How Does Shandong Cotton Deal With Overcapacity In The Textile Industry?

The "ST cotton" is the largest in the country.

One of them was once regarded as the industry window by many peers.

Today, this enterprise can not get rid of the fate of traditional cotton textile enterprises bottoms up.

ST de cotton made a prediction on the performance of the first half of the year. It is estimated that the loss in the first half of this year will be 8 million ~1200 yuan.

The company lost 8 million 650 thousand in the first quarter.

Last year's loss was 98 million 940 thousand.

Zhu Jiang, Secretary of the board of ST cotton, told this newspaper that the cotton textile industry had a decline in profits, so it was difficult to operate, and the cost was not controlled or even controlled by the state, which was greatly affected by the world economy.

Recently, influenced by cheap imported cotton abroad, dealers have strong bargaining power, and the difficulty of enterprise loans is increasing.

Guarantee Circle

Cotton textile industry has been affected in recent years.

The impact of the sharp rise has been bumping ahead.

This year's survival is even more difficult than before.

As a very large amount of capital, loans have become a hard nut to crack in this industry.

Yang Hongwen, director of textile industry in Dezhou, Shandong, told the newspaper that the sources of funds for cotton processing and textile enterprises are mainly in three ways. The proportion of bank loans is relatively large.

"Bank loans now have a higher threshold, the cotton textile industry downturn, banks will not fill holes.

In order to obtain loans, cotton textile enterprises must find strong enterprises to guarantee them.

In this way, in the cotton textile industry of Dezhou, you guarantee me, I guarantee you, the guarantee circle that you have given him guarantees is formed.

The enterprises in the guarantee circle are generally familiar with local enterprises. "

Yang Hongwen said.

The guaranty for ST cotton is Dezhou's more powerful Dezhou Tianma cereals and Oils Group and Dezhou Jinghua group.

Tianma cereals and oils is a large joint-stock enterprise group which integrates grain storage, purchase and sale, processing, logistics services and real estate development.

The registered capital of the company is 90 million yuan and about 2000000 tons of grain and oil are being operated annually.

And Jinghua group is one of 200 key industrial enterprises in Shandong Province, with annual sales revenue of about 4 billion yuan.

Zhu Jiang said that mutual protection (mutual guarantee) was carried out between de cotton and Jinghua group and Tianma cereals and oils.

These three companies are relatively strong in Dezhou.

It is reported that mutual guarantee between enterprises is a common phenomenon in Dezhou.

Ma Junkai, Deputy Secretary General of Dezhou Cotton Association, told this newspaper that mutual guarantee is not only in Dezhou but also in the whole country.

Enterprises need loans, banks do not give loans, it is necessary to find two powerful enterprises, guarantee, can pass the loan.

This is what banks require for corporate loans.

But the risk is also known to the enterprise, but also helpless.

Mutual guarantees are also a way to solve loans when they are not being recognized by banks.

The loan quota can be relaxed.

Ensure capital needs. "

Zhu Jiang said, although mutual financing is convenient, there are also great risks.

Companies are also very cautious when choosing cooperative ventures.

The mutual insurance contract is one sign each year. "

Ma Junkai said that in the security circle between enterprises, if any of the companies collapsed, it would lead to a lot of companies involved, and the banks had an understanding of it.

Yang Hongwen said that enterprises' financial constraints and mutual guarantees have reduced the risk of banks, but increased the risk of local economy.

If an enterprise fails, it will affect a series of businesses.

If it is clear at the bottom, the bottom is not clear. Mutual guarantee is unwise and risky.

The head of a cotton textile enterprise in Dezhou said that ST cotton was a large textile enterprise in Dezhou. Although the loss is serious and the survival is very difficult, the local government will not let it go bankrupt.

If the big enterprises such as de cotton fail, the social effects will be too great.

So the government will find ways to help them survive.

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Valley bottom

Cotton textile industry upstream and downstream this year are in an abnormal downturn, the days are more sad than last year.

Tianhong cotton processing plant in Xiajin County, Dezhou, Shandong, after the Spring Festival, only took a batch of goods.

It has been in a state of shutdown.

Director Xia Hangyang said that the factory was still working at this time last year.

The market is not as good as last year.

Although the cotton in Hebei has reached 3.1 yuan per catty, although the cotton farmers are already losing money, they are afraid to accept it because the price is not profitable.

You can only lose money when you work.

Xia Hangyang said that somehow he made some money early last year, and had to preserve this victory.

If we are still working now, it will probably be too early to compensate for such high labor costs, rising electricity charges and bad market conditions.

So wait for the September new cotton market, look at the market again.

At present, the factory workers are at home to farm or do small businesses.

ST de cotton is not so lucky.

As a large cotton textile enterprise, Germany cotton can only limit production, but it can not stop production.

Once workers go home on holiday, problems will emerge.

Yang Hongwen said, cotton textile enterprises currently practice, the general measure is three classes to change two classes, limit production, to inventory.

This year's high inventory is not reflected in the high storage of raw materials for cotton, but this year is a large inventory of finished products.

Inventory of finished products is at least 15% or even higher than that of the same period last year.

Guo Jin securities (600109, stock bar) analyst Zhang Bin has a judgement on excess capacity, he said that domestic capacity is overcapacity.

The original capacity surplus is only 20%~30%, and the current surplus level has reached 40%~60%.

The textile industry is at the bottom of the valley.

The main reason for the slow recovery is too much demand.

An insider told this newspaper that ST de cotton was dragged down by bad assets and suffered serious losses. It had once proposed bankruptcy, but the local government did not allow it.

Not only because it is a local listed company, but also because bankruptcy will lead to the layoffs of more than 1400 employees and the local economic security in Dezhou.

Zhu Jiang told reporters that de mien is also looking for development path.

With the support of local governments, the company reorganized it last year, replacing the bad assets. Besides, the company is beginning to extend the industrial chain and do some sideline businesses such as coal trade.

Last December, 1, de cotton and the fifth quarter industrial and German cotton group signed the asset replacement agreement, replacing the more serious loss assets with the listed companies, replacing Zibo JJC trading company and Shandong fifth quarter Trading Co., Ltd.

After the completion of asset replacement, although the company's business is still textile related industries, business scope has increased the coal trade business and property leasing.

The company hopes to change the continuous loss of main business of listed companies through asset restructuring.

After the reorganization, the company launched the 2012 annual non-public offering of A shares in May this year, and plans to raise 530 million yuan for the home textile production base project and the home textile sales channel construction project.

Zhu Jiang said that under the macroeconomic downturn, even if there are not many opportunities in the cotton textile industry, the company will start from the perspective of survival and development, and will find ways to make profits.

Recently launched through non-public offering of shares to raise funds, will be used for downstream home textiles, extend the industrial chain, increase gross margin, and open up coal trade these, in order to improve profitability.

ST de Ma, a business person, told this newspaper that more than 80% of the cotton products were exported to all parts of the world.

However, due to the lack of international market demand and low import cotton price in recent years, the price difference between domestic cotton and domestic cotton is about 4000 yuan ~5000 yuan per ton, which makes de cotton's products not competitive in the international market.

Compared with the products of India, Pakistan and other countries, their prices are almost the same, but their prices are much lower.

Plus, our products have high tariffs, so the products are not competitive.

The total export volume of the company has decreased by 20%~30%.

At present, we can only try to improve product quality and make products with high added value.

At the same time, the company is developing the domestic market.

Zhang Bin believes that exporting enterprises to domestic sales is not as easy as imagined, which involves customer changes, business processes, quality requirements, and so on.

Transformation is a slow process.

Whether or not to succeed is closely related to strategy adjustment and management determination.

Some enterprises have spent several years, and domestic sales growth is not very big.

This is a long time.

Ma Junkai said that de cotton was once the leader of Dezhou's cotton textile industry and a window for Chinese textile enterprises. It can reflect a basic trend of China's traditional textile industry.

De cotton should be a representative enterprise.

Zhang Bin also said that domestic demand is declining, and demand in Europe and the United States is not strong in the international market. The export of many enterprises to domestic sales has exacerbated overcapacity.

Even in Europe and America, there are more orders in recent years, but a large number of orders have gone to more cost - effective Southeast Asia and India.

Because of the high cost of domestic market, the price rise has restrained demand, and spinning enterprises, whether manufacturing or domestic enterprises, have been overheating due to excessive expansion.

So it will be better to try to see the recovery process a little longer, more complicated and slower.