Since 2022, the international environment has been complex and severe, domestic epidemics have continued to occur frequently, my country’s economic downward pressure has increased, and the growth rate of some economic indicators has slowed down. In April, the added value of the national industrial enterprises above designated size fell by 2.9% year-on-year and 7.08% month-on-month. The service industry production index fell by 6.1% year-on-year. The total retail sales of consumer goods fell by 11.1% year-on-year. The economic operation of the printing and dyeing industry is gradually coming under pressure, and enterprises are facing many difficulties and problems in the production and operation process. From May 16th to 20th, the association conducted a survey on member companies and key industrial clusters to understand the actual operation of the companies from the aspects of resumption of work and production, production and operation status, existing difficulties and policy demands, and analyzed and discovered the problems in the development of the industry. If there are any problems, we will promptly report the situation to the National Development and Reform Commission and other government departments through the relevant departments of China Textile Federation, with a view to seeking more policy support for the industry and helping enterprises to restore normal production order as soon as possible. This survey received a total of feedback from 6 key printing and dyeing industry clusters and 72 printing and dyeing and upstream and downstream related enterprises, which were summarized and analyzed to form this report.
1 Regional distribution of sample enterprises
Through surveys of industry associations in key printing and dyeing industry clusters, we can understand the overall situation of enterprises in each cluster. The local industry associations participating in the survey include: Guangdong Textile Association, Hubei Textile Association and Jingzhou Textile Printing and Dyeing Industry Association, Shaoxing Keqiao District Printing and Dyeing Industry Association, Ningbo Textile Industry Association, Jinjiang Dyeing and Finishing Industry Association and Shishi Dyeing Industry Association Whole trade association.
The companies participating in the survey are widely distributed geographically, basically covering areas with concentrated printing and dyeing production capacity, and are highly representative of the industry. The surveyed companies are mainly located in Hangzhou, Huzhou, Ningbo, Shaoxing, Tongxiang and Zhuji in Zhejiang Province; Suzhou, Jiangyin, Nantong, Yancheng and Yixing in Jiangsu Province; Quanzhou, Fujian Fuzhou City; Binzhou City, Qingdao City, Zibo City, Weifang City, Yantai City in Shandong Province; Guangzhou City, Shantou City and Foshan City in Guangdong Province. The number of companies participating in the survey from the above five eastern coastal provinces accounted for 87.5% of the companies surveyed this time. In addition, some companies in Shanghai, Xuancheng and Wuhu City in Anhui Province, Nanchong, Suining and Mianyang City in Sichuan Province, Yongji City in Shanxi Province and Ningjin County in Hebei Province also participated in this survey. The regional distribution of the interviewed companies is shown in Table 1.
2 Current status of enterprise production and operation
(1) Resumption of work and production
Since the beginning of this year, affected by the epidemic, some printing and dyeing companies in Shandong, Zhejiang, Jiangsu, Shanghai, Fujian and other provinces and cities have experienced phased shutdowns. After the local epidemic situation eased, companies have gradually resumed normal production. Judging from the survey, there are currently no large-scale shutdowns in the industry. Except for a few companies that have suspended production due to relocation or changes in their main businesses, other companies have maintained normal production and operation activities.
(2) Capacity utilization
At present, although the interviewed companies have gradually resumed work and production with the domestic epidemic situation basically under control, the overall capacity utilization level of the companies is low. We learned from local industry associations that the current operating rate of Keqiao District is only 50% to 60%, the average operating rate of 72 printing and dyeing companies in Ningbo City is about 60%, and the overall capacity utilization rate of printing and dyeing companies in Jinjiang City has dropped by 20% compared with normal levels. The recent operating rate of printing and dyeing enterprises in Shishi City has averaged around 75%, while the capacity utilization rate of textile printing and dyeing enterprises in Jingzhou City is relatively high, maintaining at around 80%. 38 of the 72 interviewed companies reflected their production capacity utilization. Among them, about 1/4 of the companies are currently in good production conditions, with a capacity utilization rate of more than 90%, and about 1/10 of the companies are affected by factors such as insufficient orders. Impact, the capacity utilization rate is below 60%. The capacity utilization rates of the 38 interviewed companies are shown in Table 2.
(3) Current status of production and operation
Most companies said that the international turmoil and national epidemic prevention and control policies have had an adverse impact on their production and operations. Their operating income has significantly decreased, operating costs have increased significantly, and profitability has declined to varying degrees. Especially since the second quarter, orders from printing and dyeing companies have declined significantly during the traditional peak season, and the domestic and foreign sales markets have continued to be sluggish. Only a few companies benefited from the orders accumulated in the third and fourth quarters of last year and the increase in processing fees. Their operating income and profits increased slightly year-on-year in the first quarter of this year. However, these companies are pessimistic about the production and financial data in the second and third quarters of this year. 37.7% of the companies surveyed mentioned issues such as insufficient orders and order transfers, and expressed concerns about the uncertainty of subsequent orders. Most of the companies participating in this survey are dominant companies in the industry. The current production and operation conditions of these companies are still like this, and the production and operation conditions of many other companies may be even more pessimistic.
More than 95% of the companies surveyed are processing companies, and the butterfly effect caused by the epidemic has affected both processing and self-operated companies to varying degrees. For example, a printing and dyeing company in Fujian that focuses on brand marketing had relatively full orders from January to April, and its main economic indicators remained within the normal range, but in May…Recently, downstream brand companies and garment manufacturers began to reduce orders, transfer orders, or place orders cautiously due to the impact of the epidemic, resulting in a 20% drop in the company’s order volume in May. If this situation continues to occur, it is expected that the company’s capacity utilization rate will only reach 70% from June to July.
3 Main problems faced by enterprises in production and operation
(1) Production costs have increased significantly, and corporate profits have been squeezed
First, the prices of natural gas, steam, electricity and other energy sources have increased significantly. Data from the National Bureau of Statistics show that domestic energy prices rose by 12.2% year-on-year in the first quarter of 2022. According to the survey, steam prices at textile printing and dyeing enterprises in Keqiao District, Shaoxing City increased by more than 20% month-on-month in April, and electricity bills rose by an average of 14%; Suzhou City The steam prices of printing and dyeing enterprises in Wujiang District increased by 5% month-on-month in March, remained unchanged in April, and increased by 10% month-on-month in May; the steam prices and electricity charges of Ningbo textile printing and dyeing enterprises increased by more than 20%; the actual electricity charges of Hanchuan textile enterprises have increased compared with November 2021. Nearly 35%. Energy is an important production factor for printing and dyeing enterprises, which has a greater impact on the comprehensive costs of printing and dyeing enterprises. The sharp rise in energy prices has put printing and dyeing enterprises under greater pressure on the cost side.
Second, raw material prices have increased significantly. Since the beginning of this year, affected by factors such as international turmoil and U.S. sanctions on my country’s Xinjiang cotton, the prices of upstream raw materials have increased significantly. The prices of cotton yarn, dyes and some basic chemical raw materials have increased by nearly 30%. Among them, the price of liquid alkali has increased by 70%, and the price of U.S. cotton has increased by nearly 30%. up 20%.
Third, logistics costs have increased significantly. Since the beginning of this year, sporadic epidemics have occurred in areas where printing and dyeing enterprises are concentrated, such as Hangzhou and Shaoxing in Zhejiang, Suzhou in Jiangsu, Binzhou in Shandong, Jinjiang in Fujian, Foshan and Dongguan in Guangdong. Local governments have strengthened epidemic prevention measures, causing transportation and logistics to be blocked and enterprise delivery cycles to be extended. The Shanghai epidemic that began in March has affected the logistics and cargo outbound operations of companies in many places. Smooth logistics and increased logistics costs have caused problems to the normal operations of enterprises.
The sharp rise in comprehensive production costs forced printing and dyeing companies to increase processing fees. However, considering the tolerance of downstream customers, the increase in processing fees was not as high as the cost increase, and corporate profit margins were squeezed.
(2) Order volume declined in the second quarter
Judging from the survey, the interviewed companies generally reported that orders were relatively sufficient in the first quarter, the production situation was basically good, and revenue and profits had improved. The economic performance of the printing and dyeing industry in the first quarter also reflects this situation. Data from the National Bureau of Statistics show that in the first quarter, the operating income of printing and dyeing enterprises above designated size increased by 16.86% year-on-year, and total profits increased by 43.28% year-on-year. However, after entering April, most companies are facing the dilemma of insufficient orders. The current capacity utilization rate is generally maintained at 60 to 70%, and some companies are only about 50%. The operating efficiency of the companies has declined, and some companies have even suffered losses. Since April, the domestic epidemic situation has been severe. Many foreign trade orders have been unable to be shipped smoothly and the delivery cycle has been difficult to guarantee. This has greatly affected customers’ willingness to place orders. Domestic orders have a tendency to shift to Southeast Asia. At the same time, under the influence of the epidemic, people’s willingness to consume textiles and clothing products as optional consumer goods is obviously insufficient. Data from the National Bureau of Statistics shows that from January to April, the retail sales of clothing, shoes, hats, and needlework textiles above designated size fell by 6% year-on-year, continuously It has been in a state of negative growth for two months, and weak terminal consumption in the domestic market is also the main reason for the lack of orders from printing and dyeing companies.
(3) Difficulty in recruiting and employing workers, and lack of high-quality talents
In recent years, as my country’s demographic dividend has gradually faded, corporate labor costs have increased significantly, and the pressure on recruitment and retention of workers has also increased. On the one hand, the printing and dyeing industry, as a traditional manufacturing industry, is not attractive enough to the younger generation. Many people born in the 1980s and 1990s are unwilling to work in printing and dyeing enterprises, especially in county-level enterprises in the central region. The aging trend of front-line employees in printing and dyeing enterprises is gradually emerging. On the other hand, it is difficult for professional and technical talents such as doctors and masters in the field of textile printing and dyeing, as well as senior technical talents in the industry, to stay in the enterprise for a long time. The shortage of technical talents is a common problem faced by printing and dyeing enterprises.
4 Corporate policy demands and suggestions
(1) Local government departments have further refined their epidemic prevention and control policies to ensure smooth logistics and the safety and stability of industrial and supply chains while doing a good job in epidemic prevention and control.
(2) Relevant government departments should establish a mechanism to ensure the supply and price of bulk raw materials; establish a mechanism and plan to ensure the supply of coal, stabilize coal prices, ensure stable supply of steam, natural gas and other energy sources at reasonable prices, prevent monopoly, and provide good opportunities for industrial enterprises production base.
(3) The government will increase its support for the real economy, relax financial credit conditions for traditional industries, and effectively reduce the financing costs of enterprises; implement tax reduction and exemption policies, and continue to implement social security deferral policies for enterprises in difficulty.
(4) Local governments have introduced relevant policies based on actual conditions to promote consumption, expand domestic demand and stabilize growth, effectively activate the vitality of the domestic demand market, and give full play to the driving role of consumption in economic growth.
(5) The government sets up special funds to support enterprise technology research and development, transformation and upgrading; strengthens human resource construction, and the government, society, schools and enterprises collaborate to cultivate textile composite talents to promote sustained and high-quality development of the industry.
</p
