Reflections On Quanzhou'S Textile And Garment Industry'S "Red Income"

Last week, local leading textile enterprises -- Fujian

Prior to this month, China Taishan (Lian Jie textile) and Haidong Qingxin new material group also disclosed semi annual reports. The net profit of the former decreased by 57.7% compared with the same period last year, while the net interest rate decreased by 3.2 percentage points.

There are also two enterprises that have grown, namely, the Hong Kong Industrial Holdings Limited and the Fu Lian fabric technology.

The survival of Quanzhou's textile industry is based on the semi annual reports of these listed companies.

Raw materials "disaster", net profits and losses

In the first half of the year, the business revenue of was increased by 2 billion 969 million, an increase of 65.7% over the first half of the year. In China, half a year's income was 428 million, a decrease of 34% compared with that of the previous year. In the second quarter, the income of Fu Lian fabric technology holdings was 203 million, increasing by 203%.

"If we look at business income, most enterprises will grow, and the growth data of our textile industry will keep up with the overall situation.

In your media, it's called "all the way red."

Head of a textile enterprise in Quanzhou

The person in charge of the enterprise showed frustration and anxiety at the same time.

Because the rise in net income of many enterprises is behind the decline in net profits.

Phoenix Bamboo textile, net profit in the first half or 90% year-on-year decline; Taishan, China, half a year net profit of 46 million 200 thousand yuan, down 57.7% compared with the same period last year; Haidong Qing's net interest rate dropped 3.2 percentage points.

The sharp contrast of the two sets of data reflects the real development of Quanzhou textile enterprises.

For the reasons for the sharp decline in net profit, Feng Zhu textile, Taishan, Haidong and other enterprises all indicated that the first half was affected by the appreciation of the renminbi, tightening monetary policy, rising labor costs and fluctuations in raw material prices.

Among them, the frequent and volatile price of raw materials seriously affected the demand of textile market and made the profits of enterprises suffer a direct impact.

"Raw materials are rising, and industry is fiercely competitive.

Customers are in a wait-and-see attitude, orders are reduced and product prices are difficult to raise.

The sale of high margin products and the rising cost of raw materials led to the simultaneous reduction of profits. "

Taishan, China.

The analysis of these listed enterprises speaks of the aspirations of most enterprises in Quanzhou's textile industry.

Many enterprises such as Hongtai textile and Tai Long cloth industry are still experiencing the difficult stage of "rising costs and raising prices".

"In the first half of this year, the cost of the company increased by more than 20%, and the price of the product raised only about 5%. As a result, the burden of the cost is still heavy."

Liu Zhishun, deputy general manager of Tai Lung cloth industry, said.

"Net income or net interest rate can explain the survival of enterprises better than income data."

The above textile enterprises responsible person thinks.

Breakthrough of new technology

When most enterprises are troubled by balance of payments, the industry of Quanzhou and the textile industry have become the focus of attention of the textile industry.

It is understood that Bai Hong industry is actively developing new products. By June 30, 2011, 25 new differentiated PET filament made by the company have obtained 18 national patents, and the new devices developed independently have also been patented, and a number of other products and devices are being patented.

Although the price of raw materials is also rising, because of the diversification of product mix, the industry has a higher bargaining power and has shifted most of the cost increase to customers, so the gross profit margin has also stabilized at a higher level.

"We diversify our products to enhance bargaining power, and develop new products to increase market share, so as to fully grasp business opportunities and achieve the desired results in the first half of this year."

Shi Tianyou, chairman of the industry, said.

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And the fabric of Fulian is making a lot of profit in functional fabrics.

The enterprise and Xi'an Polytechnic University have achieved all-round cooperation in production, education and research and development. Nano three protection, anti ant insect, floating printing, photosensitive and other functional fabrics have become the main driving force for its net profit growth.

This breakthrough of "functional products diversification and increasing R & D capability" is trying to explore and explore for Quanzhou textile industry.

Many textile enterprises have stepped up cooperation with universities, hoping to create new technology products in the second half of the year, and seek new profit growth points.

In the first half of August, Haidong and Donghua University reached a cooperation on the "joint research and development project of comprehensive utilization of resources".

Prior to that, Haidong has been working with Wuhan Textile University, Tianjin University of Technology, Zhejiang Sci-Tech University and other universities to reach high-tech textile projects in different fields.

"The group will continue to improve and optimize the function, production technology and quality of nonwoven materials and recycled fiber.

By strengthening recycling and reducing pollutant emissions to reduce production costs, enhance enterprise competitiveness and bargaining power, and occupy a leading position in the market.

Nian Weicheng, chief executive of Haidong, said in an interview with the media.

Taishan, China has also strengthened its cooperation with colleges and universities.

In the second quarter of this year, the company received 5 new product prototypes from Wuhan Textile University. Next, we will pform these research results into commercial products through discussions with new customers.

"Under normal circumstances, new products will bring better sales and higher profits."

Taishan, China said.

Expand production and do what it takes

With the launching of cooperation projects with major universities, Haidong said it will continue to track market trends and implement different strategies of "group 35 plan".

This is in line with the new project process.

The production line of high temperature resistant filter material with an annual capacity of about 18 million square meters will be put into operation in September this year.

The compound synthetic leather production line with an annual capacity of about 22 million 500 thousand square meters will start production in the third quarter of 2012.

The new production base in Yongan, which is expected to be put into operation in 2014, is expected to expand the annual capacity of the regenerated chemical fiber plant to 162 thousand tons.

Haidong listed the expansion plan in detail in the "35 plan".

In the first half of the year, the development strategy has been reflected in the benefits, and the fabric of the Hong Hong industry and Fu Lian also indicated that it will take advantage of the situation and further expand its capacity to improve production efficiency and product quality, and create a higher performance.

It is reported that the new plant area of Hong Hong is expected to be put into operation in November this year. It is estimated that the design capacity and tensile deformation yarn design capacity of the company will be substantially increased by the end of 2013.

At the same time, the company's plan to expand the polyester film business has been approved by the board.

Fu Lian fabric said, "the future business strategy is to continue to focus on R & D and enhance product mix, enhance new and advanced equipment and production lines, thereby expanding the production of high-end functional products."

But not all textile enterprises will take a step forward in expansion, and many enterprises, including China and Taishan, are conservative in formulating the second half year plan.

Taishan, China, said that in order to cope with the challenging business environment, it would get higher cash inflow from business activities according to the pace of credit adjustment payments provided by suppliers.

It is reported that the group's net cash in the first half is 798 million, up from 426 million in the same period last year.

"Maintaining a sound balance sheet and net cash will enable the group to tide over its business difficulties."