Since the first quarter of 2022, the textile and apparel industry has been affected by complex factors such as poor logistics, shortages of raw materials and auxiliary materials, and shrinking orders. Some companies have encountered difficulties in production and operation. Reporters interviewed found that upstream and downstream companies in Zhejiang, Jiangsu and other places Cost pressure is high, and the proportion of production cuts has increased.
Faced with this situation, policy levels, industry associations and enterprises have worked together to coordinate epidemic prevention and production, and have developed some effective experience. Analysts believe that the gradual smoothing of logistics and transportation will greatly alleviate the market supply chain production difficulties caused by the shortage of raw materials in the textile and apparel industry, and promote the placement of midstream and downstream orders. From a medium- to long-term perspective, China’s industrial chain is complete and enterprises Improving competitiveness is a trend, and the industry is expected to return to steady growth.
Rising transportation and raw material costs
The apparel industry has always been a traditional advantageous industry in Linping District, Hangzhou City. There are more than 7,600 apparel companies, accounting for 80% of Hangzhou’s women’s clothing production capacity. The reporter learned that since the current epidemic, overseas imported raw materials have been stranded at ports, and raw and auxiliary materials for enterprises cannot be delivered in time. In addition, many places had closed some highway entrances and exits due to epidemic prevention and control in the early stage. , toll stations, and poor logistics have led to shortages of raw materials and rising transportation costs, which have also increased the procurement costs of textile companies. Small and medium-sized enterprises in the Linping District Textile and GarmentIndustrial Cluster face many aspects difficulty.
“Every enterprise is not a self-sufficient ‘island’. The asynchronous production of upstream and downstream enterprises in the industrial chain will affect the normal production of enterprises throughout the chain.” The relevant person in charge of the Economic Informatization and Science and Technology Bureau of Linping District, Hangzhou told Reporters, export-oriented companies such as Jiefeng Garment, Wangsheng Garment, Dongxing Garment, and Jiayi Garment reported that the company’s raw and auxiliary materials cannot be received in time, resulting in large inventory in the company’s supply chain, difficulty in stocking, and long stocking time. “Container prices and shipping costs have increased significantly.”
The reduction in order volume has disrupted the production plans of some companies and has also led to low employee attendance rates. Hangzhou Lihe Clothing Co., Ltd. said that the company is in a half-vacation and half-office state, and it is expected that the target performance completion rate this year will decline. The person in charge of a clothing company in Linping District also said that it is currently difficult to carry out normal business; “Expenses such as paying employee wages, purchasing raw and auxiliary materials, paying rent, and paying suppliers have only increased, and the cost pressure can be said to be Increasing daily.”
During the interview, the reporter found that some weaving factories, small and medium-sized yarn mills and weaving companies in Jiangsu and Zhejiang have increased production reductions and suspensions. Many textile companies have reported that many early orders were forced to be canceled and raw materials were not available. For large enterprises with upstream and downstream layouts, the current supply chain and market situation is hardly optimistic. The relevant person in charge of a large listed company engaged in the production of petrochemical and chemical fiber raw materials told reporters that the current price of raw and auxiliary materials has increased significantly. The downstream is affected by the international situation and the epidemic, and there are insufficient orders, resulting in a low start-up load of polyester. “Now traditional’ The peak seasons of gold, silver and silver have passed, but the inventory of polyester terminal textile fabrics is high, about 30% higher than in previous years.”
Government and enterprises work together to stabilize operations
The textile industry in Jiangsu and Zhejiang provinces accounts for about 40% of the country’s total. Faced with the impact of poor logistics of raw and auxiliary materials, rising costs and market obstruction during the epidemic, policy levels, industry associations and enterprises have worked together to coordinate epidemic prevention and production, and work together Stabilizing the industrial and supply chains and actively adapting to changes have resulted in some effective experience.
The person in charge of Zhejiang Hengyi Group said that in the face of the severe and complex epidemic prevention and control situation, it has guided its subsidiaries to formulate emergency plans in advance and strive to achieve “an overall unified game of chess and orderly response.” In terms of production operations, a weekly coordination meeting mechanism for production and marketing has been developed. Through timely communication, production and marketing parties select economically profitable production lines with low inventories for priority production, and at the same time flexibly allocate personnel. In terms of material allocation, a material dispatching and adjustment platform has been established. In the first quarter, a total of 779 items of machine parts and materials were transferred between subsidiaries, ensuring production stability to the greatest extent; at the same time, a temporary material transfer base was established to “when individual subsidiaries are closed due to the epidemic, When management, raw and auxiliary materials and finished products cannot enter and leave the factory, a temporary transfer base for raw and auxiliary materials will be established nearby to improve the efficiency of resumption of work and production.” said the person in charge.
The smooth flow of logistics transportation is an important prerequisite for achieving stable production. Zhejiang Hengyi Logistics, a subsidiary of Hengyi Group, has adopted point-to-point fixed transportation routes, carried out daily monitoring, and implemented centralized driver residence management and vehicle tracking for many times. Monitor and standardize disinfection, strengthen driver protection and other measures. The above-mentioned person in charge said in an interview with reporters: “At present, after the national and local governments have successively introduced measures to ensure smooth supply of logistics, Hengyi Logistics has basically resumed normal transportation. Although the transportation efficiency is still affected to a certain extent, the supply of raw materials to the production enterprises has not So nervous, all subsidiaries are ready to work at full capacity to steadily promote production.”
In order to realize the smooth logistics of textile and garment enterprises in the cluster as soon as possible, Hangzhou Linping District Economic Information and Science and Technology Bureau uses the industrial chain “one-click” transportation guarantee platform and the national unified pass to ensure the smooth flow of the enterprise industrial chain supply chain. Specifically� Encourage enterprises to apply for national passes, arrange for service specialists to review pass applications in a timely manner, and standardize the use of national passes at transportation entrances and exits to ensure the rapid release of vehicles transporting important production materials. So far, the bureau has reviewed and issued 416 national unified passes, including 173 freight passes for textile and garment enterprises, ensuring the transportation of non-woven fabrics, Clothing fabrics, protective clothing accessories and other key production materials and epidemic prevention materials exceeded 3,000 tons.
At the same time, actively playing the role of industry associations can effectively help enterprises resume normal production and operations. Linping Home Textile Industry Association, together with China Sinosure and banking institutions, provides risk warnings to enterprises and provides guidance to enterprises in product development, market research, customer service and other aspects. In June this year, Zhongwang Fabric Co., Ltd.’s 140,000-square-meter smart factory with an annual output of 15 million meters of high-end decorative fabrics will be put into operation. The 34,000-square-meter modern home textile design and R&D center of Hangzhou Aike Home Textile Co., Ltd. will be put into operation.
In addition, informatization plays a more prominent role in ensuring smooth traffic. The relevant person in charge of Jiangsu Shenghong Group told reporters that through the self-built “Hongyun” industrial Internet platform, the production, sales, storage, consumption of each material, as well as equipment efficiency and energy consumption can be tracked online and systematically, and the production process can be controlled; industry industry The chain collaboration platform connects suppliers, producers, distributors, and customers to realize production, supply and marketing online, and uses information technology to ensure the stability of enterprise production and operations during the epidemic. As of the end of April this year, the cumulative acrylonitrile export volume of Sierbon Petrochemical, a subsidiary of Shenghong Group, had increased by 41% year-on-year. A year-on-year increase of 47%.
Support policies need to be implemented
Recently, a series of policy measures have been introduced intensively. On May 9, the Office of the Leading Group of the State Council to Promote the Development of Small and Medium-sized Enterprises issued the “Several Measures to Strengthen Assistance to Small, Medium and Micro Enterprises to Relieve Difficulties”, which include increasing financial support, easing financing difficulties and repayment difficulties, reducing costs and expanding demand, and strengthening Some practical and hard measures have been introduced in terms of service guarantee and other dimensions.
At the State Council’s regular policy briefing held on May 18, Xu Xiaolan, Vice Minister of the Ministry of Industry and Information Technology, said that the next step is to solve the “stuck points” in the policy implementation process. The most important thing is the “stuck points” in the policy implementation. The last mile”. Liang Zhifeng, director of the Small and Medium Enterprises Bureau of the Ministry of Industry and Information Technology, said that policies will be pushed forward accurately, policy interpretation and consultation will be carried out extensively, and the implementation of enterprise-friendly policies will be promoted, so that small and medium-sized enterprises can enjoy all the benefits.
In order to consolidate and expand the effectiveness of the work to ensure smooth logistics, the Ministry of Transport proposed to continue to carry out self-examination and self-correction of closed highway service areas, toll stations, ports and terminals to ensure that “openings should be opened”. We will implement the pass system and nucleic acid testing “pick up, go and chase” system, resolutely clean up the layer-by-layer increase in traffic control and “one size fits all”, and ensure the smooth transportation of various key materials.
Analysts believe that a package of bailout and assistance policies will provide support for the development of the textile and apparel industry in the next stage. In general, the gradual smoothing of logistics and transportation will greatly alleviate the market supply chain production difficulties caused by the shortage of raw materials in the textile and apparel industry, and promote the placement of midstream and downstream orders.
Guo Bin, an analyst at Pacific Securities, believes that on the manufacturing side, improving the competitiveness of Chinese supply chain companies is a trend in the long term. From a mid- to long-term perspective, the industry is expected to return to steady growth and wait for opportunities for demand recovery in the second quarter.
The Guotai Junan textile and apparel research team recently released a research report stating that the impact of the epidemic is expected to gradually weaken. Looking forward to May and June, clothing retail sales are expected to gradually improve. In the future, as store operations, logistics and transportation and other links return to normal in an orderly manner, clothing terminal retail sales are expected to The situation will also improve.
In view of the practical difficulties encountered by the textile and garment industry, as well as the challenges that may be faced in post-epidemic recovery, some companies have called for the next step to make local policies more transparent and eliminate epidemic prevention measures under the premise of strictly implementing normalized epidemic prevention and control measures. We urge the government to continue to provide corresponding support policies and implement them due to issues such as “each working in their own way” and layer upon layer overloading.
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