A new round of survival of the fittest: how can small and medium-sized textile enterprises live?

“The pursuit of economic growth and the consequences of over-investment will inevitably take some time to digest. The same is true for the cotton textile industry. At present, China’s cotton textile industry’s production capacity has been relatively surplus. The companies that are impacted should first be low-quality, low-quality companies. In the new round of 2016 elimination, a considerable number of small and medium-sized textile companies will be eliminated."

Although the first two months of 2016 have passed, the decline of the market in the third quarter of 2015 has left a deep shadow on the industry. Everyone seems to be puzzled that in the most difficult period of the cotton textile industry where cotton is collected and stored, and the price difference between cotton inside and outside the country is high, so many enterprises have come. In the nearly one year when the cotton textile market environment has been continuously optimized, everyone's heart Instead, it is more embarrassing and pessimistic?

In 2016, in addition to the dual pressures of the country’s macroeconomic structural adjustments and the continued sluggishness of the international economy, the cotton textile industry must also pay attention to the additional 500 million ingot production capacity in Xinjiang. Factors such as the bank’s monetary contraction and tightening of funds have brought cotton to textile companies. The influence can not be ignored. At present, the words most mentioned by the heads of cotton textile enterprises are "the year of change," "uncertainty," "unpredictability," and "difficult living conditions." So, how to deal with the severe situation of 2016? What are the countermeasures? What was the lesson? The author believes that we are currently in an era of change, who are willing to make progress, and those who are in reverse must die. Only by taking advantage of the situation can we gain a place to live in market competition.

The survival of the fittest is even more pronounced

At present, the main tone of the economy at the national level is structural adjustment and steady growth. In 2016, the state explicitly cleared up ineffective supply, increased structural adjustments to surplus production capacity, used market forces to forcibly remove leverage, and allowed “zombie enterprises” to bankrupt in bankruptcy. The closure of the closed doors and the reorganization of the restructuring will inevitably affect the The demand for the textile end market has a certain impact. Of course, the blind pursuit of the consequences of excessive investment caused by economic growth will inevitably take some time to digest, as does the cotton textile industry. At present, the production capacity of China's cotton textile industry has been relatively surplus. The companies that are impacted should first be low-quality, low-quality companies. It can be said that in the 2016 new round of elimination, there will be a considerable number of small and medium-sized textile enterprises. Eliminated.

In addition, the four major factors constraining economic growth, such as the oversupply and shortage of supply-side structural inconsistencies, lack of endogenous demand on the demand side, inefficient operation of the fund side, and conduction block on the price side, will be reflected in 2016 more thoroughly and homogenously. The blind investment in equipment and products has resulted in low capital utilization. It is not a simple matter to resolve these unfavorable factors. With this trend, SMEs can only be eliminated if they are not reformed.

At present, the biggest problem facing cotton textile companies, especially small and medium-sized cotton textile companies, is to "live." A well-known German entrepreneur once said: To be a company at any time must consider "live", and only "live" is the last word. This is like a "sweeping agent" for the current domestic cotton textile companies. “Live” warns that every head of a company can't be blind. A company can't have no profits, can't live without a bottom line, be responsible for the company’s own development, and be responsible for its own investment.

Prudent investment to avoid risks

The overcapacity in the cotton textile industry will have significant structural adjustments in 2016. This is the task of steady growth and reform at the national level. But any investment is risky. The stock market madness in 2015 is still fresh in people's memories. In the stock market's excellent market, many cotton textile companies have invested in the purchase of cotton and technical reform equipment into the stock market. Who knows the sudden change, many cotton textile companies entering the stock market for many years Hard money is hard to beat. Once the impetuous, fanatical investment in the industry needs a good reflection. Some people say that doing a business is like guarding a facade, and it must be able to endure loneliness, not to have the mentality of being rich overnight, and to be quick and profitable.

Similarly, in the context of the global financial crisis and economic crisis, cash flow is the "blood" of business operations. Stick to the textile industry and control the cost to live. It is not difficult to find cotton textile enterprises that have closed down in recent years. They are keen to talk about so-called diversification and capitalization, and venture into unfamiliar fields, which is very dangerous for enterprises. According to the author's understanding, the closure of a textile company in Shandong is the result of investing in rubber tires and the real estate industry. It has lost billions of yuan in debt and has fallen into the abyss; a factory in Henan has earned a lot of money in the early years, but between enterprises. The prevailing atmosphere of UNPROFOR, and the guarantee of another non-textile company in an unfamiliar situation, was dragged down and the capital chain of the company broke down. In fact, the above-mentioned enterprises have all committed "embarrassment", that is, lack of respect for business, lack of corporate ethics.

Business investment should always pay attention to changes in macroeconomic risks, so that changes can be made. Enterprises should strengthen the study of market risk factors, focusing on exchange rate risk, deflation risk, raw material price fluctuation risk and so on. For export companies, we must integrate the product's eco-safety management that meets international standards into the company's international development strategy and establish an effective management system. And well-known brand enterprises must protect their brand image and do a good job in the construction of a green supply chain. Especially during the downturn of the market, companies must exercise their strengths, strengthen internal management, and develop and produce original products in order to expect better performance in market opportunities.

Pay attention to product transformation and upgrading

Cotton textile companies want to be profitable if they want to survive, and only if they are profitable can they stabilize their position in the market. The profitability of cotton textile companies is inseparable from their own precise market positioning. Market positioning is a strategic issue for corporate development and must be clear. Because of the problems of equipment reformation and updating, organization and configuration, talent introduction and training centered around product positioning, only if the positioning is clear can the internal resources be successfully integrated. Cotton textile enterprises need to pay attention to the fact that they adopt traditional production and management methods, blindly produce products, and do not set up product development agencies that are in close conformity with the market, and are behind closed doors. This business model must be infeasible.

At present, under the new situation, many cotton textile enterprises still do not share resources between the sales department and the production department. The products designed by the production department lag behind the market demand. The important responsibility of product R&D organizations is to understand the market, analyze customer groups, develop high value-added products, and actively develop and occupy the market. This is the only choice for cotton textile companies to get rid of blind production and low-profit production.

In recent years, the cotton textile industry has been advocating product transformation and upgrading, then what is the transformation and upgrading? From the aspect of yarn types, pure cotton products are changing to high-grade and high-quality yarns, and major road and homogenized products are being transformed into differentiated fiber varieties, such as viscose, modal, tencel, polyester, and other blended yarn products; traditional spinning Yarn technology products are changing to new spinning technologies such as siro spinning, compact spinning, core-spun yarns, vortex spinning and other products. Cotton textile companies must find ways to transform and upgrade their own businesses in many ways.

In addition, in the adjustment of the talent structure, the low-end technical personnel in the cotton textile industry will become saturated with the oversupply of spindles, while the high-end talents will be in short supply with the “going out” and restructuring of the cotton textile industry. Embodied in the scale of enterprises need high-quality, executive composite talents, a single talent can not meet the needs of enterprises bigger and stronger and "going out". For example, at the same time as familiar with the production technology, there are few talents who understand many languages, or are versed in many aspects such as computers and e-commerce technologies. The industry expects that universities and colleges in China will be able to closely integrate with the needs of enterprises and cultivate the compound technical talents and managerial talents that are urgently needed by enterprises to ensure that the transformation and upgrading of cotton textile enterprises are not constrained by "talents".

It may be more sensible to exit timely

At present, under the influence of the cotton market, the cotton textile market is full of uncertainties and the risks are unpredictable. As the helm of the enterprise, in the unpredictable tide of economic downturn, one should abstain from adversity, earnestly do entities, and do fine work. However, if you do not have a good grasp of your own development, you can also use it as a retreat, gain momentum, practice your internal skills, and avoid risky challenges. If companies have exhausted all of them, unable to offset high costs, the debt ratio of assets exceeds 80%, or companies have serious losses, there is a risk that the capital chain will break at any time, and it will be a best option to withdraw from the competition as soon as possible.

China's economic restructuring has become a trend, especially in the trend of shifting cotton textile production capacity in the coastal areas to the central and western regions, and there are no tricks that can only sit still. In the cotton industry's capacity elimination, the market's adjustment role is needed to make the "market hand" eliminate ineffective companies. Therefore, cotton textile companies should measure themselves whether they are high-energy-consumption, inefficient old-equipment production capacity, whether they belong to a “zombie enterprise” with no capital, talent, and management skills. If so, they should be bankrupt. , close or regroup, get ready for early liberation.