Anhui small and medium-sized service enterprises looming closed tide

With the sharp drop in foreign orders, intensified domestic inflation, and the bank’s lack of money to make loans, small and medium-sized garment enterprises in our province, whose main business is foreign trade exports, are facing “domestic and diplomatic difficulties”: they have no profit but have to maintain production in order to maintain their operations. In this vicious cycle, more than 15% of small and medium-sized foreign trade clothing companies have been forced to close down, sell or transform their businesses.

◎ The capital chain breaks garment processing enterprises looming the tide of closure “The foreign trade of clothing has always been low profit, and the profit is about 5%. However, this is only gross profit. If we consider the impact of inflation, interest depreciation, and the appreciation of ***, many are actually zero. "Profit." Chen, a boss of the provincial capital who runs women's clothing production and export, told reporters.

In the garment manufacturing industry in the province, Chen Bo’s factory works well. In recent years, garment foreign trade companies in our province have experienced multiple rounds of attacks. The financial crisis in 2008 caused orders to decrease; in 2010, raw materials rose sharply and banks began to tighten credit. According to the relevant personage of Anhui Province Garment Chamber of Commerce, it is estimated that about 15% to 30% of small and medium-sized foreign trade garment processing enterprises in our province have faced failures, sales, and restructuring due to operational problems this year. The reason for the collapse is none other than the breakage of the capital chain. "Don't say increase the amount of money, even if it is ****, basically can not get it."

“There is a 5 million yuan ** paid off this year and it was put back in previous years. After the old ** was paid off, the new yankee will be able to approve it very soon. But this year the bank’s position was tight, and the old **’s business relationship was interrupted. "The boss of the province, who is engaged in garment processing and export, told reporters.

** Difficult to get, and the capital cost of ** has also multiplied. "Last year our company had **6 million, and the cost of interest, etc., was about 500,000. This year, the same **6 million, capital costs have doubled to 1 million." Ms. Qian, who has been engaged in the production and sales of women's clothing for ten years, told reporters , "This year's interest rates for SMEs in banks will increase by 40% for the benchmark interest rate, plus the guarantee company's guarantee fees and information fees, and the bank's financial advisory fees. Even if the formal channel's borrowing costs have reached a monthly rate of 1 cent to 1 cent 5. "When it comes to private lending, "Don't dare to touch, (the private lending) 5 points per month, our profit rate is so low who dares to borrow? Whoever borrows."

◎ The pain of transformation The way out of the apparel industry is how brands view the closure of small and medium-sized garment manufacturers in our province? Ye Liang, secretary of the Anhui Garment Chamber of Commerce, said that this is an inevitable phenomenon in the process of industrial upgrading and development. “The overall development momentum of the province’s garment manufacturing industry has been good in recent years. From the early days, foreign trade OEM has gradually upgraded to the current self-employed. The combination of export and domestic sales will require the development of independent brands within the province. In this process, some small and medium-sized enterprises with anti-risk capabilities and small scale are eliminated. This is the only way for the development of the industry."

According to Secretary-General Ye Liang, there are currently more than 6,000 various types of garment processing and manufacturing enterprises in our province, of which about 700 have an annual output value of more than 20 million yuan, while less than 100 are their own brands. “With less than 10% of the profit rate of foreign trade clothing companies, the profit rate of branded apparel companies can reach more than 30%, but they need to pay more up-front costs.” 20 years of experience in the apparel industry, with two brands Li Yang, the "Yang Yang" and "Li Rui," told reporters.