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Textile factories cope with rising costs of overseas companies

Published on:2013/12/31 11:46:21

Keyword:Cotton, prices, markets, cotton, textile industry, cotton yarn, yarn, textile, cases, fiber
Introduction:Leading cotton textile enterprises in Zhejiang Cole Group Limited (hereinafter referred to Cole Group) will open its first overseas plant in the U.S. ...

Leading cotton textile enterprises in Zhejiang Cole Group Limited (hereinafter referred to Cole Group) will open its first overseas plant in the U.S. state of South Carolina Lancaster County, a total investment of $ 218 million. "Contracts have been converted from the intention to invest in real terms in force, the first phase of the project will break ground in February 2014, is expected to put into operation in October 2014." This group of companies Office Huangguo Gang Dec. 26 on the "Daily Economic News" reporter said.
Zhejiang, China Cotton Textile Industry Association Secretary-General Liu Aihua believes Cole Group set up factories in the United States, if the pressure on the environment as well as the main reason for being in raw material prices, "Domestic cotton prices significantly higher than the international cotton prices, the spread at around 5,000 yuan per ton." Dean of Business Research Institute of Zhejiang Province Zhang Handong the stand, before manufacturing foreign investment mainly includes equity investments and mergers and acquisitions, direct factories, mainly in emerging markets or develop my country, the United States and other developed countries compared directly in factories rare. With the rising cost of trade barriers and other factors restricting factor, as well as land, labor and resources, estimated future direct foreign investment will be more.
Select the rising costs of overseas factories
Liu Aihua to the "Daily Economic News" reporter position, Cole Group is the first direct foreign investment in Zhejiang Province, cotton textile enterprises, but also Chinas textile enterprises to set up the first manufacturing plant in the United States.
Huang Guo Gang statement to reporters, since this year, as companies increasingly large scale, the bottleneck restricting the external environment is more and more significant, the company has always been looking for a way out. The end, the company began looking for investment opportunities were in Vietnam, India, Pakistan, the United States and other countries, and finally through the actual research with demonstration sites will be set up factories in the United States.
Huang Guo Gang said the main foreign investment projects in order to deal with the domestic cotton industry, if the labor force, the high cost of energy and other issues, to avoid international trade barriers set by the Chinese textile industry, promote internationalization strategy implementation.
Cole Group presented data show that these plants 820 acres of the total land area, with a total construction area of ​​150,000 square meters, a construction area of ​​40,000 square meters, the main contents include two workshops to build and ancillary facilities. The entire project will form 100 the worlds most advanced air spinning, yarn 150,000 tons, of which 52 units supporting an airflow textile and other production equipment, production annual production reached 70,000 tons of air spinning.
"Daily Economic News" reporter get the message, the project name is Cole American companies, investors, including Cole Group Hangmin with Zhejiang Industrial Group Limited. "Initiated by our two angles, but by the Cole Group Holdings." Huangguo Gang said.
Why choose the United States, Huang Guo Gang said the United States is the worlds third largest cotton-producing countries, rich is the worlds largest cotton exporter, cotton resources; South Carolina textile big state, gathered the nations largest textile companies, forming a more sound industrial agglomeration. "Part of the product shipped to the domestic supply of the domestic market demand, part of the place or the surrounding area sales."
Spread 5000 yuan per ton of cotton
It is understood that the price of raw cotton domestic and foreign major overhang poor, but also an important reason for Kohl Group has chosen to set up "overseas factory".
According Huang Guo Gang description of this new plant set up takes about 500 labor, domestic labor each year his company each cost about $ 50,000, the United States will need $ 200,000, but the domestic labor costs rising year by year, the United States has maintained this level 20 years. Huangguo Gang calculated annual consumption of about 150,000 tons of cotton, cotton price per ton higher than the national average of about 5,000 yuan abroad, this means that while the U.S. labor force compared to high, but raw cotton will be able to save 750 million yuan.
According to China Textile Industry Association recently released data show that three quarters of 2013, domestic cotton prices continue to sharply higher than the international cotton prices, the third quarter average of 5132 yuan spread / ton, compared with the second quarter increased 260 yuan per ton spread.
Significant differences in cotton prices has also led to domestic cotton prices also higher than the international cotton prices. 2013 third quarter, China 32 cotton carded yarn prices than similar products in Pakistan about 1000 yuan / ton; China 10 rotor spinning cotton in India is higher than similar products in 1200 yuan / ton.
With the same time, the price difference is very big and abroad. According Huang Guo Gang description, cotton consumes more domestic electricity costs 0.7 yuan per kWh, the United States but only 0.3 yuan. "Cotton import quotas, textile industry, tax policies, as well as energy saving companies in recent years have become increasingly demanding, including the orderly production of electricity and so on caused some impact."
Liu Aihua believes that, in addition to raw material prices and the poor, electrical energy, but also includes the increasingly stringent environmental pressures. It is worth mentioning that the textile industry is currently facing sluggish demand situation. According to the Cotton Association in late October trip to the national textile industry field research to understand the downstream market demand did not improve, the order is not busy, underemployment, poor sales. Still more difficult to reflect the operating companies around the current corporate average operating rate of 85%. Underemployment is mainly due to lack of orders, shortage of workers in other parts of the problem is more prominent.
Manufacturing relocation mode change
It is worth noting that the Cole Group operates in Xiaoshan District of Hangzhou, is an important production base in Zhejiang petrochemical, textile and other manufacturing industries. In recent years, Hangzhou Xiaoshan District, local leading companies in many industries began to participate with foreign direct investment.
Public information, all of the shares in May 2011, Chinas largest and the worlds third Wealthy viscose fiber production enterprise group to $ 250 million acquisition of the industrial chain upstream Canada Niuxi Er specialty cellulose Limited. January 30, 2013, Wanxiang Group issued a statement saying the U.S. company, Universal has received consent from the U.S. Committee on Foreign Investment (CFIUS), the approval of all of its assets are acquired by non-governmental A123s.
According to another report, the first 11 months, Zhejiang Xiaoshan newly approved 17 foreign-invested enterprises, Chinese contractual overseas investment $ 2 billion total, more than 2012 years ago, with more than 20 years, a total of 1.35 times the total of newly approved foreign investment ranks all counties (cities, districts) first.
Zhang Handong think, now, the southeast coast of some of the traditional transfer of manufacturing to Southeast Asia and other countries, but is presented early Chinese traditional manufacturing model, Cole Group set up factories in the United States similar to the way that can bring some inspiration to the development of the manufacturing sector With the rising cost of trade barriers and other factors restricting factor, land, labor, resources, and businesses to set up factories in the developed areas of this "going out" strategy, can effectively promote industrial restructuring and upgrading, completed in resources, technology, brand, market, competitiveness and growth with improvement in the angle, "This model may be more."      

Keyword:Cotton, prices, markets, cotton, textile industry, cotton yarn, yarn, textile, cases, fiber

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