Roland Dollar: The textile and apparel industry faces challenges such as difficulties

On March 6, the China Textile Industry Federation (hereinafter referred to as “China Textile Federation”) held the “2012 Economic Situation Presentation Conference for the Textile Industry”. At the conference, Sun Huaibin, spokesperson of China Textile Federation and Sun Huaibin, director of the Information Center, introduced the operating conditions of the textile industry in 2011, analyzed in depth the trends in the operation of the textile industry in the first half of 2012, profoundly explained the major risks facing the industry, and The risks have brought forward policy recommendations and industry measures to ensure the stable operation of the industry.

Highly concerned about the issue of cotton Sun Huaibin introduced to reporters that 2011 was the first year of the 12th Five-Year Plan. Overall, the major economic indicators of the industry maintained rapid growth and the operating situation was basically stable. However, the various types of risks faced by the operation of the industry have increased significantly over the previous year. The continuous downturn in the international market, the ups and downs in the prices of raw materials, the continuous rise in production costs, and the tightening of the environment have increased operating pressure, and the growth rate of major economic indicators has slowed down. The momentum, export volume, and industry profit growth have been particularly declining. The operation of small and micro enterprises has encountered major difficulties.

In particular, small, medium-sized enterprises in textile industries still face problems such as poor penalties, high costs, and unstable order numbers. In particular, export-processing companies have relatively weak anti-risk capacity and are extroverted under the expected conditions of appreciation. It is also more difficult for processing companies to change brands. Once these enterprises are shut down too much, they will directly affect employment and social stability.

According to statistics, in 2011, 36,000 textile enterprises above designated size achieved a total industrial output value of 478.865 billion yuan, an increase of 26.8% year-on-year; sales value of 530.17 billion yuan, a year-on-year increase of 26.86%. The total investment in fixed assets of projects with a total investment of over 5 million yuan was 679.91 billion yuan, an increase of 36.3% year-on-year. The total value of textile and apparel exports was 254.12 billion U.S. dollars, a year-on-year increase of 19.9%; of which, export prices increased by 19.3% year-on-year, and the number of exports only increased by 0.5% year-on-year.

Sun Huaibin said that although various indicators have maintained rapid growth, the growth rate has been declining; in particular, exports, mainly because of price increases, have pushed up their growth. Last year, the number of industrial exports from large categories of products was mainly due to the decline in the number of cotton products. Because last year's cotton prices fluctuated, the orders for cotton products were in trouble, and the cotton spinning industry suffered a loss of more than 10%. At the same time, domestic cotton prices were much higher than international cotton prices, which greatly weakened the international competitiveness of domestic cotton products.

Sun Huaibin said at the same time that, although the country carried out cotton collection and storage in September last year and stabilized cotton prices, there are no established plans for the release of cotton. If reserve cotton is thrown away with “cost + profit”, it will drive up domestic cotton prices, and the domestic and foreign cotton price gap will continue to widen, and the international competitiveness of textile enterprises will be further weakened.

It is worth mentioning that India, the second largest exporter of international cotton, recently issued a statement banning cotton exports, which will have an important impact on international cotton prices and stimulate the increase of US cotton prices. "The industry is highly concerned about the issue of cotton, and it is urgent for the state to issue relevant policies." “Sun Huaibin said that the industry expects the relevant state agencies to adopt a fiscal subsidy method for this year's reserve cotton reserves and implement parity at a timely manner. In terms of cotton imports, in addition to the established quotas, it hopes to increase the number of additional sliding tariff quotas to increase international Import of cotton resources to stabilize domestic cotton prices. “The industry is not afraid of the rise or fall of raw materials. The fear is that the prices will go up and down.”

Take measures to ensure the stable operation of the industry Sun Huaibin told reporters that the overall situation in 2012 remained stable, but the industry still faces a series of risks.

From the international perspective, the continuous escalation of the European debt crisis and the weak recovery of the world economy will have a significant negative impact on the consumption of the international market. It is expected that in the first half of 2012, China's textile and apparel export demand will be insufficient and competitive pressure will become more prominent. In the first half of the year, the number of industrial exports will be low or negative.

From the domestic point of view, the downward pressure on economic growth has further increased, the growth of social investment has slowed down, and it has become increasingly difficult for residents to increase consumption. At the same time, as raw material prices fluctuate, and the labor cost of enterprises has risen rigidly, and the financing environment of small and medium-sized micro-enterprises has not yet substantially improved, textiles and clothing as a competitive industry may face greater difficulties.

Therefore, it is an arduous task facing the textile and garment industry to speed up structural adjustment, transformation and upgrading, strive for national policy support, reduce operational risks, and promote stable economic growth.

In order to ensure the smooth and healthy operation of the industry, Sun Huaibin believes that China Textile will actively pay attention to difficulties that cannot be solved by the company itself, and timely communicate with relevant state departments to make efforts to resolve the difficulties facing the company. In addition to the cotton issue, the state should further introduce policy support in reducing the cost of bank loans, reducing the tax burden on enterprises, implementing support policies for SMEs, and supporting enterprises in “going global”, in order to help enterprises tide over difficulties and stabilize employment. Develop and create a good environment.

Sun Huaibin specifically mentioned that it is hoped that governments at all levels will pay close attention to the state of survival of enterprises, implement the policies supported by the State Council in support of various fiscal, taxation, financial, and technological reforms for small, medium and micro enterprises, and accelerate the establishment of industrial innovation platforms and public service systems that benefit the majority of small and medium-sized enterprises. Industry alliance.

For textile and garment companies, Sun Huaibin said that they need to make greater efforts to cope with the rising costs of a series of factors such as rising labor costs, fluctuations in raw material prices, and rising energy and power prices.

Enterprises should strengthen basic management such as quality management, financial management, equipment process management, warehouse management, and logistics management to increase labor productivity and reduce production costs; accelerate technical reform and upgrade advanced equipment; start from the source to strengthen new product development and strengthen Emphasis on R&D and industrialization of key technologies such as simulation, functionality, differentiation and high-tech fiber materials, industrial textiles, etc., increase the added value; strengthen the construction of independent brands and optimize the construction of marketing channels; use financial tools to withstand market risks; Great market development, reduce trade frictions.

Sun Huaibin specifically mentioned that in strengthening brand building, it is necessary to build a successful model for Chinese national brands, that is, to promote the development of competitive brand companies at both ends of the industrial chain and to drive the support of small and medium enterprises. This model has already performed in the domestic textile and clothing industry. For example, "Red Bean" now has more than 400 small and medium-sized supporting enterprises. They jointly produce products for "Red Bean", develop together, work together to make national brands bigger and stronger, and promote the transformation and upgrading of the industry.

Sun Huaibin also reminded that while encouraging enterprises to “go global”, we must also see neighboring countries such as Vietnam and Cambodia. Although their labor costs are low, they have limited space and capacity to accommodate large-scale industrial transfers. They are in infrastructure and electricity. Supply, industrial chain and other conditions are worse than domestic ones. Therefore, the government must strengthen the macro-guidance of establishing low-end production and processing companies abroad, prevent large areas from flooding too quickly, and reduce the impact on domestic employment.