Textile And Shoemaking Enterprises Suffer In The Throes Of Pformation

The textile industry is experiencing the throes of development and pformation.

According to the survey data of China Textile Industry Association in March, the profit margin of 2/3 in textile industry is only 0.62%, and most small and medium-sized enterprises are at the edge of life and death.

"In a town near us, more than a dozen enterprises mainly producing OEM have gone bankrupt."

Zhang Haijun, Secretary of Honghe Town Committee of Xiuzhou District, Jiaxing, Zhejiang, said.

At the end of March, Zhang Haijun led more than a dozen enterprises in Honghe to Beijing to attend the sixteenth China International Clothing and accessories fair. He said that more than ten enterprises mainly produced sweaters, and their output accounted for 70% of the total output value of Honghe town. However, from the second half of last year, the value of renminbi rose faster and faster, and the enterprises assumed greater exchange rate risk.

Compared with the small businesses that have failed, some of the larger enterprises are gradually squeezed by the adverse factors.

According to the statistics of National Bureau of statistics, from 1 to February this year, the added value of Industrial Enterprises above Designated Size (annual revenues of more than 5 million yuan) increased by 15.4% over the same period, of which the textile industry increased by 11.6%.

The added value of textile industrial enterprises has dropped significantly.

The 2007 performance report released by Fujian Nanfang showed that its net profit attributable to its parent company last year was -953.39 million, down 212.77% from 2006.

The performance of Black Peony (Group) Limited by Share Ltd, which is mainly produced and sold on denim, also showed that its sales revenue reached 983 million 770 thousand yuan last year, an increase of 1.41% over the same period last year. The total profit was 92 million 252 thousand and 900 yuan, down 35.86% from the same period last year. Net profit was 84 million 500 thousand yuan, down 16.13% from the same period last year. The profit of the Black Peony (Limited by Share Ltd) group was 1.41%.

Zhang Rongming, chairman of Beijing Ermu Underwear Co., Ltd. believes that the development of industry by labor advantage has come to an end.

Although the industry is currently suffering a great impact, the value of its own brand value can absorb the current increasing cost.

A number of small enterprises with backward technology and extensive production and low profit processing trade enterprises relying on low labor costs and favorable tax concessions have been closed down in the current unprofitable environment.

According to Li Peng, the Secretary General of the footwear association of Asia, there are five thousand or six thousand shoe factories in Guangdong, and over 1000 in the past year, mostly small and medium-sized.

"Now the polarization of textile enterprises is very serious.

In 2007, enterprises experienced many adjustments, and different enterprises had different bearing capacity.

Enterprises with high added value, brand names and longer industrial chains are more resilience in the face of adjustment, but some SMEs are likely to be squeezed out by the superposition effect of these policies.

Sun Huaibin, director of China Textile Economic Research Center, said.

Under such circumstances, upgrading the brand's added value has become the inevitable choice for many enterprises to pform.

Zhou Sheng, general manager of Shenzhen Ye Garment Industrial Co., Ltd., although last year, due to various factors, the company's production cost increased by 10% to 20%, but he was confident that under such circumstances, it would reduce management costs, control process, improve efficiency and ensure profits.