Industry Is Fierce, Textile And Apparel Companies Are Struggling To Raise Prices

According to data released by the National Bureau of Statistics on the 11th, the ex-factory price of clothing in July rose by 2.4% year-on-year, which was significantly lower than the 10.0% increase in the ex-factory price of industrial products in China. Textile and garment enterprises in the interview with the "First Financial Daily" said that despite the sharp increase in production costs this year, due to the industry's fierce competition and market downturn and other factors, clothing is difficult to increase prices, profits are becoming thinner.

Adjust the digestive cost pressure

Zhu Sujun, assistant to the president of Ningbo Shanshan Co., Ltd., said in an interview with this reporter yesterday that due to factors such as raw materials, labor costs and the RMB exchange rate, the comprehensive cost of the company has increased by 10% to 15% this year, for some old customers. Difficult to raise prices, can only continue to develop new products and new markets to absorb cost pressures.

"Our export to the largest market, the United States has seen a sharp decline in orders this year. Some buyers have not accepted our price increase due to the impact of the subprime mortgage crisis, and have begun to transfer some low-priced orders to neighboring countries such as Vietnam and Indonesia," said Zhu Sujun. To, "Because of rising costs, we have no advantage in terms of price. Shanshan has increased its efforts to move to the mid-to-high end this year, basically abandoning low-end orders and continuously developing new products with high added value, such as through the 'hair lining process'. These high-tech suits are used to raise prices. These products are currently able to raise prices by more than 10% for the EU, Russia and other markets. Therefore, although the global export volume has declined, the overall export volume is basically the same as that of the same period last year. In the domestic market, Shanshan used to focus on the mid-end market. This year, it began to explore the high-end market, and domestic sales also increased to a certain extent."

Zhou Xiaonan, deputy general manager of Ningbo Dunhuang Import and Export Co., Ltd., said in an interview with this newspaper that since the raw materials of the yarn of the company are many by-products of petroleum, the cost of raw materials affected by oil prices has increased by about 30%, and the production process has been applied. Coal prices have doubled from last year, labor costs are also rising, and the appreciation of the renminbi, etc., the overall cost of the first half of this year has increased by about 8%, but only slightly increased by 3% for customers. Digested by itself, profits are getting thinner and thinner, and some orders have already lost money.

Zhang Yisheng, general manager of Guangdong Kaiping Yida Garment Co., Ltd. also said in an interview with this newspaper that the competition in China's textile and apparel industry is very fierce. It is very difficult to raise prices for customers or consumers. Once the price increase is too high, customers will immediately Orders are transferred to other factories in the country or neighboring countries, and most of the rising costs are still digested by itself. The company has not been easily replaced by other companies by adjusting its product mix and improving its technical content. On the other hand, it has moved half of its production line to Jiangxi this year to reduce costs.

"Overproduction" reduces the price increase of enterprises

According to a survey conducted by the China Garment Association on well-managed enterprises, the production cost of garment manufacturing enterprises increased by 15.16% on average in the first half of 2008, with labor costs rising by an average of 13.25% and raw material costs rising by an average of 8.89%. The transportation, monitoring, energy and other costs rose by an average of 7.34%, and the sales profit rate of the surveyed companies fell by an average of 2.31%.

Wang Qianjin, a senior analyst in the textile industry, said in an interview with the newspaper yesterday that although the production cost has risen sharply, the clothing consumption index CPI has been negative for the past year and has been squeezed down. Therefore, the factory price of clothing has only kept rising since the beginning of this year. %Amplitude. At present, clothing manufacturers have basically reached the limit of cost. In this case, they can only raise prices, or they will be eliminated.

According to the National Bureau of Statistics, in June this year, the national clothing price fell by 1.5% year-on-year. Among them, the price of clothing fell by 1.6%.

"It is very difficult to raise prices. At present, the competition in the industry is too fierce. There are more than 43,000 textile enterprises with sales income of more than 5 million yuan, and the number of textile enterprises below the scale is expected to be more than 400,000. China's textile and garment production is production. Too much demand. Coupled with the sluggish international clothing market this year, some products will return to the domestic market, which will intensify competition in the domestic market, so it is more difficult to raise prices than the international market.” Wang Qianjin believes.