In recent years, the dyeing and finishing industry has faced the dual pressures of increasing environmental protection and rising raw material prices, making it feel like it's "under attack from both sides". How to accelerate the adjustment and transformation and upgrading to achieve new development has become an urgent issue that the entire industry needs to solve. To this end, Lin Lin, Secretary-General of the China Dyeing and Finishing Industry Association said, Strengthening technological innovation, accelerating the adjustment of product and market structures, and improving the level of industry management will be three important aspects of the transformation and upgrading of the dyeing and finishing industry .

2018 Dyeing and Finishing Industry Operating Quality Indicators

Export Status of Eight Major Categories of Dyed and Finished Products from 2011 to 2018

Proportion of Dyed Fabric Output in Major Provinces and Cities in 2018

Reporter: China's textile industry is undergoing a period of transformation. What are the characteristics of the operation of the dyeing and finishing industry in 2018?

 

Lin Lin: In 2018, the dyeing and finishing industry continued to deepen the supply-side structural reform around the new positioning of "technology, fashion, and green", promoting the industry's progress towards high-quality development. The overall economic operation of the industry was stable, production and efficiency were steadily improving, and positive progress was made in structural adjustment and transformation and upgrading.

 

Among them, the growth rate of production in the dyeing and finishing industry slowed down. In 2018, the output of dyed fabrics by dyeing enterprises above designated size was 49.069 billion meters, a year-on-year increase of 2.63%, a decrease of 2.12 percentage points compared with the same period in 2017.

 

Under the influence of multiple factors such as national industrial policies, industry transformation and upgrading, production factor costs, stricter environmental protection, and market demand, the growth rate of dyed fabric output has fallen and remained at a low level. The regional concentration remains high, and the Southeast coastal region continues to play a leading role in the development of the dyeing and finishing industry.

 

In 2018, the operating quality and efficiency of the dyeing and finishing industry continued to improve. The proportion of three expenses further decreased, and the management level steadily improved. The sales profit margin increased, and profitability further strengthened. The accounts receivable turnover rate and total asset turnover rate increased, and operating efficiency gradually improved. The production operation and market connection of enterprises were smooth, and the steady improvement of operating quality was a highlight of the economic operation of the dyeing and finishing industry.

　　

Reporter: What is the development trend of the dyeing and finishing industry in 2019?

 

Lin Lin: The dyeing and finishing industry had a good start in 2019. From January to February 2019, the output of dyed fabrics by dyeing enterprises above designated size was 6.173 billion meters, an increase of 3.29% year-on-year. The three-expense ratio was 8.21%, an increase of 0.16 percentage points compared with the same period in 2018; the cost-expense profit margin was 2.38%, an increase of 0.22 percentage points compared with the same period in 2018; the sales profit margin was 2.30%, an increase of 0.20 percentage points compared with the same period in 2018; the finished product turnover rate was 3.00 times/year, a year-on-year decrease of 5.97%; the accounts receivable turnover rate was 1.45 times/year, a year-on-year decrease of 6.91%; the total asset turnover rate was 0.15 times/year, a year-on-year decrease of 5.54%.

 

From January to February 2019, dyeing enterprises above designated size achieved main business income of 36.519 billion yuan, a year-on-year decrease of 3.71%; total profit of 8.39 billion yuan, a year-on-year increase of 5.54%; export delivery value of 5.899 billion yuan, a year-on-year decrease of 12.43%. The number of loss-making enterprises was 528, and the loss rate was 32.57%, an increase of 4.90 percentage points compared with the same period in 2018; the total loss of loss-making enterprises was 7.27 billion yuan, an increase of 1.97% compared with the same period in 2018.

 

We predict that the development of the industry will exacerbate the polarization of enterprises. Backbone enterprises, relying on the accumulation and improvement of their independent innovation capabilities, will develop steadily, and the operating conditions and efficiency will generally be stable, further highlighting their contribution to the industry's economic growth; enterprises that do not pay attention to improvement will face more prominent survival problems.

 

Reporter: In recent years, the international market has been complex and changeable. Has the export of Chinese dyeing and finishing enterprises been affected?

 

Lin Lin: In recent years, the dyeing and finishing industry has shown a trend of rising prices and volumes, and its export performance has been good. In 2018, the top 10 markets accounted for a total of 10.262 billion meters, accounting for 44.07% of the total export volume; the export value was US$11.458 billion, accounting for 46.43% of the total export value.

 

Vietnam is still the largest export market, accounting for 8.48% of the total export volume and 13% of the export value. Southeast Asian countries have become the main export markets for China's dyed fabrics. China's exports to emerging markets such as ASEAN have basically increased year by year, exports to Russia have remained stable, and exports to India have shown a slight increase since 2012.

 

However, it is worth noting that international competition in traditional export markets has intensified, exports to the EU market have decreased significantly year-on-year, and the Sino-US trade friction has not yet had a significant impact on the dyeing and finishing industry, but the uncertainty of the export environment has increased.

 

Reporter: With the new round of industrial revolution and the transformation of the global industrial competition model, what problems and pressures may the dyeing and finishing industry face in future development?

 

Lin Lin: First, the cost pressure of the industry continues to rise. The continuous increase in labor costs has become the norm; the prices of dyes and chemicals have remained high in recent years and are greatly affected by the operating conditions of the upstream (safety and environmental protection factors); national environmental protection policies are becoming increasingly stringent, and the requirements for wastewater and waste gas treatment are constantly increasing, leading to a continuous increase in environmental protection investment and operating costs; high-quality development puts higher demands on the industry's technological progress, and investment in industry technological transformation and technological innovation is constantly increasing.

 

Second, international competition is intensifying. The share of Vietnam, Bangladesh, India and other Southeast Asian countries in the three major textile markets of the US, Japan and Europe continues to increase; the Sino-US trade friction continues to exist, and more orders are flowing to Southeast Asia, which has labor cost and tariff policy advantages. In recent years, Vietnam's textile industry has developed rapidly, and it may reduce its dependence on Chinese fabrics and raw materials, building an industrial chain that directly competes with China, and China's dyed fabric exports will face more intense market competition.

 

However, we must recognize that although the current situation has significantly increased unfavorable factors for the industry's export growth, it also provides opportunities for China's dyeing and finishing industry to develop diversified markets. Dyeing and finishing enterprises should adjust their market structure, deepen the development of international markets, and strive to create new competitive advantages under the background of the "Belt and Road" initiative.

 

Reporter: The dyeing and finishing industry needs to change its traditional development model and rely more on innovation-driven development. What are the directions and priorities for development?

 

Lin Lin: First, it is necessary to strengthen technological innovation and break through key technologies in the industry. Focus on developing the design and manufacturing technologies of high-quality dyed and finished products, developing functional textile dyeing and finishing technologies, multi-component textile dyeing and finishing technologies, high color fastness textile dyeing and finishing technologies, and new fiber dyeing and finishing technologies to improve the core competitiveness of products and accelerate the advancement of the dyeing and finishing industry to the mid-to-high end. Develop and apply clean production and pollution reduction dyeing and finishing technologies, develop low-energy consumption, low-pollution, and high resource utilization clean production technologies, low-cost "three wastes" treatment technologies, and resource recycling technologies to promote the green and sustainable development of the dyeing and finishing industry.

 

Enterprises should accelerate the development and application of intelligent manufacturing technologies, develop and apply online detection technologies, digital automation technologies, and MES systems, promote the deep integration of the Internet, big data, artificial intelligence, and the dyeing and finishing industry, and promote the transformation of production models to flexible, intelligent, refined, and highly integrated ones to improve the quality and efficiency of enterprise production management.

 

Second, accelerate the adjustment of product and market structures, shifting from a "scale and quantity" model to a "quality and efficiency" model. Transition from homogeneous competition to differentiated and personalized production, from sample imitation to design and R&D, and from low-to-mid-range products to high-quality products. Shift from processing trade to controlling sales terminals and creating independent brands, from meeting demand to creating demand, and from outsourced processing to self-operated trade and independent brands in market structure.

 

 

Third, improve industry management levels, shifting traditional industry management from a "rough" model to an "intelligent" and "refined" model. Steadily promote lean management, and carry out 5S site management, quality system management, standardization, and other lean management work to improve quality, reduce costs, increase efficiency, and achieve efficiency through lean management. Accelerate enterprise informatization construction, accelerate the application of ERP, MES, PLM, SCM, CRM, and other management systems, improve information and intelligent management levels, improve enterprise production and operation efficiency, reduce operational risks, reduce operating costs, increase enterprise profitability, and enhance sustainable operating capacity.