In the second half of 2016, what frightened textile companies the most was undoubtedly the rising prices of various raw materials. Among them, the prices of polyester filament, nylon, spandex, cotton, etc. that we are familiar with, sometimes even multiple prices a day, with shocking fluctuations. than stocks.
However, that is not what I want to talk about today. After all, no matter how much raw materials rise, they will eventually stop one day, and price increases are an industry matter and are not targeted at individual companies. In terms of business mentality, there is always a time to take a breath; if raw materials continue to rise, how many customers will understand and can Pass the price to downstream. However, some things cannot be explained or discussed, which is more terrifying than the crazy price increase of raw materials!
Environmental protection regulations are becoming more and more strict, and if you are not careful, you may have to close down and stop production!
In the past two days, the circle of friends of textile people has been full of news about environmental protection rectification. The third batch of central environmental protection inspection work has been fully launched. Jiaxing has launched a special campaign to rectify and improve water-jet looms. 10,000 water-jet looms will be eliminated within the year, etc. , these news once again made people in the industry panic.
Judging from current trends, environmental protection rectification and supply-side reform will inevitably become the norm. Large and powerful companies can make rectifications early, but small companies without power can only delay it day by day. Even though they had prepared for the worst, the information they came across still frightened the business owners. For example, according to estimates by some paper-making and printing companies, it costs 38,000 yuan to conduct an environmental impact assessment. This alone is probably prohibitive for companies with an annual output value of less than one million yuan. After passing the environmental impact assessment stage, the industrial wastewater recycling, transportation and treatment charges are 12,000 yuan per year, excluding invoices, and it is said that the sewage treatment charges will double. Similarly, if you extrapolate to the textile printing and dyeing industry, this cost is certainly not low.
In addition, the trend of environmental protection rectification continues to ferment, which will definitely further increase the prices of raw materials, dyeing fees, etc., causing greater damage to the textile industry chain.
Disorderly competition in the market results in failure to get goods even if there are orders!
Since the fourth quarter of last year, the weaving market has recovered significantly, and some fabrics have been shipped smoothly. However, behind the hot market, there are also hidden worries. Some fabric traders said that what they fear most is not not having an order, but that they cannot get the goods even if they have an order! And there are people who can make it at any price!
Once they see market trends, such as the hot sales of certain fabrics, some companies will not hesitate to compete in a “capital preservation” posture in order to have business, seriously disrupting the market order. “The orders they receive at low prices may often be large orders. The market seems to be doing well when large quantities of goods are shipped, but sometimes it is only a small-scale monopoly by some companies. Not being able to get the goods is on the one hand, and on the other hand, If it is a short order or a small order, then we have no advantage in terms of price.”
After all, within a period of time, the number of customers with demand for these products is limited. If a group of manufacturers compete with these product manufacturers at low prices, the remaining companies will have no profit opportunities, and may even starve to death without receiving orders. If things go on like this, the market will be disrupted. It can be seen from this that what is more terrifying than “cost increase” is “low price competition”.
For fabric traders who are in the middle, it is difficult to follow the rise and even more difficult to follow the fall, so there is always a feeling of: “Why is it always me who gets hurt?”…
The price is not transparent, the production is unstable, and you can only bear the risk of finishing by yourself!
The finishing link is an important link in the deep processing of textile products, but the unstable factors in production have also deeply troubled textile enterprises. Taking printing and dyeing as an example, due to environmental protection regulations and other factors in recent years, printing and dyeing production capacity has been shrinking again and again, and there is an imbalance in the supporting structure of weaving production capacity.
Taking Shengze, an important textile cluster town, as an example. In 2016, the town’s weaving capacity was approximately 12 billion meters, while its matching printing and dyeing capacity was only 3 billion meters. The huge gap in production capacity makes the printing and dyeing industry occupy an absolute say in weaving. right. Of course, opaque quotations from dyeing factories and unstable production are also very common in surrounding places such as Keqiao.
According to some companies that mainly produce and sell finished colored fabrics, for example, if 10,000 meters of gray fabric is dyed in one color, no matter whether the output is 10,000 meters of cloth or 2,000 meters of cloth, or even if the printing and dyeing is broken, the printing and dyeing factory will have nothing to do with it. In any case, the dyeing fee needs to be paid. Then we have to bear the losses ourselves. In addition, the price of dyeing fees, paper tube prices, rolling prices, packaging prices… During the peak season, there are even prepayment of dyeing fees, expedited fees, etc. Just hearing about these fees is enough to confuse customers. Not to mention the lack of transparency in prices.
Editor’s Note: If the price increases, we can still breathe. So regarding the above-mentioned problems, textile companies may be even more at a loss what to do. If environmental remediation is not handled well, even if you can escape disaster now, the future will be doomed. Low-price competition steals other people’s orders, which actually cuts off one’s own path, and the order of the entire market will be disrupted. Production is unstable, you can only bear the risks yourself, and all you lose are real profits!
However, for textile companies, the pain does not stop there! In 2017, do it and cherish it…
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