Recently, the news of rising oil prices and raw material prices has been heard. The cost of raw materials has risen 5% to 10%. The downstream shoe materials and weaving enterprises are miserable. In the general environment of the doldrums, the raw materials costs, dyeing fees, freight rates and so on, will undoubtedly make the business worse.
The cost of a link, often lead the whole body, affecting the entire industry. This surge in price surges this year, the most upstream from the industrial chain chemical fiber, shoe materials, fabrics spread to the end of the dealer, the industry is indeed a shock.
This is a challenge both for suppliers, producers and end-users that are caught between source and end consumer. Throughout the previous years, a number of price increases, the industry believes it will again be a reshuffle of the industry, and ultimately stay in business fight their own strength.
Raw materials rose, supplier trap price vortex
"Recently, we received a letter from the supplier's union, informing the price of raw materials will rise." Quanzhou Star Shoes Materials Co., Ltd. Qu Dongdong, deputy general manager told reporters that the amount of raw materials purchased astrology 30% 40%, and now rose 500 yuan per ton to 1,000 yuan, undoubtedly increased the cost of production. "At present, enterprises are producing summer shoes, these shoes used resin, mesh products more, so this wave of cost increases have a greater impact on the business."
Tung Lung Group R & D Director Wu Zhihui told reporters, in addition to rising raw materials, dyeing fees are also rising. Recently, more dye-price increases alone in the way the company floated. Many dye factory posted notice of price increases, large-scale printing and dyeing enterprises still showing rising dye prices. This is undoubtedly for the weaving business poured a pot of cold water. Under a piece of sound, weaving enterprises can be described as miserable.
Shishi Dyeing Association, according to relevant personnel, dyeing and finishing up a transfer conduction process, the next may affect the fabric prices.
In fact, the "price" has become the focus of the recent textile and apparel industry. From the second half of last year, the rise of the "crazy" cotton started to follow the rise of chemical fiber at the beginning of the year to the textile enterprises that have already kept up with the beat and have prepared for the price rise earlier. All the upstream and downstream of the garment industry chain are not allowed Not catch the "price" car.
The most frustrating thing for businesses is that they are experiencing the awkwardness of rising raw materials while the shipping products can not rise and have to pay for the "profit squeeze". Qu Dongdong said that although the cost is increasing, but the shipping prices of enterprises did not increase. "We rely on the quality of the perennial has been recognized by several brand customers, but there are many eye-catching counterparts.If this increase in shipping prices, is likely to be looted competitors, we must hold their own cake."
Zhi Ming Shoe Co., Ltd. Shi Wen Shi, executive vice president told reporters that because they quarterly pricing, the round of rising raw material prices they can not be superimposed on the ex-factory price, "if the average price of raw materials at this stage Calculation, our quarter profit will be reduced by hundreds of thousands, but the reduction of this part of the profit margins can only be undertaken. "Shi Wen Shi said that if the price continues to rise, it will be a great burden on the enterprise.
Up and down the whole body, rising prices and the entire industry
Why this time raw materials rose, affecting so many businesses?
Insiders pointed out that rising raw material costs and the instability of commodity prices have a great relationship.
The continuous rise of international crude oil affects the rising of raw materials. "Raw materials and international oil has a great relationship, the current basic raw materials have risen 5% to 10% .Therefore, the impact of our products prices also followed up." Jinjiang million Xinglong Dyeing Co., Ltd. Wu Xiaomeng, general manager of fabrics told Reporter, at present mainly produces the product of autumn and winter of 2017, among them nylon yarn, polyester yarn, chemical fiber fabric, knitted fabric and other main material are affected.
Wu Zhihui said chemical fiber and oil have a direct link, so the recent price of yarn, nylon, polyester these products are rising, but the current impact on their business is smaller, "per ton of raw materials rose 1000 to 2000, each code cloth up 2 Hair, less than 1% of the total cost.Compared to raw materials, enterprises are more affected by environmental protection, overcapacity, labor costs and other factors, more than 5% ~ 10%. "Wu Zhihui pointed out that when the above factors are superimposed together When the burden on the business will be very heavy, everyone on the round of raw material prices also become more sensitive.
In addition, industry insiders pointed out that at 11:30 on the 17 October local time in Germany, the chemical company BASF in Ludwigshafen on the Rhine violent explosion, a major incident also touched the raw material prices. As the world's largest chemical company, BASF, the source of this business will affect the downstream business. According to BASF's announcement, the steam cracker is still in the process of stopping due to the supply of raw materials, and about 20 other units are in parked or partially operating condition. In response, the industry said that the parking lot of raw materials, will inevitably lead to raw material prices.
Ren Jin Ba Jin, director of human resources management Co., Ltd., told reporters that the impact of rising raw materials in the transport, energy-consuming industries have taken the lead in the performance of the most sensitive industries affected by this. For Rimula, the current mainly in coal, rose more than 100 yuan per ton. As a small proportion of the proportion of coal burning boiler, so the current impact on the business is not large.
Midstream manufacturing pressure, price increases knowledgeable
Affected by the rising price of raw materials, ex-factory prices have been adjusted by some enterprises. The reporter learned from Jinjiang Hongtai Shoes Co., Ltd., the company since October also price adjustment of the sole products, "This wave of raw materials prices rose about 20%, but our prices of soles can only go up 10% ~ 15 %. "
"Raw materials prices, manufacturing enterprises in the midst of the pressure is relatively large." Hongrui Chen, deputy general manager of footwear, told reporters that the soles of the product pricing is generally affected by two factors: First, raw materials, and second, downstream demand. If the raw material prices, downstream demand is not strong, soles enterprises can only sacrifice part of the profits in exchange for orders.
"Raw material prices, the middle reaches of manufacturing companies are basically difficult to deal with the program, in order to reduce the risk, they can only choose to 'wool on the sheep' to avoid, but this approach will drive the entire industry prices." Insiders pointed out, In the market environment, good circumstances, the price is not a problem; but the market downturn, this is undoubtedly worse. If the cost added to the terminal will greatly affect the desire of consumers to buy, businesses can only consider reducing profits.
"To achieve successful price increase can only be very dependent on each other's products, but it also makes the customer a higher demand for product quality." A fabric business executives told reporters that high-end products and newly developed products relative Relatively easy to raise prices, because the high-end products, merchants are the main requirements of the quality, they are not sensitive to the price; newly developed products, it is because the style touched each other, they need this product, it can only accept the price. In addition, in today's market, raising prices is a very difficult and difficult task.
"Big brand price increases easier, small brands are difficult. Small and medium-sized brand market are mostly third and fourth tier markets, consumers in these markets are relatively price sensitive, so the price increases need to pay attention to skills." One engaged in clothing wholesale Business owner told reporters.
For the future market whether there will be a wide range of price adjustments, Ding Sien, general manager of Maui Shoes expressed their own views. "There are voices in the industry that have raised the ex-factory price, but the real increase in the price of the business is not much, we are more raw material market price volatility and shoe market to wait and see." Ding Sien said that now is approaching At the end of the year, a sudden increase in ex-factory price will affect the settlement at the end of the year and may result in competition for customers.
At the same time, Ding Sien pointed out that manufacturers will have some reserves of raw materials, this wave of price adjustments more affect the new batch of orders, but if this round of raw material rise is only a short period of time, causing a round of ex-factory price The possibility of upward adjustment is very small. "Regardless of the long and short cycle of this round of growth, those who have previously stockpiled a large number of enterprises, compared to the same industry enterprises are getting more profits."
It is understood that the impact of rising raw material prices on downstream finished products business has not yet emerged. Because most of the materials used in the production of the enterprises are mostly procured originally, the prices of the finished products may fluctuate after 2 months if the finished products enterprises begin to order the purchased materials now, the prices of which will be higher than the original ones.
Reduce intermediate links and increase profit margins
"Cost robbery" is undoubtedly a catastrophe in the textile industry, the key point of its size is whether it can be transmitted to end-consumers. The industry believes that this part of the price to be completely by the end-consumer "pay" is not realistic, because consumers demand for clothing can be flexible, consumers can buy or not buy, buy expensive or buy cheap.
When the demand of consumers is variable and the price of raw materials is immutable, the entire industrial chain caught in the middle becomes a sandwich layer. They suffer both together and share the catastrophe, in order to preserve themselves, they will play each other again. Under the pressure of increasing cost, the step of meticulous management has become a new channel for the textile and garment enterprises to seek breakthroughs and breakthroughs.
Fan Jinxing told reporters that before the scheduled fabric but also based on the previous price transaction, the new order may be the price will rise. "Although the performance of the market has a process, but I think it is necessary to cut costs." He disclosed that Rimula will reduce unnecessary costs in the middle of the link to reduce costs.
"Currently we can only hold the existing cake, at the same time to open up new markets." Qu Dongdong told reporters that Star has already done related deployment, by increasing production to the low-end impulse in order to achieve all the production Operating costs to reduce the purpose; In addition, Star to give full play to the original advantages of innovative technologies, the existing technology and equipment to expand the application to other categories, such as clothing categories. "We also consider adjusting the prices of newly developed products."
Adjusting the product structure and increasing profit margins have become the means by which enterprises seek to break away from "cost robbery."
The face of rising raw material prices, Chen Ruoling said that this year's profits will be worse than last year, so the company can only improve the prices of commodities to deal with the crisis brought about by rising raw material prices. At the same time, Chen Ruiling also more aware of the importance of research and development of high value-added products, only high value-added products have bargaining space and profit margins.
"As people's living standards improve, resulting in a new market demand, companies should have a keen insight, to find and meet consumer demand for the diversification of goods, especially in some series of product development, it should be more ingenuity to Novel and unique products occupy the potential market. "Chen Ruiling said that a good product will certainly enable the company in the fierce competition in the market more bargaining power.
Coincidentally, Zhen Chun Zhang Zhen, general manager of shoe, said the company's product positioning in the high-end market, the current price of raw materials did not have a great impact on the company, but if the next period of time the raw material is still rising, the company will be new Pricing will increase ex-factory price from increasing product added value, but for older products, more management will be adopted to reduce costs through refinement. Meanwhile, efforts will be made to semi-automate equipment to further increase output and raise standardization level .
Wu Zhihui frankly, at present the fabric industry to make money little business, affected by various factors, companies can only cut back the bad customers, choose monthly, cash customers to reduce the risk. More importantly, Tailong adjusts the structure of its products. For those who choose to make low-profit or low-profit products, they will choose from high-end products, high-value-added products or large-quantity products