After Russia cut off gas to Europe for 20 days, a large number of companies also paid their bills at the end of the month. Faced with such high energy and product prices, countless factories have no choice but to shut down and cease production.
European Underwear Group
Shut down all production at the Felina factory!
STOCKHOLM – European lingerie group has confirmed it will cease production at its knitting factory in Mannheim, Hungary. The Mannheim factory is mainly used to produce underwear for the Felina brand, which was integrated into the ELG Group in 2017. All production at the factory will cease and remaining orders will be outsourced to sister companies within the group.
ELG is a fully vertically integrated intimate apparel and lingerie group headquartered in Stockholm, Sweden, covering the entire value chain from product design and raw material sourcing to production of fabrics and lace, molding and dyeing, manufacturing and distribution of finished products. “The cessation of production-related services at the Mannheim plant is painful,” said managing director Neeme Jõgi. “The production stoppage in Mannheim was inevitable due to structural changes in the textile industry and textile retail. The restrictions on travel and movement in recent months, logistical problems and increased costs, as well as the concerns of our consumers about sustainability issues These changes are inevitable.”
In addition, Hakle, one of Germany’s largest toilet paper manufacturers, has filed for bankruptcy. Hakle said that due to the impact of rising natural gas prices and soaring raw material costs, the company encountered production difficulties and had to apply for self-management bankruptcy procedures.
Recently, another Dr. Schneider Group with a history of nearly a century has also submitted a bankruptcy application to the German District Court. Just in 2021, Dr. Schneider Group’s revenue will remain at about 451 million euros (approximately RMB 3.1 billion). In August this year, Dr. Schneider Group still stated that the order situation was good, but it was also controlling costs and looking for investors. In September, the group finally stated that its funds had not improved and its operations were unsustainable, so it had to file for bankruptcy.
Raw material costs increased by 266%!
More than 100,000 companies in Europe may face bankruptcy!
According to a survey of 593 companies conducted by the Confederation of German Industry (BDI) from mid-August to early September, 58% of companies said they were facing major challenges, 34% were worried about survival issues, and 25% planned to relocate some of their companies. business. The survey also pointed out that one in ten companies has reduced or even interrupted production.
In addition to Germany, other European countries are also facing a wave of corporate bankruptcies. On October 7, local time, data released by the British Office for National Statistics showed that affected by the surge in energy prices, the number of bankrupt companies in England and Wales reached 5,629 in the second quarter of 2022 (April to June). This data is The highest level since the third quarter (July to September) of 2009.
On October 5, Sangali, chairman of the Italian retail industry organization Confederation of Commerce and Industry, said that from now to the first half of 2023, inflation caused by rising energy prices may cause the closure of at least 120,000 small businesses in the country, with losses of more than 370,000 employment position.
In addition, Android Credit Insurance Company estimates that the number of corporate bankruptcies in the Netherlands will increase sharply next year. The company predicts that the number of bankruptcies in the Netherlands will increase by 9% in 2022 compared with the previous year, and that this number will surge to 77% in 2023. There will be approximately 4,100 bankrupt companies in the Netherlands next year.
Global output loss is approximately $2.8 trillion!
OECD: Global economic growth may slow to 3% in 2022
According to the Organization for Economic Co-operation and Development (OECD), global economic growth is expected to expand at a modest 3% in 2022 before slowing further to just 2.2% in 2023. This is well below the expected economic growth rate before the war and is equivalent to a loss of global output of approximately US$2.8 trillion in 2023.
Inflation is expected to gradually ease in most G20 countries by 2023 as tighter monetary policy takes effect and global growth slows. Overall inflation in the G20 economies is expected to fall to 6.6% in 2023 from 8.2% this year, while overall inflation in the G20 advanced economies is expected to fall to 4% in 2023 from 6.2% this year.
“After the Russo-Ukrainian war, the global economy has lost momentum. Gross domestic product growth has stalled in many economies and economic indicators point to a slowdown,” OECD Secretary-General Matthias Coleman said in an outlook report. will expand further.” As the global economy emerges from the pandemic, already existing inflationary pressures have been severely exacerbated by the war. ”
Relative to the Outlook’s central forecast, the economic shock could reduce growth in European economies by more than 1.25 percentage points in 2023 and increase inflation by more than 1.5 percentage points. According to an OECD press release, this will push many countries into full-year recession in 2023, while GDP growth will also weaken in 2024.
Some of the issues highlighted were the ongoing costs of stress on global supply chains, as well as the potential for debt crises and financial contagion in many emerging market and low-income economies.
Energy crisis boosts sales of winter clothing
Foreign trade companies should be more alert to related shipping risks
The energy crisis is a double-edged sword. While nearly 100,000 companies in Europe are on the verge of bankruptcy, it has also recently boosted the sales of the entire winter product industry in Europe. Not only are the prices of domestic firewood and coal soaring due to short supply, but electric blankets made in China are also , heaters, winter clothing, etc. are also experiencing a wave of overseas sales. According to data from the General Administration of Customs, as early as June and July this year, the monthly number of Chinese electric blankets imported by the 27 EU countries rose rapidly from 521,000 to 1.29 million. But at the same time, we should be vigilant that when textiles are selling hot in winter, foreign trade companies should learn from the past, and they need to be aware of the related shipping risks that the current situation may bring and make relevant plans and measures.
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