Jiangsu Chemical Fiber Minghui Declares Bankruptcy, Which Three Predicaments Lead To Bankruptcy?

The "three big mountains" were finally crushed by Ming Hui, who warned of the collapse of the polyester polyester market. Jiangsu Taicang Ming Hui officially declared bankruptcy.

However, insiders pointed out that the collapse of enterprises like Ming Hui is a normal manifestation of the industry reshuffle, and we should treat it correctly.

The overall trough will eventually pass away, just the question of the length of time.

Jiangsu's Minghui chemical fiber, which was once ambitious at the time of its founding, did not survive the current polyester polyester market continuously adjusted.

In November 15th,

Taicang province Minghui chemical fiber technology shares posted a notice, causing an uproar in the industry.

According to the announcement, the company will carry out the operation because the capital chain is broken.

Reorganize and make decision on termination of labor contract for all employees.

So far, the rumor of Ming Hui's bankruptcy has been conclusive.

Ming Hui's production equipment configuration was once more advanced. Why did it finally go to bankruptcy? During this period, interviews were made with a number of people in Jiangsu polyester polyester industry, trying to comb out some dilemmas faced by Minghui chemical fiber in recent years, and hope to give some warning to other polyester enterprises.

The fragmentation of capital chain leads to bankruptcy.

Minghui chemical fiber is located in Shaxi new material industrial park, Taicang City, Jiangsu province. It is jointly invested by Taicang 10 furniture company with certain strength.

Ming Hui's annual capacity is about 250 thousand tons, mainly POY.

According to Ming Hui's initial investment plan, the DTY project will also be constructed, but the plan will eventually be shelved.

The Ming Hui POY project was introduced in 2010 and put into operation in May 2012, with a total investment of about 1 billion yuan.

According to a Jiangsu polyester industry insider of Ming Ming Hui, when Ming Hui first invested in the project, the start-up capital was invested by 30 million yuan by 10 shareholders. The total investment was about 300 million yuan, and the rest of the funds were obtained from bank loans.

Ming Hui is not

The company has a high cost of financing, and a huge amount of bank loans will generate a lot of interest every month, which is a great pressure.

Meanwhile, in 2012 ~2015, according to our understanding, Minghui has borrowed more than ten billion yuan from the bank to operate and has high liabilities. And it entered the market in 2012, just in the stage of the downward trend of the polyester market. A considerable portion of the monthly sales of products will be used to repay the interest of the bank. How can it be profitable? "When talking about the main reason for Ming Hui's bankruptcy, a well-known manager of Jiangsu polyester enterprise said so.

Another Jiangsu polyester enterprise sales manager also expressed the same view.

According to his analysis, Minghui's high financial cost is a major factor in its bankruptcy.

"For the simplest example, after the listing of Tong Kun shares, its POY products cost less than 100 yuan for 1 tons, while Ming Hui POY has a financial cost of several hundred yuan per ton.

In the era of POY products' profit or even in a time of loss, this situation can lead directly to the loss of cash flow, and the consequences of long-term sustainability are very frightening.

Ming Hui has already gone bankrupt, and the situation of Zhejiang red sword group limited, which has recently fallen into bankruptcy hearsay, is still uncertain.

The red sword group, which has an annual capacity of 240 thousand tons of polyester and polyester, was established in 1999, and has won many honorary titles such as "the top 50 of China's chemical fiber enterprises".

However, due to capital chain breakage and implicated guarantee, the Hongjian group was formally shut down in August 22nd.

More than Ming Hui and Hongjian, according to incomplete statistics, since 2012, polyester chemical fiber enterprises have entered bankruptcy and liquidation due to fragmentation of capital chains.

For example, in 2012 polyester polyester filament annual capacity of 300 thousand tons of Zhejiang chemical fiber Abt Associates Inc and polyester polyester annual capacity of 100 thousand tons of Jiangsu three Xin Chemical Fiber Co., Ltd., 2014 polyester polyester filament annual production capacity of 200 thousand tons of Jiangsu Shenyang Chemical Fiber Co., Ltd., polyester polyester filament annual production capacity of 400 thousand tons of Zhejiang Fu Fu Chemical fiber group, and polyester polyester production capacity of 200 thousand tons this year, Zhejiang Longteng chemical fiber group has been eliminated.

According to the above analysis, some polyester enterprises, including Minghui, were rapidly expanded under the stimulation of the "4 trillion yuan" policy in 2008. Under the current market downturn of polyester polyester market, banks were lending loans to enterprises in order to prevent risks, which also directly led to the "death" of some small and medium sized polyester enterprises.

"This also brings us some introspection. If relevant departments are able to increase supervision over enterprise loans, banks can pay more attention to investment projects evaluation when lending to enterprises, or risk will drop some."

This industry insider regrets.

Excessive shareholders and excessive internal consumption are a big inducement.

Apart from the external causes such as industry environment and market demand, Minghui's poor management, excessive shareholders and excessive internal consumption are also important factors leading to its bankruptcy.

The Department Manager of the well-known polyester enterprises in Jiangsu pointed out that 10 shareholders of Minghui are running their own chemical fiber factories, and their enterprises also have certain profitability. Among them, the annual sales volume of a shareholder's DTY is around 30 thousand tons ~4 million tons.

Another Jiangsu polyester enterprise sales manager said that one of the original intentions of Ming Hui's annual output of 250 thousand tons of polyester project is based on providing POY products for these 10 shareholder enterprises.

Ming Hui's POY capacity is about 600 tons ~700 tons per day, while 10 shareholders can digest 300 tons of ~400 tons, about 60%.

At the same time, Taicang chemical fiber market is concentrated in two areas of Shaxi and Huangjing, with an average daily chemical fiber consumption of more than 10 thousand tons.

However, the asset liability ratio of Minghui is too high, resulting in heavy financial burden and serious solvency.

"When Ming Hui is running, the management of the management is not perfect in the aspects of finance, procurement and sales, because the overall production capacity is small, and the unit management cost is high.

The cost of sharing the cost of other 1 tons of products is about 1200 yuan, while the average cost of Ming Hui's 1 tons of products is about 1500 yuan. In addition, the market is not good enough, so it is very difficult for enterprises to make profits.

The Department Manager pointed out.

At the same time, the price pressure of 10 shareholders when buying Ming Hui POY products also caused greater pressure on Ming Hui's operation.

"At present, POY is small profits in itself, and it is difficult to make profits. But when 10 shareholders of enterprises extract POY from Ming Hui, it is lower than the average price per ton in the market by 200 yuan ~400 yuan. Under the increasingly difficult operation of enterprises, this is undoubtedly exacerbated."

He said.

He suggested that enterprises should attach importance to the prevention and control of financial risk awareness, improve enterprise management, and consider the development prospects of enterprises at the same time.

POY market downward accelerate Ming Hui elimination

According to introducing, Minghui polyester polymerization adopts the mature technology of Beijing Textile Institute, the equipment imported from Germany is imported from Germany, and the technology and equipment are advanced ranks at that time, and the quality of the products produced is higher.

However, Minghui's polyester products were put into the market after 2012, just in the downward trend of polyester polyester market, and did not enjoy the profiteering market of polyester industry in 2009 ~2011. This is also one of the reasons for the pressure on the profits of their enterprises.

According to the well-known department manager of Jiangsu polyester enterprise, in 2010 ~2011, the overall price of POY products was higher and profitability was stronger.

Around the end of 2010, the average price of POY products can be sold to around 12 thousand yuan / ton, with an average profit of 1000 yuan per ton.

Since then, the price of POY products has begun to enter a continuous downturn.

Since 2012, the average price of POY has dropped from about 10 thousand yuan / ton to 9000 yuan / ton in 2014, and this year the price has continued to drop to 6000 yuan / ton ~7000 yuan / ton, compared with 2010, the price has dropped to 50%~58%.

"At present, the melt cost of POY itself reaches about 5700 yuan / ton. Under the current price situation, some polyester enterprises are in the margins of profit and loss, and even go into a loss channel."

He said.

An important reason for the decline in POY prices is the phased and structural surplus of polyester production.

The industry pointed out: "in 2010 ~2011, stimulated by the policy, the polyester industry chain is expanding, so the production and demand is relatively balanced and the demand is strong, so the POY price is higher.

But at present, the overall upstream raw material industry is still in the inertial expansion, textile terminal demand is not in time to keep up, demand is low.

In this situation, many POY enterprises can only lower the price and throw away stock in order to protect cash flow, which is bound to cause price reductions among enterprises.

At the same time, Minghui polyester production capacity is also small because of its poor competitiveness in the market.

Ming Hui's annual capacity of 250 thousand tons, the daily output of only 600 tons of ~700 tons, and polyester "leading" enterprises such as Tong Kun daily output can reach 10 thousand tons, which is unable to surpass Ming Hui.

"The polyester industry in 2016 is still grim, and the industry" cyclical trough "appears, and enterprises have to go through hardships and hardships.

In Jiangsu and Zhejiang provinces, the scale of production capacity is similar to that of Ming Hui. Some enterprises that have been put into operation in 2000, some have been closed down due to various factors, and the new small and medium-sized polyester enterprises after 2012 ~2013 will be in danger.

The foregoing leaders predicted this.

There has always been a saying in the business circles: "a penny can't beat a hero."

The breakup of capital chain is the primary factor in many big business failures.

To a large extent, the series of predicament leading to Ming Hui's bankruptcy is only one of the epitome.

In particular, heavy financial pressure and financial burden are the most direct incentives and the last straw.

In fact, more and more small and medium sized chemical fiber, textile and garment enterprises in the industrial chain of the textile industry are faced with great financial pressure due to multiple factors such as limited financing channels, high financing costs and difficulties in listing.

Product differentiation is certainly a way to break through, but the pain of many small and medium enterprises is that if they are willing to invest in R & D, they will need a lot of money. The greater the pressure of capital and the tighter the cash flow, the easier it is to cut down R & D investment.

Small and medium-sized enterprises will be weak in their ability to resist risks. If the product has no characteristics and no advantages, it will not be difficult to understand the situation when it is faced with a depressed market situation, even if there is a loss and bankruptcy. Let alone the situation that POY products tend to be single and homogenized.

In the era of "universal entrepreneurship", the rise of small and medium-sized enterprises will emerge in an endless stream.

In the current stage of continuous adjustment and upgrading of the chemical fiber industry, many small and medium-sized enterprises are facing a lot of pressure.

Of course, it is very important for these enterprises to enter the market, whether their own business strategy is right or not, whether the products have characteristics or not, but on the other hand, the establishment of a more and more sophisticated, diversified and market-oriented financing channel, and a series of supporting factors such as the need for more scientific assessment and demonstration of new investment projects by banks and other departments are more critical to a certain extent.

Only when the external survival environment and the internal management of enterprises are continuously optimized, can the next "Ming Hui" emerge.