Do you still remember the news about the bankruptcy auction of Shaoxing printing and dyeing factory in the previous stage? At that time, many people were wondering why printing and dyeing, which was once the most advantageous product in the industry chain and was known as the textile cash cow, had fallen to this level. However, judging from the recent survey of the China Printing and Dyeing Association, this may not be an isolated case, but may just be the case in the industry. tip of the iceberg!
Printing and dyeing research: 6 key printing and dyeing industry clusters and 72 printing and dyeing and upstream and downstream related enterprises are facing many difficulties
From May 16 to 20, the China Printing and Dyeing Industry Association conducted a survey on 6 key printing and dyeing industry clusters and 72 printing and dyeing and upstream and downstream related enterprises. The local industry associations participating in the survey include: Guangdong Textile Association, Hubei Textile Association and Jingzhou City 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 and Finishing Industry 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.
According to the survey, the economic operation of the printing and dyeing industry is gradually under pressure, and enterprises are facing many difficulties and problems in the production and operation process.
Capacity utilization: Keqiao District’s operating rate is only 50%~60%, and the overall level is generally low.
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%.
Production and operation status: The butterfly effect caused by the epidemic has varying degrees of impact on both processing and self-operated enterprises
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. However, since May, downstream brand companies and garment manufacturers have begun to reduce and transfer orders due to the impact of the epidemic. Or placing orders cautiously, resulting in the company’s order volume falling by 20% 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.
Costs, orders, recruitment and other aspects are the main culprits of the market downturn.
(1) Production costs have increased significantly, and corporate profits have been squeezed
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 month-on-month in March.�5%, which was flat in April and increased by 10% month-on-month in May; the steam prices and electricity bills of Ningbo textile printing and dyeing companies increased by more than 20%; the actual electricity bills of Hanchuan textile companies have increased by nearly 35% compared with November 2021. 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.
(2) Order volume declined in the second quarter
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 2 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
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.
All in all, in the era of inflation, raw materials are rising step by step, demand is always in a state of strong expectations but weak reality. The demand recovery speed is slower than expected, and the industry is about to enter the off-season. Expected orders are relatively short, product inventories are high, and downstream pressure is high. The contradiction between the cost side and downstream supply and demand appears, and we should be wary of the negative feedback brought by the demand side to upstream raw material prices.
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