Xuzhou Economic Development Zone Court accepted the bankruptcy liquidation case of Xuzhou Huihong Textile Raw Materials Warehousing Co., Ltd. Xuzhou Huihong Textile Raw Materials Warehousing Co., Ltd. was established on August 25, 1990, with a registered capital of 13 million yuan, and the company type is a limited liability company. The company’s business scope: warehousing services; market equipment leasing; cotton acquisition, processing and sales; cotton seed and cotton linters processing and sales; cotton yarn and cotton products processing and sales; knitted velvet manufacturing and sales.
The People’s Court of Taihe County, Anhui Province, based on the application of Taihe County Huafen Textile Co., Ltd., ruled to accept the applicants Anhui Pacific Special Net Industry Co., Ltd. and Taihe County Huafen Textile Co., Ltd. A case involving bankruptcy liquidation application of the respondent Taihe County Huafen Textile Co., Ltd.
Since this year, the epidemic, cost increases, power restrictions and production restrictions have continued to hit the textile industry , many textile companies auctioned assets or even declared bankruptcy directly. We comprehensively analyzed more than 40 cases of industry bankruptcy and concluded six ways of death for textile companies:
Hit Price wars are exhausting
Textile companies like to engage in price wars. The prices of some products are originally very low, but competitors will lower the prices even lower. Of course, there is no guarantee of quality. Due to price wars and vicious competition, many companies have small profits and are simply unable to carry out technological innovation. As a result, they can only maintain market share through price cuts, forming a vicious circle. In the context of consumption upgrades and overcapacity, if companies still make shoddy products and seize the market through low prices, they can only seek death.
Labour costs are crushing
Today, labor costs are getting higher and higher. Many textile companies are facing the pressure of 15% wage increase every year, and the products The price has not been increased. Most companies have reduced their workforce, but they still cannot withstand the pressure of rising costs. At present, the quality of the labor force of Chinese workers has not improved. Many young people born in the 1990s are unwilling to enter factories, and gray-haired old people can still be seen on the assembly lines. The explicit and implicit costs of labor have risen sharply, and many textile companies have been overwhelmed.
Killed to death for random guarantees
There are still many textile companies started by people from the same village or town at the same time, and they have mutual connections. Inextricably linked. Moreover, in the process of business expansion, the business owners are indispensable for the exchange of favors and mutual help. Therefore, a series of guarantees has appeared, and everyone will be prosperous and everyone will suffer losses. Banks are urging companies to borrow money and encouraging them to guarantee each other. Some local governments have vigorously encouraged guarantees for the sake of local economy and employment. In an environment of overcapacity, when banks start to withdraw loans, it is like burning a warship, killing some otherwise healthy companies.
Indiscriminate investment will lead to death
It is difficult for textile companies to make money, so many companies will invest in projects that have nothing to do with their main business. The most common one is real estate. Indiscriminate investment by enterprises often puts great pressure on cash flow. Once banks withdraw loans, the consequences will be serious. Following the trend and investing indiscriminately can easily damage the mentality of textile enterprises. Once they taste the sweetness of making “quick money”, it will be difficult for them to set their mind to doing business again.
Transformation is too slow and is delayed
Textile enterprises have a serious overcapacity problem. If they do not transform in time, they will only go bankrupt. In fact, there is still room for transformation and upgrading of textile companies. For example, they can develop into more segmented and professional fields, or abandon low-profit products and focus on high-profit products. In this process, textile companies need to do a lot of work. If they are not timely and allow the external environment to deteriorate, they will only be eliminated.
If you don’t meet the environmental protection standards, you will die
Environmental protection supervision is becoming more and more strict. If you don’t meet the standards, you need to make immediate rectifications and invest a lot of money and resources on yourself. However, many companies still only choose to “focus on money” and only focus on immediate interests while ignoring the long-term development of the company. Sooner or later, they will be shut down or bankrupt.
“The wave of bankruptcies” is not the result we want to see, but the emergence of the wave of bankruptcies is like a blow to the head , wake up domestic textile enterprises, the industry has now reached an extraordinary period, if we continue to blindly expand and still use low-cost products to seize the market, what will eventually greet us will be “destruction”. All textile companies should learn to think and adapt, so that they can break into a new world in such a harsh environment. </p
