Under the constant impact of the market, more and more textile companies are falling down. Even established companies that have been established for decades are unable to survive. They have no choice but to “exit”. Perhaps this way of stopping losses is not enough. The loss will be too ugly.
The editor has previously counted the textile companies that have gone bankrupt in the past six months. Just recently, another veteran company with more than 20 years of experience was issued a consumption restriction order by the court, and legal persons were also restricted from consumption.
According to online information: The company is located in Jinjiang City, Fujian Province, a famous hometown of overseas Chinese in China. The company was founded in 1997, covering a total area of more than 1,200 acres, with more than 4,000 employees and an annual output value of over 8 billion.
The company is mainly engaged in the development, production and import and export trade of polyester yarn products, including various conventional low elastic yarns, high elastic yarns, network yarns and other differentiated and functional fibers and polyester short fiber products. It has an annual output of 180,000 tons of polyester, It has a production capacity of 150,000 tons of polyester filament, 60,000 tons of polyester short yarn, 65,000 tons of differentiated fibers, and 10,000 tons of chemical oils. The products are sold at home and abroad, and the product quality is fully recognized and trusted by customers.
The company has been awarded honors such as “Four Major Chemical Fiber Bases in Fujian Province”, “Key Supported Enterprises in Fujian Province”, “Major Utilization of Foreign Investment Enterprises in Fujian Province in 2002”, and “Top 300 Industrial Enterprises in Fujian Province”.
So why did a good textile company fall from the high point to the bottom overnight?
A price war will kill you
Textile companies like to engage in price wars. The prices of some products are originally very low, but competitors will drive 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.
Raw materials are soaring and squeezed to death
In recent years, the prices of raw materials required for textiles have risen sharply. Many people think that the rise in raw materials is a good thing. When raw materials rise, product prices can also rise. The higher the price, the greater the profit, but this is not the case. For textile companies, the impact of the surge in raw materials on the company depends on the situation. If the business is good and there is no time to fill the order, there will be no problem if the raw materials increase and the cloth price will follow suit; if the business is not good, it is a different matter! If the company wants to increase the price, but the customer does not agree, there will be a situation of running out of orders? Customer They won’t give in, and there are always people rushing to fill orders! This is a fatal blow to companies that are not doing well.
Labor costs are crushing
Today, labor costs are getting higher and higher, and many textile companies are facing pressure to increase wages by 15% per year, while the prices of products have not been improved. 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.
Transformation is too slow and gets dragged to death
The overcapacity problem of textile enterprises is very serious. 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 environmental standards, you will die.
Environmental protection inspections are becoming more and more stringent. If standards are not met, immediate rectification is required, and a large amount of money and resources are invested in self-improvement. However, many companies still choose to “focus on money” and only focus on immediate interests while ignoring the company’s In the long run, closure and bankruptcy will be a matter of time.
Various factors are before us. The textile industry should learn to think and learn to adapt, so that it can break into a new world in such a harsh environment and accelerate the development of my country’s textile industry.
In 2022, it will not be easy to follow the textile path, but please believe that if you stick to your original intention, the future will eventually belong to every hard-working textile person.
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