Sewing Equipment Industry Downturn 2008 Will Become Sewing Enterprise Shuffle Year

Even in Taizhou, Zhejiang, known as "China's sewing equipment manufacturing capital", the group is still the leading company in the region.

As the world's largest export base for sewing equipment production, the leap Group is known as the leader of China's sewing equipment industry, but it is the "leader". Recently, it has been reported that some products are seriously declining in production and sales, and the news of the breakup of capital chain has aroused people's concern.

The reporter understands that under the influence of various factors, it is not only the leap group but also other well-known enterprises such as ZOJE, standard and so on.

Faced with the acceleration of shuffling industry, the Taizhou municipal government, which is the largest sewing equipment production base in China, has issued a series of policy suggestions to encourage enterprises to carry out scientific and technological research and new product development, which will become a way to solve the industry dilemma.

Sewing equipment industry downturn

Although the leap Group has formed an annual capacity of about 5000000 sets of sewing equipment, of which 50% of the world's total output is sewing machine and sewing machine, but this company, which has already succeeded in the world's advanced industry, has exposed the rumor that the capital chain is broken.

Public reports show that, as early as March 27th this year, Zhang Ruimin, director of the Taizhou economic and Trade Commission, has arrived at the diving group to investigate and analyze with the relevant personnel to solve the current problem of enterprise development.

In an exclusive interview with the "daily economic news" reporter, Qiu Jibao, chairman of the group, said: "the company has always been normal, and government departments often contact with enterprises. They are normal research."

But at the same time, Qiu Jibao also admits: "at present, the flying group has some difficulties, including the depreciation of the US dollar and the obstruction of exports."

Faced with the difficulties of sewing equipment enterprises in fact not only leap Group one, the same industry as the leading standard share (600302, SH) this year, a quarterly report shows that its basic earnings per share is only 0.0120 yuan, compared with the same period last year dropped by 91.58%.

According to the 2007 annual report, although the operating income of sewing equipment increased by 8% over the same period last year, the operating cost increased faster, while the operating profit rate decreased by 2.38% compared with the same period last year.

Shang Shang Shen Bei (600843, SH) is also facing the same situation, its sewing equipment operating costs increase far more than business income, the same period operating profit rate decreased by 9.99%.

Like the ZOJE group, which is located in the Taizhou region of Zhejiang and the group of flying group, it is hard to escape the impact of the industry downturn. Its earnings per share in the first quarter were 0.0250 yuan, down 81.23% compared with the same period last year.

The report issued by Taizhou sewing equipment industry association summed up the group's problem as "because in recent years, it has invested heavily in the fields of technological progress, industrial upgrading and internationalization, too long, and the production and sales of some products have dropped sharply. In addition, the tight monetary policy has brought great pressure to the capital chain of enterprises".

External factors aggravate the plight of the industry

As the largest producer and exporter of sewing equipment in the country, Taizhou has a large production enterprise group, which has always been the weathervane of industry adjustment.

Public information shows that in the first quarter of this year, the total output of Taizhou's sewing equipment scale enterprises was 1 million 15 thousand and 600, 15.3% lower than the same period last year, and the output value and efficiency also showed a significant decline.

In a document, the industry association attributed the downturn in the sewing equipment industry to "the adverse effects of the rapid increase in raw materials and energy prices, the adjustment of the domestic garment industry, the appreciation of the renminbi, the reduction of the export tax rebate rate, the increase in labor costs and the subprime mortgage crisis in the United States" since the second half of 2007.

In an open letter to entrepreneurs from China Sewing equipment network, the reason why the industry is facing difficulties is attributed to the continued appreciation of the renminbi and the introduction of the new labor law.

The open letter indicates that the continued appreciation of the renminbi has directly led to the end of many foreign trade orders. The introduction of the new labor law has declared the end of the era of low cost competition, which has directly led to the closure, closure and discontinuation of many small and medium-sized manufacturing enterprises. The impact on the large enterprises is also very large. Large enterprises and large companies in the industry have laid off a lot of jobs and pferred the procurement center to the outside.

The quarterly stock price of standard shares also summed up the reasons for the decrease in net profit as "the downward trend of the macroeconomic situation, the appreciation of the renminbi, the reduction of the export tax rebate rate of textile and garment industry, and the rise in labor costs, resulting in a reduction in demand for sewing equipment in the textile and garment industry".

2008 will be the industry reshuffle year.

According to industry sources, in the second half of last year, a large number of clothing and footwear enterprises in Guangdong Province closed down.

Recently, the most exclamation sentence for sewing machine dealers is: "they are all closed. Who will ask for money?"

It is worth noting that the quarterly report of standard shares shows that the cash flow per share of the company in the first quarter was negative 0.1464 yuan, a sharp decrease of 115.17% compared to the same period last year. Without the support of the floating capital, the operation of the company will obviously face enormous difficulties.

Leading enterprises such a large number of small and medium-sized enterprises, of course, more difficult days, for this, netizens timelines think: "08 years is our industry shuffle year."

Taizhou sewing equipment industry association also holds the same view. "The sewing equipment industry after years of scale expansion has experienced unprecedented pressure. The industry" shuffle "accelerated, and entered the stage of adjustment and pformation from rapid development to stable development.

Before, the person in charge of the China Sewing Machinery Association said in an interview with the media that, "because of the downturn in the industry, with the collapse of many small and medium-sized enterprises, it is possible to see the time of reshuffle in the industry."

Accelerating innovation or finding a way out

The report issued by Taizhou sewing equipment industry association said that in order to break through the current predicament, enterprises must "increase the research and development of products and increase the proportion of products with high quality and high added value".

The policy opinions of the Taizhou Municipal People's government also indicated that for the sewing equipment industry, enterprises should be encouraged to carry out scientific and technological research and new product development.

The open letter of China Sewing equipment network also said that enterprises should "encourage their employees to be bold in technological innovation and management innovation."

At the same time, in the Taizhou leading industry to speed up industrial upgrading report, pointed out that at present, Taizhou industrial sewing machine is moving to high-grade and multi-functional special models.

In an interview with the daily economic news reporter, Li Ruiyuan, the new chairman of ZOJE shares, said: "at present, the company's primary task is to promote the development of innovation capability. If the company wants to break the status of Japan and other foreign enterprises in the international market, it must change the present backward situation, and technological innovation is the most important means, which is also the direction of the company's development."