Just now, a piece of news about “preliminary restructuring of a well-known textile company” appeared in the editor’s field of vision.
According to the news, affected by various internal and external factors such as economic environment, financial policy changes, and industrial cycle adjustments, the company is indeed facing major difficulties and its operations have been severely impacted. After many studies by relevant departments, it was finally decided to carry out a package of rescue measures for the company through pre-reorganization (the pre-reorganization period is three months).
Seeing this, I can’t help but sigh! If this is the case for well-known companies, one can imagine the plight of small and micro enterprises.
The industry continues to suffer bad news, and multiple pressures plague companies
Recently, a textile boss complained like this, “Being still is… the market trend!”
You know, this boss is mainly engaged in spot nylon spinning, and nylon spinning is supposed to be a hot-selling variety at this stage. Coupled with the spot model, why is there no movement in the market?
Preliminary research shows that since the beginning of this year, the textile market has experienced internal and external pressures. Except for a few special varieties, the overall market performance has been mediocre. Judging from the gray cloth inventory data, compared with previous years, this year is actually a bit calm, and the fluctuation range is quite limited.
A textile person said that no matter whether it is making polyester or cotton, there is no good news, but bad news. Sales during the “Golden Nine and Silver Ten” periods were off the charts, while “Double Eleven” sales were sluggish. The failure of the international market has led to the shrinkage of foreign trade, while domestic sales have been weak, and some companies have even directly planned to take holidays.
In addition to the pressure on orders, the pressure on payment also follows.
First of all, the current repayment cycle of most textile companies has been extended. The original 1-3 month account period has been forced to extend to 3-6 months, and due to poor repayment, the company’s capital chain has suffered a major test; secondly , the closer to the New Year’s Eve, the more rampant the old gangsters become, with low-cost sales of cloth on credit, contract fraud, etc. happening from time to time. Textile bosses have become disgruntled after hearing about the “old gangsters”.
Finally, there is pressure from inventory. Due to the long-term oversupply in the textile market, in order to effectively remove inventory, selling goods at low prices has become a common method. In this way, fabric prices are easy to fall but difficult to rise. And after turning on the selling mode, whether anyone will take the order is also a question.
There is already excess production capacity, and entrants are still coming one after another.
Through research, we found that most textile companies are not optimistic about the market outlook. Among them, the most mentioned reason is overcapacity.
Textile bosses complained that overcapacity was like the sword of Damocles hanging above their heads. It not only brought about an unbalanced supply and demand relationship, but also caused the market environment to fall into involution. In order to compete for the same piece of cake, “price wars” are everywhere, and the already slim profit margins are constantly being compressed.
But complaints are complaints, and the pace of capacity expansion has not stopped. For example, in October, a textile machinery exhibition was held at the Shanghai National Convention and Exhibition Center. The exhibition site was crowded, buyers were enthusiastic, and each booth received many intended orders. If this is not intuitive enough, let’s look at another set of data.
Data show that from January to June 2023, major domestic manufacturers sold 14,000 air-jet looms, a year-on-year increase of 14.75%; they sold 25,000 water-jet looms, a year-on-year increase of 4.17%. Based on this speculation, by the end of 2022, the number of water-jet looms nationwide will be approximately 770,000, and by now this number should be close to 820,000.
In addition to the substantial increase in production capacity, new companies have also sprung up. A trader admitted that although he has been involved in the textile industry for more than eight years, the company was just established at the end of last year.
It is understood that this situation is extremely common in the textile industry. This textile boss was originally a salesman for a large company. Later, he had a stable customer base and understood all aspects of the industry, so he simply opened a company and went it alone.
Regarding the next work arrangements, the textile bosses all have their own secrets. Some just lie down and prepare to take an early vacation; some hurry up to collect money and reduce potential risks; and some use self-media to seek more customers… But no matter what they choose, they are all for a better survival!
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