In the process of visiting the market recently, many cloth bosses reported to the author that the recent market conditions are really bad. Conventional products such as pongee and polyester taffeta have returned to their original state. “Ragged cloth”, no matter what specifications it is, is basically not easy to sell.
“No orders, full inventory!” has become the most realistic portrayal of cloth bosses recently.
Supply exceeds demand, but the startup rate remains high
Cloth cloth bosses also know that in addition to the gradual weakening of demand and the impact of Sino-US trade war and other factors, the most important thing is that peripheral production capacity has been put into production significantly since last year, resulting in an oversupply of conventional products in the market.
Then the problem is, the market conditions are so bad, a lot of conventional products are overstocked, and they cannot be sold even if they are produced. Even if they are sold, they will be sold at a loss, but on the other hand, On the one hand, according to data monitoring from China Silk City Network, the current operating rate of water-jet looms is still as high as 87%, which has not declined significantly from the previous period and is still at a high level.
Since the market is so bad, why can’t the operating rate drop? For this reason, the author asked some bosses of weaving companies and summarized the following reasons.
Why does the boot rate remain high?
It is expensive to recruit workers, but it is more difficult to recruit workers
Every year, there will be many The weaving boss complained that workers’ wages have increased again this year, and even though wages have increased, they still can’t find enough people to recruit.
After waiting for more than half a month, the workers were finally recruited, the machines were finally started, and the business of the year was gradually on track.
However, as the market began to gradually deteriorate in mid-April, there were fewer and fewer orders on the market and more and more inventory. The idea of shutting down is not out of the question, but once the machine is shut down, all the workers have finished their work. Once the market improves and they want to restart the machine, can it still be started?
Recruiting workers is so difficult now. Recruiting workers at the beginning of every year is like a war. Are you willing to just let go of the workers you finally recruited?
Thinking about it this way, let’s continue to turn on the computer. At least the workers are still there.
Factory investment, capital turnover Yali Shanda
For business owners, setting up a factory is definitely a big investment.
Whether it is the cost of conventional factories, machines, labor, water and electricity, or the increasingly expensive costs of environmental protection and indicators, they are all weighing on Boss Bu’s head like mountains. superior.
A weaving factory requires an investment ranging from several million to tens of millions, and most of them require certain channels of financing.
But now the financial pressure is so great. The cloth in stock cannot be sold, which has caused difficulties in capital turnover. If the company suddenly stops production at this time, and the bank thinks that your stoppage of production is due to poor production and management, and therefore calls for the loan, it will definitely make the already fragile capital chain worse.
What should we do? We can only bite the bullet and continue to work and produce some conventional products with relatively large market demand. There will be more conventional products on the market, and the cloth will be even less sold.
Tangled: What if the market improves?
Of course, there are also reasons for Boss Bu’s own mentality.
The current market situation is that the supply of conventional products exceeds demand and the market cannot digest it, which ultimately leads to high inventories of weaving enterprises and great financial pressure.
Because of the difficulty in recruiting workers mentioned above, once a company suspends production, it is impossible to resume production quickly. The demand for conventional products on the market is actually still very large, but the production capacity of water-jet looms has expanded too fast in the past two years, exceeding actual demand.
Once some companies suspend production and the supply and demand situation of conventional products on the market is reversed, the speed of inventory clearance will not actually be very slow.
But if production is stopped, even if the market will improve, there will be nothing wrong with them.
Ceasing production is a decision that requires “a strong man to cut off his wrist”. If it were not that he couldn’t survive, there would be no decision. Weaving companies want to stop production. Unfortunately, judging from what we know so far, many weaving companies have revealed the idea of reducing their operating rates or even suspending production in the future. I hope the bosses can survive this downturn. </p
