jiangsu and Zhejiang has recently been around 70%. Moreover, the textile market is about to enter the traditional off-season, and the operating rate is more likely to decline further.
The International Textile Manufacturers Federation (ITMF) will target its members and affiliated companies from April 16 to 28, 2020 and the association conducted the third survey. The survey results show that global textile orders have declined by an average of 41%. Compared with 2019, the turnover of the global textile market is expected to decline by an average of 33% in 2020.
Polarization
Protective fabrics sell well
Since the outbreak, the end-use clothing market demand has shrunk severely, resulting in a worrying prospect for conventional fabric products. The fabric market production and sales are temporarily difficult to maintain, and inventories are high. . However, in sharp contrast to the slow sales of conventional varieties, the market for masks and protective clothing is still booming recently.
On May 11, data released by China Textile City showed that due to the impact of overseas epidemics, starting from late April , polyester protective clothing is gradually heating up. Since most textile companies use common products such as polyester taffeta and pongee and other “bulk goods” and pp and pe coatings to produce medical protective clothing products, the performance of polyester taffeta and pongee in the recent fabric market is particularly eye-catching. In the list of best-selling fabrics in China Textile City, pongee ranked second, and polyester taffeta also ranked in the top ten.
At the same time, affected by the popularity of masks, the price of nylon has also risen sharply recently. The price of nylon POY has increased by about 800 yuan/ton from the end of April, the price of nylon DTY has increased by about 900 yuan/ton from the end of April, and the price of nylon FDY has increased by about 900 yuan/ton from the end of April.
“Recently, the sales of protective clothing fabrics such as polyester taffeta and polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester polyester and polyester polyester polyester polyester polyester polyester polyester polyester polyester and polyester polyester polyester polyester polyester polyamide nitrate ionyl chloride, and the prices are also rising. . On May 10, 190T polyester taffeta has increased by about 0.3 yuan/meter compared with two weeks ago.” According to an industry expert, “Now many companies have spotted this momentum and want to stock up and make money. Take the price difference. This approach has certain feasibility. After all, everyone wants to get a piece of the pie when they see the money being made, and for now, there are still many foreign customers placing orders in this area.”
However, this industry expert also reminded companies that they must see the crisis behind the prosperity. “Hoarding goods requires a large amount of working capital. Most of the companies’ current purchases of these fabrics are cash transactions. If this part of the goods can be sold later, it will be profitable; but if it cannot be sold later, the funds on hand of the company will be You will be stuck, and you will lose more than you gain.”
From B to C
Manufacturing companies come to the forefront
In today’s environment, if fabric companies blindly rely on steady and steady operations, The method remains the same, and if you want to spend this “cold winter period” easily, it will obviously not be so smooth. If they want to survive adversity, companies need to think outside the box.
Reporters from “China Textile News” found that many fabric companies are now working hard to achieve the transformation from the B-end to the C-end: Through its own technical advantages in materials, it breaks through the supplier status, extends new brands, broadens product service lines, and creates brand IP.
“The main impact of the epidemic on us comes from the cancellation of some customer orders. In addition, since the fabric industry is B2B, Many offline marketing activities, exhibitions, and regular visits to customers for foreign trade business cannot be carried out as scheduled, and promotional activities have also been affected.” Zhong Zhangwei, marketing director of Guangdong Beijiang Textile Co., Ltd. said that the company has increased its efforts in Douyin, Kuaishou, The frequency of interaction between channels such as Bilibili and consumers, and the content will focus on the technical features of the product. For example, for denim, the characteristics of the fabric used will be reflected in the communication content, what is the principle of a fabric with antibacterial function, and where is the antibacterial effect reflected.
“Since last year, we have made a B2C expansion attempt in the form of incubating independent sub-brands and opened PRTH, a Tmall store that specializes in national fashion denim, hopes to better promote my country’s good denim, good fabrics and good designs. From January to March this year, the number of page visitors and pageviews of our Tmall store increased compared with It rose significantly in the first quarter, with sales increasing by 160%.” Zhong Zhangwei said that in recent years, many online brands have developed quite rapidly, and Beijiang has also been trying. It has become an obvious trend for fabric manufacturers to “focus on online brands”.
Sun Lei, planning director of Zhejiang Wanzi Technology Co., Ltd., introduced that Wanzi’s product R&D personnel are working hard to meet the basic organization of fabrics. In addition to core demands such as color, feel, etc., consumers are beginning to pay more attention to daily functions, including antibacterial, anti-wrinkle, anti-mosquito, anti-UV, moisturizing and beautifying needs, etc.
“From 2B to 2C, we have learned to think about products from the perspective of consumers. In the past, consumers had little regard for brands. The recognition of clothing only stays on the brand, and the fabric suppliers behind it have not received attention. However, we obviously understand the characteristics of the fabric better than the brand, and have more opportunities to gain insights into how to communicate with C-end users.” Sun Lei said, Wan Zi has started trying garment orders (ODM or OEM) this year. While testing its own garment supply chain management level, it can also verify market demand and prepare for future brand building. </p
