Analysis on the Transformation and Development of Textile Enterprises

In recent years, China’s textile industry’s output value and profit growth have been declining year by year, and international competitiveness has gradually weakened. The main obstacles to the development of China’s textile industry are due to the low level of equipment technology, insufficient R&D investment, insufficient brand building capacity, and lack of management capabilities. The market's competitiveness is not strong. The ability of companies to respond to changes in the external environment is insufficient, and they are vulnerable to changes in the policy environment, market demand, raw materials, energy, and labor costs. To get rid of the current difficult situation and improve international competitiveness, enterprises need to further improve the level of technical equipment, strengthen brand building, optimize products and market structure, and achieve development through transformation. At the same time, the government should reduce the tax burden on textile companies and improve the policy measures to support the “going out” of textile enterprises, encourage the upgrading of textile enterprises, achieve product and market transformation, and maintain the international competitiveness of China's textile industry.

In recent years, China’s textile industry’s output value and profit growth have been declining year by year. In 2008, the textile industry’s exports and profits experienced negative growth for the first time in ten years, and the scale of investment has rapidly declined. In 2011, the textile industry's output value, profit, and investment growth slowed down in an all-round manner, and the export growth rate was even close to zero. With the continuous rise of domestic labor, **, raw materials, and energy costs, coupled with factors such as appreciation and international trade barriers, the international competitiveness of China's textile industry has gradually weakened. In the fierce market competition, textile enterprises can only accelerate the adjustment of their industrial structure, market structure and product structure, improve their own technological innovation, technological R&D, and operation management capabilities, and achieve survival and development through transformation.

From May to June 2012, we conducted a special survey on the transformation and development of about 300 enterprises in 10 provinces including Guangzhou, Hubei, Liaoning, and Sichuan, including more than 80 enterprises in the textile industry Family. Nearly 2,000 questionnaires were distributed, of which the textile industry retrieved 81 valid questionnaires. The preliminary analysis of the survey data shows that in the environment, human resources environment, corporate sales and profit conditions, the questionnaire sample companies are better than the field survey companies, which is related to the overall operating conditions of the sample companies.

The overall situation of the textile enterprises interviewed and the preliminary analysis of the nature of the company 12 respondents are state-owned enterprises, 6 are collective enterprises, 49 are private enterprises, and 5 are Hong Kong, Macao and Taiwan-funded enterprises. Among them, 35 are listed companies, accounting for 43.2% of the total number of companies interviewed.

Corporate Size and Sales Revenue Among the interviewed companies, there are 31 large-scale enterprises, 36 medium-sized enterprises, 12 small-scale enterprises, and 2 micro-enterprises. In 2011, the company’s total assets were 60 billion yuan, with the smallest being 2 million yuan; enterprises with assets exceeding 5 billion yuan accounting for 12.2%; sales revenues with the largest 52 billion yuan, the smallest with 2 million yuan, and revenues of 5 billion yuan The above companies accounted for 13.2%. Overall, the size of China's textile companies is generally small, and the company's sales revenue is directly related to the size of the company.

A survey of the company's sales market distribution on the distribution of the company's product sales market from 2007 to 2011 showed that the vast majority of products of the interviewed companies were sold in the domestic market, with an average domestic sales ratio of 77.03%, of which 13 companies accounted for more than 90% of domestic sales. This accounted for 41.91% of the surveyed companies. The effective sample for this issue was 31 snow, and it showed an upward trend year by year.

There are 2 exporting countries and regions with more than 30 companies, both located in Guangdong and Zhejiang provinces where the textile industry is more developed. Both are privately-held holding companies and have operating hours of more than 15 years. One of them is a listed company. Most of the companies surveyed exported products to countries and regions below 10, with an average of 3.8 countries; companies that exported more than 50 countries and regions had one in 2007 and none in 2009 and 2011.

The growth of sales revenue in the past three years With regard to the growth of sales revenue in the corporate market in the past three years, 25 of the respondent companies have experienced rapid growth (over 10%), 38 have grown steadily (5%-10%), and 13 have seen slow growth. (0-5%), 5 sales revenue decreased.

Among the 25 companies whose sales revenue increased by more than 10%, only one listed company and four state-owned enterprises accounted for 2.86% and 33.33% of the sample companies respectively. These 25 companies, from 2007 to 2011, the average proportion of R&D personnel to the total number of employees was 9.76%, which was higher than the average of 8.6% for all sample companies. Of these 25 companies, the technological level of the production equipment of the leading products of the 9 companies has reached the international advanced level, and 13 enterprises have reached the domestic advanced level, indicating that the equipment and technology level of the enterprise has a great impact on the product quality and competitiveness of the enterprises, thus affecting the operation of the enterprises. Performance.

Human Resources and Environment According to data from the China Textile Industry Federation, 82.2% of China's textile enterprises had different degrees of absenteeism in 2011. In the first half of 2012, this figure dropped to 57.8%, but it is still at a relatively high level. For the problems that are currently reflected in the textile industry, such as recruitment difficulties, only 17 of the 81 companies surveyed believe that “the company’s human resources and environment are very good and can meet the needs of the enterprises.” Most of the companies report that the recruitment of general workers and skilled workers is very Difficulties, lack of practical ability of new recruits, and problems with keeping people.

Among the companies that believe that “the human resources are in good condition and can meet the needs of the enterprise”, only 9 are large companies, accounting for 29.03% of the total number of large enterprises surveyed, and of these 9 companies, 3 are also It is believed that there are problems in the recruitment of skilled workers and the lack of actual ability of new recruits. This proves that problems such as difficult recruitment of companies and unsustainable talents are widespread, and are not affected by the scale of the company. They should be directly related to the level of corporate management. In addition, of the 17 companies that believe that the company’s human resources and environment are very good, 6 have increased their sales revenue by more than 10% in the past 3 years, and 10 companies have increased by 5%-10%, accounting for 94.1% of the total, which indicates that companies with good operating efficiency The employment problem is relatively less prominent, and it can also attract and retain outstanding talents.

Of the companies with the problem of “high mobility and instability of excellent talents”, 19 are small and medium-sized and micro-enterprises with a ratio of 76%, indicating that large-scale enterprises are more attractive to outstanding talents.

** Environment Regarding the state of the company in 2011, 26.25% of the companies considered it “very difficult” or “more difficult,” and 31.25% of companies considered it easier to meet the needs of the company. This is quite different from the “extremely difficult” information we have obtained in the actual interviews, which is related to the overall good operating conditions of the sample companies. Of the 25 companies whose sales revenue increased by more than 10% in the past three years, only four indicated that the financing situation in 2011 was difficult. The rest did not have the problem of financing difficulties, indicating that the degree of funding needs of companies and the degree of difficulty in obtaining financing were directly affected. The impact of the business sales situation.

The six major issues faced by the development of China's textile enterprises are related to several key issues currently commonly considered to affect the development of China's textile enterprises, such as technological level, R&D investment and capacity, rising costs, and weak competitiveness of enterprises. As a result, there is a certain difference between the part and the outside world, which may have a certain relationship with the general business situation of the interviewed companies. However, on the whole, China's textile enterprises have problems such as inadequate equipment technology, relatively low R&D investment, and lack of corporate brand building capabilities. It is difficult for companies to develop unique competitive advantages.

Among the surveyed enterprises, there are 12 companies that have led the company in the production of equipment and their technological level has reached the international advanced level, 41 in China, 18 in the domestic medium level, 3 in the domestic low level, and some companies. Said that never made such a comparison. The proportion of enterprises whose equipment and technology has reached the international advanced level is 14.8%.



Among the 12 companies whose equipment and technology levels have reached the international advanced level, only one is a state-controlled enterprise, 11 are privately controlled enterprises; 1 is a listed company, 11 are non-listed companies; 7 are large-scale enterprises and 5 are Medium-sized enterprises; Most enterprises were established in the 1980s and 1990s, with the longest operating period of 54 years and the shortest one for 8 years; the company's asset size and income exceeded 1 billion yuan, and 2 companies had 30 billion yuan. These data indicate that companies with relatively long operating years and a certain degree of accumulation have a relatively high level of technology. Private companies are more flexible than state-owned enterprises due to their mechanisms, and have invested heavily in equipment and technological transformation and upgrading, and their technological level is relatively high. . In addition, there is also a certain correlation between the technological level of enterprises and the scale of enterprises. Larger enterprises with relatively strong capital strength have relatively large investment in equipment and technology, and the technological level is relatively more advanced.

Rising production costs Due to rising costs of energy, raw materials and labor, the company’s profitability has been affected. Only 3.75% of the surveyed companies indicated that the prices of their products will increase rapidly and their profitability will increase. 28.75% of the companies believe that product price increases are difficult to achieve. Significantly reduce or even lose money.

As the main raw material of China's cotton spinning industry, cotton accounted for about 40% of the total production cost. The domestic and foreign cotton prices continued to be greatly inverted. The raw material costs of textile enterprises were significantly pushed up, squeezing the meager profits of cotton spinning companies, and increasing the operation of cotton spinning companies. Risks have greatly weakened the international competitiveness of China's textile industry. According to a survey of 437 textile enterprises conducted by the China Textile Industry Federation in April-June 2012, 66.3% of the companies said that the inverted price of cotton has negatively impacted the company, with 22% of the companies affected by the cotton price. .

Insufficient investment in R&D A total of 61 companies have specialized R&D institutions, accounting for 81.33% of the total number of companies interviewed. The effective number of samples for this issue is 75? Snow, indicating that companies generally place more emphasis on R&D.

In recent years, the proportion of R&D personnel in the total number of employees indicates that in 2011, there were 3 companies with more than 50% of R&D personnel, both of which were small and medium-sized enterprises with an asset size and annual sales revenue of approximately 100 million to 3 billion yuan. The family is a state-owned enterprise, one is a collective-owned enterprise, and one is a Hong Kong-Macao- Taiwan-funded enterprise. The proportion of R&D personnel in Hong Kong, Macao, and Taiwanese companies rose fastest, rising from 2% in 2007 to 25% in 2009 and 60% in 2011.

Overall, the average number of corporate R&D staff in the total number of employees rose from 7.06% in 2007 to 8.33% in 2009 and 10.42% in 2011; the average ratio of R&D investment to sales revenue was 2.79% in 2007. They rose to 3.38% in 2009 and 4.21% in 2011, showing an upward trend year by year, indicating that companies are paying more and more attention to R&D.

Inadequate product market competitiveness Among the interviewed companies, 9 think that the company’s leading products have strong market competitiveness, 19 companies believe that they have a certain degree of competitiveness, 8 companies do not consider it competitive, and they account for 25% of the sample companies. 52.8 % and 22.2%.

Of the 9 companies that believe that products have strong market competitiveness, 1 are collectively-owned enterprises and 8 are privately-controlled enterprises; 2 large-scale enterprises, 6 medium-sized enterprises, 1 small-scale enterprise, and large-scale enterprises only weigh 5.6 %, indicating that there is little correlation between product market competitiveness and company size. Among these nine companies, the technological level of two production equipments has reached the international advanced level, and five have reached the domestic advanced level, showing that there is a strong positive correlation between the equipment technology level of enterprises and the market competitiveness of products.

Insufficient brand building capacity, 43 of them have their own brands, 7 are OEM, 21 are private brands + OEM, 2 are franchised, 5 have no brand, and companies with own brands account for 55.13 %.

From the proportion of company branded sales revenue to total sales revenue in the past five years, over 90% of the total 30 companies accounted for 52.63%, of which 24 companies accounted for 100%, accounting for 42.1%, indicating that the brand effect is direct Affect the sales of products.

From the distribution of the sales market, product export countries and regions have more than 20 companies, 100% own their own brands, including their own brands + OEM snow production, but at the same time, have their own brand of companies, their products The proportion of domestic sales averaged 71.2%, which was far greater than the proportion of export sales. The number of countries and regions where products were exported was 6.7 on average for companies with OEM and private label + OEM production. It can be seen that most textile companies have their own brand, but the brand's international influence and competitiveness are insufficient.

The management level is not high. From the point of view of scientific and standardized management of the interviewed enterprises since 2007, the ERP? Point Enterprise Resource Planning? Snow and LP? Point? Precision production? Snow or JIT? Respectively accounted for 24,7% and 32.1%, while the introduction of TQM? Point total quality management? Snow / ISO9000 and the use of e-commerce companies accounted for 60.5% and 58.1%, respectively, the latter a higher proportion, and our country-to-business comprehensive The mandatory provisions of the quality management standard certification are related, while the former is a low proportion, indicating that China's textile enterprises have insufficient initiative in scientific management, and management capabilities need to be further strengthened. In addition, the enterprises whose sales revenue increased by more than 10% in the past three years achieved 52% of the above management methods. This shows that the scientific management methods and business models have a great influence on the sales status of enterprises.

The main path of the transformation and development of China's textile enterprises can be seen in the data analysis of textile enterprises interviewed. The main obstacles to the development of China's textile enterprises are more from inside the company, mainly due to the low level of equipment technology, insufficient investment in research and development, and brand building capability. Insufficient market competitiveness due to lack of management capabilities and lack of management capabilities, companies’ ability to cope with changes in the external environment is insufficient, and they are vulnerable to changes in policy environment, market demand, raw materials, energy, and labor costs, resulting in a slowdown in sales growth. Decline in market share at home and abroad.

Due to the lack of core technologies and independent brands, Chinese textile manufacturers have long been at the low end of the global value chain, and the R&D, design and sales services at the high end of the value chain are in the hands of major importers such as the European Union, the United States, and Japan. . Therefore, although the textile industry has been the main force of China’s foreign exchange earnings in the past, China's textile manufacturers can only get about 10% profit, and the added value that exports bring to China is limited. In addition, due to raw materials, energy, and labor costs in recent years, The continuous rise has weakened the international competitiveness of our textile companies.

From process upgrading to value chain upgrading, the added value obtained is getting higher and higher. At the same time, the requirements for the accumulation of relevant knowledge in the enterprise are also getting higher and higher. After the 1950s, Japan has transformed itself from a low-value-added industry to a high-value-added industry through capital accumulation and technological innovation. It has achieved transformation and upgrading. In recent years, the United States has relied on technology and The accumulation of business knowledge will be achieved through the transition to the value-added production activities in the global value chain: hole processing and assembly, basic parts, R&D and branding.

It can be seen from this that China's textile companies must improve their position in the global value chain through the transformation of different models of products, markets, technologies, and management so as to increase their competitiveness and achieve sustainable development.

Optimize the structure of raw materials and products to cope with rising costs.

China's cotton spinning production capacity ranks first in the world, cotton yarn and cotton cloth rank first in the world, and the proportion of textile cotton is as high as 94%. In textile industry cotton, the ratio of fiber consumption for apparel, home textile and industrial textiles is 50:32: 18. The change in the demand for cotton for civilian clothing and home textiles is the most important factor affecting the total demand for cotton in China. It is also the largest affected by cotton prices.

To cope with the rising cost of raw materials, textile companies must first optimize the structure of raw materials, get rid of the structure that relies on a single cotton variety, and develop new fiber raw material resources, such as: more use of chemical fiber, imitation cotton fiber and biomass fiber to replace cotton fiber, and increase high added value. The high-tech fiber promotes the use of renewable biomass fibers, and thus suppresses the impact of cotton price fluctuations on companies. Second, adjust the product structure and increase the production and application of industrial textiles that are less affected by cotton price fluctuations. According to data from the China Textile Industry Federation, in the past 20 years, even in the world economic downturn, the global textile industry is still developing at a rate of 7.4%, and China's development speed is maintained at more than 18%. Take the old textile industry base in Hubei as an example. There are more than 440 industrial textile enterprises in the province with an output value of more than 12 billion yuan. Medical textiles production accounts for more than one third of the country's total, and more than 80% are exported to the European Union, Japan, and the United States. And other countries and regions. The state regards industrial textiles as the key to the adjustment and revitalization of the textile industry. Chinese textile companies should rely on their existing industrial base to quickly enlarge and strengthen industrial textiles, which in turn will drive the overall development of the textile industry.

Emphasis on enterprise technology and production process innovation, improve labor productivity Since the 1990s, international cotton spinning technology has developed rapidly in terms of high quality, high production, automation, and continuous development. The number of jobs for automatic spindle spinning in Europe is only about 6 million. However, most cotton textile companies in China use about 180 million spindles and some companies can reach 50-60. China's textile enterprises want to improve their international competitiveness. While strengthening management, they must focus on technological equipment upgrades, use new-type, high-efficiency cotton textile processing equipment, continue to introduce and digest advanced technologies, overcome core production technologies, and strengthen enterprises. Technological innovation capability will gradually increase the level of integration of cotton textile machinery and replace the traditional technical equipment of cotton textiles with automation, continuity and intelligence, so as to increase labor productivity and achieve a transformation from labor-intensive to technology- and capital-intensive.

Transfer to the high-end of the value chain and increase the added value of products As the second largest textile export economy in the world, the European Union has fifteen member countries mostly developed countries in the textile industry. About two-thirds of the global textile and apparel brands and trademarks are For the EU member states, 75% of the world's textile machinery manufacturers are in the EU. China's textile enterprises want to shift to the high end of the value chain, increase investment in R&D, strengthen the research and development of new products with independent intellectual property rights, develop their own brands, increase the added value of their products, upgrade their product quality, and develop in scale and specialization so as to increase The company's international competitiveness.

The policy suggests that the employment scale of China's textile industry will increase from more than 13 million people in 2000 to about 20 million people in 2012. The sales income above the scale will be 20 million yuan each year, and the number of snow companies will reach 36,700. The textile industry is an important civilian production industry in China. The sharp drop in trade volume and the meagre profit margins make textile companies face enormous pressures for survival. If the situation deteriorates further, it will have a huge impact on social stability and development. To get rid of the current difficult situation and enhance international competitiveness, China's textile enterprises need enterprises to improve their technical equipment, strengthen brand building, optimize product and market structure, and achieve development through transformation. At the same time, the government should encourage textile enterprises to upgrade their technology, realize product and market transformation, and maintain the international competitiveness of China's textile industry by reducing the burden of taxation on textile companies and improving the policy measures to support textile companies in “going out”.

The government encourages textile companies to develop and innovate through tax cuts to improve product and industry competitiveness. Given the current difficult situation in the textile industry, the government should adopt active fiscal and tax policies to encourage companies to research and develop innovations and technology upgrades to enhance product and industry competition. force. It is recommended that the income tax deduction policy for research and development and design expenditures be improved, including the improvement of relevant statistics and ledger systems, and policies that encourage enterprises to increase investment in research and development should be implemented. In addition, in order to encourage textile enterprises to increase investment in equipment reform, it is recommended to expand the scope of implementation of consumer-based value-added tax, and in particular to allow partial investment deduction of input tax from investment in plant facilities supporting equipment investment, so as to maintain the sustainable and healthy development of the textile industry.

We will build a financial support system that encourages textile companies to “go global”, make full use of foreign resources, and ease the pressure on domestic labor and raw material costs.

For many years, the government has been through policy guidance and support, such as increasing financial and taxation support, simplifying the approval process, and relaxing **controls. It encourages and supports enterprises with competitive advantages, brand advantages, and business management capabilities to “go global”. China's textile production enterprises to invest and build factories in Southeast Asian countries can effectively ease the pressure of rising labor costs, raw materials and other production costs, but also can reasonably avoid tariffs and trade barriers, will help improve the international competitiveness of China's textile companies. It is proposed to build a financial support system that complements and supplements policy finance and commercial finance on the basis of improving existing policies and encourages textile enterprises to “go out”. At the initial stage of overseas operations of enterprises, policy finance provides relatively preferential support and risk protection for overseas investment companies and participating financial institutions, relatively reducing the initial risk point for overseas investment of enterprises, and attracting more funds to participate. Overseas investment; After the company grows and expands, policy-based finance can gradually withdraw, and strengthen the depth and breadth of commercial finance entry, thus forming a benign interaction that complements and promotes policy finance and commercial finance.