Textile companies may lose orders due to rising raw materials

However, in the face of the fierce raw material and dyeing fees, fabric companies are still caught off guard. Some companies even stated that the sharp increase in raw materials has become the main reason for the loss of corporate orders.

Fabric companies: Rising raw materials have become the main reason for order loss

Xiaoshao area

The market in Xiaoshao area gradually stabilized last week, and printing and dyeing companies started operations one after another. Moreover, the arrival of workers at various printing and dyeing companies this year is generally normal, which basically does not affect the normal start-up of printing and dyeing companies. Post-holiday orders have also been placed one after another, but the order volume is average, and the rise in raw materials is also the main reason for the loss of some orders.

Fujian area

Last week, all dyeing factories, workwear factories, and cloth shops in the market were fully operational to receive orders. Affected by the rise in cotton futures, polyurethane, chemical fiber, chemical and other products, dyeing and fabric factories have raised prices by 0.3 yuan/meter to 0.5 yuan/meter. Due to the low market transaction volume due to the recent start of construction, the price of individual varieties of stone lions has been slightly increased by 0.2 yuan/meter. But the overall feeling is that the price is high but not marketable, waiting for further digestion and recognition by the market.

Wuxi area

The dyeing and weaving factories in Wuxi have started operations one after another and are getting into a busy state. Whether they are making finished products or natural cotton fabrics, many market participants have said that this year’s price increase is greater than in the past. Earlier, and more violently, due to the good order status, factories entered production mode early this year. The holidays in surrounding areas are over, and dyeing and weaving factories are starting to operate one after another. The prices of raw materials are rising and rising, causing the spot price to rise. Some orders received a few years ago are greatly affected by this. Large orders still have a wait-and-see mentality. Workers in dyeing and weaving factories It has basically arrived, and production has gradually returned to normal.

Suzhou and Jiaxing areas

Last week, companies started to resume operations one after another, and dyeing factories opened their doors to receive goods. The prices of some varieties in weaving factories have begun to increase, but overall it is difficult to receive orders. Staking out, asking for prices, and verifying prices are mostly common. The market in Yixing area gradually recovered last week, and customers’ inquiries for regular products increased significantly. However, due to recent unstable prices, there are still not many actual orders placed. Basically, orders from a year ago have begun to be shipped.

For fabric companies, price increases may be just the beginning

In fact, for fabric companies, the painful thing is not just the “rising raw materials”! In recent years, the issue of corporate costs has been mentioned frequently. From the State Council to small bosses, everyone is saying that the cost pressure on manufacturing companies is too high. What next? I haven’t seen any effective measures. In fact, to summarize, there are nothing more than four problems holding the “throat” of fabric companies: skyrocketing raw material and dyeing costs, expensive and difficult labor, increasingly strict environmental protection, and overwhelming taxation.

Problem 1: Raw materials and dyeing costs have skyrocketed

This point has been mentioned above, but the author still wants to add it. Since last year, starting from the source of goods, raw and auxiliary materials have been rising in all aspects. In fact, the costs of not only fabric companies, but also chemical fiber, printing and dyeing companies are also rising. It is true that the profits of upstream companies have improved through this wave of price increases, but the bulk of the profit is not actually in their profits.

For fabric 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 price of raw materials rises and the fabric price rises. You may also be able to refer to the upstream polyester factory’s response methods to increase your profits; if the business is not good, then it is a different matter! If a company wants to increase prices, but customers don’t agree, will there be a situation where orders are run away? Customers won’t budge,�There are always people rushing to make orders! This is a fatal blow to companies with poor business.

Problem 2: Labor is expensive and difficult

This is actually a long-standing problem in the industry! Enterprises on the eastern seaboard have faced this problem to a greater or lesser extent. Nowadays, the front-line workers in fabric companies are basically migrant workers. The author once saw a job recruitment: Shaoxing Yijian Knitting Machinery Factory is looking for a lathe worker, with a monthly salary of 8,000 (of course it is hard-earned money, which is not easy).

Last year, due to environmental protection rectification, many fabric printing and dyeing companies in Shaoxing were forced to close down. At that time, when faced with the problem of re-recruiting workers, a fabric boss gave a sad answer. “It’s almost the same. It’s easy to recruit ordinary workers with no skills, but it’s still hard to recruit skilled workers with more skills!” In fact, it’s not difficult to figure out. Now some fabric companies have begun to move to the mainland, and workers can earn 5,000 at home and 7,000 outside the home. No one is willing to come, and it will be even more difficult to recruit skilled workers.

Question 3: Environmental protection is becoming more and more stringent

Strict environmental inspections are actually the state forcing companies to transform. Companies without strength will close down as soon as possible. It’s that simple! In fact, without the intervention of national policies, the market will gradually clear out backward production capacity. But at this juncture, the country thinks this speed is too slow! No tax revenue has been collected, and you have created a lot of pollution problems. If you don’t close the door, who will close it? Judging from the current trends, environmental protection rectification and supply-side reform will definitely become the norm. Companies with strength have already made rectifications, while those without strength can only delay it day by day.

Problem 4: Tax burden is overwhelming

When I first entered the industry, I heard the saying, “In the fabric industry, all you earn is tax money!” But now there is a problem. After the third phase of the Golden Tax goes online, both in terms of supervision and punishment, , can’t be said to be “cruel”, they will punish you until you go bankrupt in minutes!

Since the risk is so high, why are there fabric companies willing to take such a big risk? The reason is simple, there is no money to be made! If you obediently turn in your contributions to the country, what will you eat and drink? It’s not like doing charity work! (Of course, a personal tip: You still have to pay the tax, and you can save money and trouble here.)

The way out is paved with blood and tears!

The way out for the future is also a commonplace issue! Enterprise reform, cost reduction and efficiency improvement! Small and micro businesses in the dry fabric industry are just grinding away their days. After working for so many years, I believe no one is willing to change careers when the end comes.

Improving product quality and making companies more competitive is the vision of all fabric companies. However, the initial investment in transformation and upgrading is too large, and the later returns are far away! Last year, a polyester company in the industry spent 80 million yuan on revamping its boiler combustion system! For small and medium-sized enterprises, such huge renovation costs are basically unaffordable!

Of course, small and medium-sized enterprises may not spend so much money on rectification, but it can range from a few million to tens of millions! If you spend all your savings to do this, you will face the risk of not being able to recover the funds. The situation of losing your wife and losing your army is not an exception. After working in the fabric industry for decades and spending money on equipment renovation, who can guarantee that it won’t be late? !

In short, the trend in the next few years will be: severe polarization. In the end, the strong will get stronger and the weak will be eliminated!

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