Apparel / Textiles & Accessories

Home > News > Apparel / Textiles & Accessories

The order is exploded, but the textile factory is not making money! Netizens comment: vicious compet

2021-10-25

[Foreword] "Our profit dropped by 50% when our revenue was flat." The head of overseas business of a Zhejiang company exclaimed during the 130th Canton Fair. "

Foreign trade companies have received an explosion of orders, but they all say they can’t make money.

"Our profit dropped by 50% when our revenue was flat." The head of overseas business of a company in Zhejiang sighed during the 130th Canton Fair.

Under the influence of the complicated external environment and the black swan of the epidemic, foreign trade companies seem to be on a roller coaster, and the urgent problem before them is "large orders and low profits".

Skyrocketing costs

"From September last year to February and March this year, the raw materials of our category increased by about 25%, and it is still rising." Li Fan, deputy general manager of the overseas business department of Xingxing Cold Chain, told a reporter from China Business News.

Approximately 51% of the companies surveyed said that their export profit margins had fallen year-on-year, 33.3% of the companies said their profit margins were basically the same as the same period last year, and only 10.6% of the companies said their profit margins had increased.

Among them, in the household appliances, tools, auto parts, and the lighting industry where the cost of raw materials is relatively high, the decline in corporate profit margins is more obvious.

In addition, affected by the appreciation of the renminbi exchange rate, skyrocketing ocean freight, and short-term electricity policies, the overall cost of export companies has risen significantly, and profit margins have dropped again and again.

"Take a 25% increase in raw material costs as an example, while the renminbi has appreciated by 8 points, so that, cumulatively, the company will have to increase prices by at least 30% in order to be similar to the original profit level." The person in charge of a foreign trade company in Zhejiang calculated an account. .

Do not make money? Raw materials and labor costs are rising

"The factory seems to be very prosperous. The problem is not making money." Liu Long told a reporter from China Economic Weekly. Last year, the price of products sold for 200 yuan was increased to 300 yuan this year, but the factory still did not make money. "Many customers We placed an order in December last year and we were forced to charge back the order ourselves in March of this year. The price of raw materials rose, and the order was refunded; the shipping cost rose, and the order was refunded."

Many apparel companies also do not make money. Mao Yihua introduced that some enterprises in Ningbo export knitted garments, and the average profit of a piece of clothing "may be less than one dollar."

Xie Longfa, a garment processing worker in Yudu County, Ganzhou City, Jiangxi Province, said that the factory’s profit is very thin. It ships about 500,000 pieces of clothes a year. Less than a dollar".

According to data from the National Bureau of Statistics, in the first half of the year, 33,000 textile enterprises above designated size across the country realized a cumulative operating income of 2343.49 billion yuan, a total profit of 107.89 billion yuan, and a profit margin of 4.6%.

Liu Long said that because of the increase in the price of raw materials and freight, the company took orders and returned orders again and again. Although customers could understand, they would also think that the company was not sincere enough. He is very worried that after the epidemic has passed, if customers can find other sources of goods, business will not be so good. He also revealed that starting from 2020, the scale of the enterprise has been shrinking, and the number of workers has been reduced by one third.

Orders for diesel generator manufacturers are full under the "power curtailment tide"

Affected by multiple factors such as the tight power supply and dual control of energy consumption, the phenomenon of "switching power cuts" has occurred one after another in many places across the country. In order to rush production, some companies have chosen to snap up diesel generators to ensure power supply.

"Almost after the power rationing occurred, orders began to increase. Guangdong, Jiangsu, and Zhejiang provinces have all received orders. The current orders are about 200 units, some have not been accepted, and too many." The Yangzhou area mentioned above The staff of the generator manufacturer told reporters.

"Usually delivery is normal for about a week, and now it takes almost 20 days." A sales manager of a generator manufacturer in Taizhou told reporters, "No matter which product is available, it is relatively short, because there are only a few branded engines. "

“Generator sets are more for emergency purposes. For example, a company has come to a large order to deliver on time without default. But if generators are used to generate electricity, the cost is still relatively high. After all, the electricity price is relatively cheap. "Some employees in the internal combustion engine industry revealed in an interview with reporters.

A number of interviewed companies stated that the company has increased its investment in R&D and innovation, promoted innovation in all aspects of raw materials, technology, products, and markets, and strived to increase the competitiveness of the industrial chain supply chain while strivi


DISCLAIMER: All information provided by HMEonline is for reference only. None of these views represents the position of HMEonline, and HMEonline makes no guarantee or commitment to it. If you find any works that infringe your intellectual property rights in the article, please contact us and we will modify or delete them in time.
© 2022 Company, Inc. All rights reserved.
WhatsApp