The new fiber breaks the spinning enterprise's dilemma

The large fluctuations in the price of cotton in Hengfeng's textile workshop eventually triggered a major shock in the cotton spinning industry. In particular, small and medium-sized enterprises have been deeply affected, and business operations have been hampered. Some companies have already stopped production and restricted production, and the operating rate of large enterprises is generally insufficient. Against this background, some textile enterprises in Ling County made great contributions to the new fiber textile industry by taking the first step of self-adjustment.

Lingxian textile enterprises have no crisis

On June 3, the reporter ate a closed door in Lingxian Shengze Textile Co., Ltd. Contacting the deputy general manager in advance, Gu Yuande, was busy in the workshop. “Wait a minute, I will immediately meet you at the door.” Ten minutes later, we met Gu Yuan who had come over from the workshop. De: "I just received a few orders and I'm working overtime."

"Overtime production" this year is a matter that many textile companies do not dare to expect. Since the beginning of the year, the price of cotton has been falling all the way, no one is interested in Cotton Yarn, and the inventory of many textile companies has continuously increased, and it has encountered a rare “winter” in history. In particular, many small and medium-sized textile companies have already stopped production and restricted production.

“Our efficiency this year has not been substantially affected by the market environment. The benefits in the first quarter were even much better than the same period last year.” Gu Yuande told us that now, Shengze’s inventory is only over 300 tons, “equivalent to us for two weeks. The output is at normal levels."

Not only Shengze, but a batch of textile enterprises such as Lingxian, Hengfeng, Fuhua, Baoding, and so on, under the backdrop of the depressed economy of the entire industry, the efficiency has steadily increased, and the momentum of steady development has been maintained. With a total of 150,000 spindles, Hengfeng Textiles Co., Ltd. has been producing at full capacity. The current inventory is only 500 tons, equivalent to the company's production for more than 10 days. And these companies can withstand the test of the market storm, without exception, are the new fiber. According to the data provided by the relevant departments of Ling County, at present, the county already has more than 30 new-type fiber textile enterprises above designated size, with a production capacity of 1.2 million spindles, and the production capacity accounts for 30% of the same industry in the country. The new fiber textiles have reached more than 30 species. More than 500 varieties of the series cover more than 90% of the varieties on the market. Relying on a variety of product varieties, differentiation, and new product mix, Lingxian's new fiber textile companies have been able to stand alone in this year's textile industry.

Use less cotton to make more money

The ups and downs of cotton prices are the culprit for the development of the textile industry.

“Last year, traditional cotton spinning companies made a big fortune, but they all made cotton money.” Gu Yuande, who has fought for nearly 20 years in the textile industry, is aware of many “gateways” in the industry. In his view, the process of soaring prices experienced by cotton in the second half of last year has caused many cotton textile companies to lose their sense of rationality. “Buying a car to make money on the back of a cotton car doesn’t have to worry about how to develop new products and how to improve management. ."

Zhou Quanbao, head of the New Product Development and Sales Division of Lingfeng Hengfeng Textile Co., Ltd., shares his views with Gu Yuande. “Actually, the profit margin of the traditional cotton spinning industry is already very low. The industry averages only about 4-5%. Many moderately and moderately-managed textile enterprises are as low as 1%.” He believes that there are numerous small and medium-sized cotton spinning companies. Low product quality, similar product structure, and production of technical products are no major road, simply can not tell what market competitiveness. As a result of the adjustment of the entire industry, cotton yarn prices have been falling all the way, and cotton spinning companies will inevitably pay for last year's Khmer price.

For new fiber textile companies such as Hengfeng and Shengze, cotton is not their most important raw material for production. The impact of cotton price fluctuations on corporate profits is basically negligible. “Cotton now accounts for only about 25% of our raw materials for production.” Gu Yuande’s figures are confirmed by Zhou Quanbao. In Hengfeng, cotton accounts for less than 30% of all raw materials.

The fluctuation of cotton prices has almost become the norm. Only by using less cotton and reliance on cotton can the business operations be less affected by the fluctuation of cotton prices. The company that first recognized this problem was Lingding Baoding Textile Co., Ltd. In 2008, the economic crisis made the traditional textile industry face an unfavorable situation of internal and external difficulties. Baoding invested 1.3 million yuan to build a new product R&D line, and developed more than 20 new types of fibers such as bamboo fiber and milk fiber. The profit per ton of yarn is generally cotton. More than 3 times the yarn. In the severe cold in 2008, Baoding Textile's annual sales revenue actually rose by 36%, and it was called “Bao Ding phenomenon” by the industry. For a time, numerous textile companies in Lingxian suddenly realized that they had turned their attention to the new fiber industry. The county party committee and the county government took advantage of the situation to lead the new fiber industry to become an embarrassing situation in Ling County.

The reduction in the use of cotton reduces the negative effect of fluctuations in cotton prices on business operations. The high added value of new fiber products also enhances the market competitiveness of enterprises. “At present, the average profit rate of new fiber products is more than 10%, which is 1 to 2 times that of pure cotton products.” Zhou Quanbao said that new fiber companies attach great importance to the development of new products, like Hengfeng, almost every month. The new products are off the assembly line. The new products independently developed by these companies have achieved the goal of no one else, formed a differentiated competition in the market, improved the market competitiveness of enterprises, and ensured the higher profitability of the company. The copper ammonium fiber products they developed are currently only able to produce in China.

The transformation of traditional cotton spinning companies is not easy

This year, unprecedented market difficulties have forced many textile companies in our city to begin to attach importance to the upgrading of products and enhance their competitiveness. Various levels at all levels have also put the development of new fiber textile industry on the agenda as a guide to the transformation and upgrading of traditional cotton spinning enterprises.

“For traditional cotton spinning companies, there is still a long way to go before entering the new fiber textile industry.” Gu Yuande pointed out that the new fiber industry has a relatively high industry threshold, and ordinary small and medium-sized cotton spinning enterprises do not have The ability to switch to new fiber in a short period of time. Once the cotton spinning market shows signs of improvement, the vast majority of SMEs will continue to stick to the traditional cotton spinning industry driven by interests.

For small and medium-sized textile companies, the first obstacle to entering the new fiber industry is the poor supply of raw materials. “We are now a member company of the Austrian Lansing Company's Modal Alliance,” said Gu Yuande. The Austrian Lancôme Corporation is currently the world’s largest modal fiber producer. The company has adopted a strict access system for downstream textile companies from the production facilities. To corporate management, we must conduct rigorous inspections, and only companies that they approve can become their members. And if you want to buy modal fiber directly from the market, the price will be much higher.

Not only does Austrian Lansing Company, including domestic new fiber manufacturers, consider maintaining the reputation of products and maintaining market stability, most of them adopt a membership-based sales model for downstream companies such as textiles. Several new fiber textile enterprises in Lingxian County joined the “Tianzhu Fiber Industry Alliance” and “Newdale Industrial Alliance” to obtain a stable supply of raw materials. To join these alliances, traditional textile companies must reform all aspects of production equipment, production processes, etc., and need to face great pressure on capital investment.

The level of enterprise management and the quality of employees are considered to be the biggest obstacles for SMEs to enter the new fiber industry. “The characteristics of new fiber textile products are multiple varieties and small batches,” said He Yinghua, deputy general manager of production at Lingfeng Textile Co., Ltd. in Lingxian County, told reporters that at present, there are more than 40 kinds of machine products in their enterprises and the order received is the smallest one. Only 20 kilograms, the machine will produce a few minutes. Frequent replacement of production varieties places very high demands on workshop management. The traditionally extensive management of small and medium-sized cotton spinning enterprises is difficult to adapt.