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More and more China’s Dyeing & Printing companies face Red

Taken together, there are 768 companies running in red, accounting for 48.72 percent of all the dyeing and printing companies, considered in a statistical study, a large increase by 16.15 percentage points over the corresponding months last year. The total loss of money in these red bottom-line companies added up to 1086 million Yuan, up by 46.41 percent. 

From January to February, the beginning of the year 2020, production of dyed and printed fabrics was reported to have touched 4913 million meters, a two-digit reduction by 22.42 percent, and further drop by 29.88 percent for sales income that totaled 24.706 billion Yuan from 1560 dyeing and printing companies, in the size of the companies considered above a designated size. Much more jaw-dropping is the fact that profits had a freefall by 101.8 percent while the export were down by 23.9 percent as opposed to the same period in 2019.

Normally, the swim or sink of a corporate profit rests with many factors, but financial cost, management cost, and the sales cost are the big three cost factors critical for any company’s bottom line that appears in red or in black. These big three cost factors take up a lion-share of an average of 85.64 percent of the business income in dyeing and printing industry. In the dyeing and printing sector, these big three costs, increased by 9.39 percent in the first two months of 2020, whereas, sector wise the increase for cotton fabrics was by 8.87 percent, and for fabrics made from man-made fiber, it was 14.08 percent.

Taken together, there are 768 companies running in red, accounting for 48.72 percent of all the dyeing and printing companies, considered in a statistical study, a large increase by 16.15 percentage points over the corresponding months last year. The total loss of money in these red bottom-line companies added up to 1086 million Yuan, up by 46.41 percent. 

 More and more Chinas Dyeing Printing companies face Red
 Dye & Print Fashion amid Pandemic

China Dyeing and Printing Association (CDPA) issued its annual report in late March 2020 for the economic performance in dyeing and printing sector (Annual Report 2019), stating that the twelve months 2019 witnessed 0.83 percent increase in business sales income totaling 283.153 billion Yuan, a drop by 2.15 percentage points, and the profit increased by 6.49 percent, but growth rate had a considerable downslide by 11.44 percentage as compared with 2018 due to the increase in the big three costs to amounting to 15.835 billion Yuan. 

The number of companies running at a loss amounted to 309, representing 18.92 percent of the total companies included in the statistical study, up by 9.76 percent to increase by 21.24 percentage points higher over 2018. The year of 2019 saw an increase in international trade for $29.144 billion by 7.34 percent, resulting in trade surplus for $25.689 billion, up by 10.4 percent.

Speaking of the import, the eight big categories of dyeing and printing textiles, including the dyed and printed cotton or manmade fiber or their blended fabrics in different textures of weaves and knits, as per CDPA’s own standards for identifying the product lines in the sector, were registered for 878 million meters for $1727 million, 12.62 percent down in volume and 10.94 percent drop in value, about 1.97 dollar/meter on average, up by 1.92 percent.

Blue print Fashion Town in Keqiao Shaoxing city of Zhejiang Province
 Blue-print Fashion Town in Keqiao, Shaoxing city of Zhejiang Province

The export of the eight big categories from January to December in 2019 amounted to 26.823 billion meters, and to 27.417 billion dollars, enjoyed an increase in volume by 12.83 percent and in value by 8.75 percent, but the average unit prices of sales decreased by 3.62 percent and decreased 1.02 dollar/meter in terms of weighted average.

In the report, CDPA predicts that the global pandemic impacts will slow down the world economic growth as it is the severest challenge since the financial crisis in 2008, and will weaken the support force to the market recovery. The dyeing and printing industry will bear even greater pressure in sustaining a continually smooth run and a more arduous task for reshaping the industry for better development. 

And sure enough, if the opening two months of 2020 and pandemic thereafter is to be looked at, China’s Dyeing & Printing Industry is far away from being termed as a “good beginning” is “half done”. 

 

Contributed by Mr. ZHAO Hong 

He is working for CHINA TEXTILE magazine as Editor-in-Chief in addition to being involved in a plethora of activities for the textile industry. He has worked for the Engineering Institute of Ministry of Textile Industry, and for China National Textile Council and continues to serve the industry in the capacity of Deputy Director of China Textile International Exchange Centre, V. President  of China Knitting Industry Association, V. President of China Textile Magazine and its Editor-in-Chief for the English Version, Deputy Director of News Centre of China National Textile and Apparel Council (CNTAC), Deputy Director of International Trade Office, CNTAC, Deputy Director of China Textile Economic Research Centre. He was also elected once ACT Chair of Private Sector Consulting Committee of International Textile and Clothing Bureau (ITCB)

 

 
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