Bankruptcy Countdown? The Tragedy Of Coastal Small Garment Factories

Not long ago, media reports reported that the small and medium-sized garment processing factories on the coast had entered the "countdown". Insiders estimate that 30% of the small and medium-sized garment factories will go bankrupt this year.

According to the report, small and medium-sized costumes in coastal areas are mentioned. Processing factory The main reasons for the closure are cost pressures, transfer orders and other factors. In this regard, recently, the reporter visited the clothing processing plant in Dongguan, Guangzhou, to understand the operation of small and medium-sized garment processing plants.

Dongguan Tai Fu Garments Co., Ltd. has 1800 employees. From the environment and scale of the office area and production workshop, it is a strong enterprise. However, Zheng Wenbiao, chairman of Dongguan Tai Fu Garments Co., Ltd., told reporters in China news that this year's business situation is more severe than the financial crisis.

Tai Fu is a clothing generation. Processing enterprise The products are mainly exported to Japan and Europe. The financial crisis in 2008 was the worst hit area in the United States, so the operation of Tai Fu was not greatly affected. By 2010, Tai Fu's business had also greatly improved due to the large replenishment of international buyers. By this year, the pressure of external market and the continuous rising of domestic production cost have brought a lot of trouble to the operation of Tai Fu.

The first is the slump of the international market. In March this year, the Japanese earthquake broke out, and the EU was deeply in debt crisis. This was a big blow for the products exported to Tai Fu, Japan and Europe, and the US economy has not yet climbed from the bottom of the valley, which eventually led to the shrinking of orders in the second half of the three largest export markets of Tai Fu. According to Liang Guohong, executive manager of Tai Fu Garments Co. Ltd., the order volume decreased by 5% in the first half of this year compared with the same period last year. In the second half of the year, the situation is still not optimistic, and it is expected to shrink by 20%.

Relative to the changes in the international market, the soaring domestic production cost is more difficult. The first cost of production is the soaring price of raw materials. Take cotton as an example, the price of cotton was 14873 yuan / ton at the end of 12 in 2009, and by March 2011, the price of cotton exceeded 34 thousand yuan / ton mark. Although cotton prices have declined in recent months, there has been a big increase compared with 2009. The rise of raw materials is a double pressure for export oriented garment processing enterprises. On the one hand, it takes a lot of money to buy raw materials, and it is difficult to buy enough raw materials. On the other hand, due to the increase of domestic raw material costs, the corresponding processing prices will also rise, which will lead foreign orders to many Southeast Asian countries, such as Vietnam, Bangladesh and other countries with relatively low raw material prices. As a result, domestic enterprises will lose many orders.

Another factor that affects production costs is Labor cost Ascension. It is understood that, according to the requirements of the Dongguan municipal government, the minimum wage of Tai Fu increases at an annual rate of 20%. This year, the wages of general workers have generally reached 2200 yuan to 2300 yuan, even though such salaries are still very difficult to recruit. The number of general workers is 10% less than that of last year.

"In the first half of this year, Tai Fu almost didn't make any profit. Although we have raised the price of terminal products slightly, it is far behind the pace of cost increase. Zheng Wenbiao said.

Through the conversation with Zheng Wenbiao and Liang Guohong, the general operation situation of small and medium-sized garment enterprises is understood. Although the situation of each enterprise is different, Tai Fu may not be typical, but the cost pressure of raw materials and labor is believed to be a problem faced by every enterprise. Will there be 30% of the small and medium-sized textile and garment factories closed down in the report?

In fact, such a conclusion will have a negative impact on the operation of these enterprises, but enterprises also have to face the real problems. How to overcome the pressure and reverse the difficulties is an unavoidable and urgent solution for small and medium-sized garment processing enterprises.