The beginning of 2020 was disrupted by the sudden epidemic, and the “good start” that textile people had been waiting for seemed to have become a “miracle in the mirror”:
At the beginning, we did not expect that the next situation would be so bad. We thought that the few orders left before the year could be delivered as scheduled!
We mainly produce imitation silk products, which are used in various fashion fabrics. One month before the holiday, we received a lot of imitation silk orders, which exceeded the sales volume in the previous two months. I thought that after the start of the new year, the market would recover and orders that were not negotiated before the year could be signed. Who knows, an epidemic will disrupt all plans!
The last large container in 2019 was installed on the 26th of the year, and it was initially agreed with the customer that the next order would be delivered at the end of February. Recently, I go to the dyeing factory for a walk every day. I see that no one is allowed to enter the workshop, and there are security guards at the door preventing the raw materials from entering. I am also very anxious, but I can only wait!
On February 21st, the company started construction! Fortunately, I received an order for high-elastic pongee, which is a good sign!
(Voices from four textile bosses in Jiangsu and Zhejiang)
With With the orderly resumption of textile markets in various places, cloth bosses also expressed different voices! Sometimes we can only lament that “plans cannot keep up with changes.” No one expected that this year’s epidemic would delay the resumption of work in the entire textile industry, making it impossible for non-local employees who went home to visit relatives for the New Year to start work on time, and also made the originally confusing 2020 even more complicated. It’s cast a shadow!
According to the reports of enterprises, the main problems currently faced by enterprises are mainly concentrated in several factors such as the unavailability of employees, obstruction of logistics and transportation, and uncertainty of enterprise orders. Therefore, for the problems that will be encountered after the start of construction, A series of questions:
When will the staff be available? Should we give employees a salary increase? Do you want to stock up on raw materials at low prices?
When will the staff be available?
As for the resumption of work, as major cluster markets have gradually resumed operations, most textile companies are finally looking forward to starting work. The textile bosses did not feel too happy about this late start of work. “Our trade department started work on February 21, and the factory is preparing for tomorrow. Only half of the workers have arrived now. It is estimated that 50% of the machines will not be fully operational!” said Boss Shen from the Wujiang area. Mr. Chen from the Shaoxing area also said that the factory has started operations in the past few days, but not many people have arrived. Some workers from other places are still quarantined at home, so the operating rate is not very high.
For weaving companies, the employee arrival rate is approximately equal to the company’s startup rate, which is also a restriction for current companies The most important factor in resuming work. Fortunately, local governments are relaxing the standards for return trips by non-locals. Therefore, as long as they are not from areas with severe epidemics, most migrant workers are on their way back. Some governments have also launched chartered cars to welcome employees in some key areas to return to work, allowing them to return to work. Enterprises are better able to restore production capacity.
“Probably by the end of February or early March, the operating rate of our factory will be restored to 80%, and by early March, it is expected to be at full production.” said a manager Wang from Wujiang area . Another textile boss who has not yet started work said that he is ready to wait until the number of employees returning to work is higher before starting work. It is expected that the start of work will be postponed for about a week.
It is understood that judging from the opening of Shengze, the largest professional market in the country, the resumption rate of market operators has reached 80%. Many textile bosses believe that work can be fully resumed by the end of February. When the market resumes, the employees in the factory will basically be in place, and the workshop will return to its usual “rumbling” and busy scene.
Do you want a salary increase?
As a labor-intensive industry, the textile industry has always been a major expense for bosses. As companies resume work, the annual battle to grab people is about to take place! Many textile companies offer various welfare policies such as high salaries, accommodation, five insurances and one housing fund, and physical examinations to attract workers. Whether it is technical workers, management talents, or business elites, they are all what textile companies are looking for.
A question that troubles textile bosses is this. With this year’s market conditions, is it easy to recruit workers? Do you want a salary increase?
Looking back at 2019, the average monthly salary of workers in southern Jiangsu has risen to about 8,000 yuan. However, affected by the economic development in the central and western regions, the number of non-local workers is decreasing, and the aging of local workers is obvious. This has led to the common phenomenon of “difficulty in recruiting workers”. This year, due to the impact of the epidemic, many migrant workers from other places are unable to report to work smoothly, resulting in an imbalance between manpower supply and demand, and labor problems will become more prominent in the short term.
“We are also waiting and watching recently. Now all local employees are on duty, and 40% of non-local employees are here. The machines are not running much. There is definitely a shortage of workers, but this year the pressure is generally greater. “It’s hard to say whether wages will be increased or not. We’ll have to wait and see first,” said Mr. Chen, a textile boss.
For �For weaving bosses, business development in the first half of this year is more stressful than last year. If workers’ wages continue to be raised due to lack of work, it will lead to greater cost pressure, so a wait-and-see mentality dominates at this stage. “It depends on whether others are going up. If everyone is going up, it can only go up. Construction has just started and the market is not clear yet!” Mr. Shen said.
Do you want to buy raw materials?
The epidemic has caused the cash flow of most companies to stagnate and the production chain to break. For many companies, the most important thing to survive is: cash, still cash!
In conversations with some bosses, over 80% of companies said that compared with risky speculative operations, they still value step-by-step procedures and do not dare to lend more credit or take more money. To buy raw materials, this has also led to the fact that even though factories have gradually resumed production recently, there have not been many purchases of raw materials. According to the monitoring survey of China Silk City Network, the production and sales of polyester filament in Jiangsu and Zhejiang are between 10% and 30%, which is lower than the same period in previous years.
“After starting work, we received some new orders, but this year’s order volume is not as expected. We will not stock up on raw materials and purchase according to the orders.” said Mr. Yang, who produces imitation silk. , “Although logistics outside the province has not recovered much, major manufacturers such as Hengli and Shenghong have their own logistics teams, so we are not afraid of shortage of raw materials.”
In addition, for raw materials For manufacturers, the biggest “stumbling block” to the improvement of their production and sales is that the load of downstream manufacturers is still at a low level, so the demand for raw materials is difficult to improve.
A market participant also said that the recovery of downstream production capacity is currently slow, and manufacturers basically have sufficient capacity before the holidays. Stocking up for more than half a month, that is, before early March, the rigid demand for raw materials is relatively weak. It is estimated that unless the demand of weaving manufacturers recovers better and the inventory is smoothly removed, textile bosses will be stimulated to purchase raw materials.
No matter what, the current textile bosses still face two major battles: defeating the new coronavirus epidemic and making up their minds to resume work. After all, if there is no production, many companies will wait for raw materials from China to reproduce, and many companies are rushing to deliver orders to reduce the possibility of losing foreign trade orders.
Generally speaking, there is hope when work resumes, and the demand for accounts will recover. I believe that when spring comes, the textile market bids farewell to the cold winter!
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