Chemical Fiber Enterprise: Pulling the curtain off the stage

Chemical fiber industry in this round of troughs, the fierce competition is not experienced by many companies. Under the influence of overcapacity expansion and weak demand, the industry is accepting the baptism of the market elimination mechanism. Staged surplus and structural imbalance make the industry painful, but at the same time it is also a manifestation of market self-repair and promotion. Some companies declared bankruptcy either by mergers and reorganizations or by selling losses on light businesses and opened the curtain of exiting the industry.

As Duan Xiaoping, president of the China Chemical Fiber Industry Association, said, to respect the mechanism for the survival of the fittest in the market, it is necessary to open channels for mergers and reorganizations so that industry development can be improved in this round of reshuffling. At the same time, some experts also said that although the company withdrew from the industry or part of its business, the production capacity is only in circulation, and it has not yet been possible to withdraw from the market to digest the production capacity. However, the accumulation of assets in advantageous companies will make the stronger ones stronger, and giants with international competitiveness will be formed in the chemical fiber industry. The division of labor across the industry will become more clear.

Withdraw from market compliance

As an industry with a high degree of marketization, chemical fiber, cyclical ups and downs and the success of the company's success is normal. However, since the third quarter of 2011, the market has entered a period of deep adjustment due to the looming and long period of time. A number of business executives told reporters that the market elimination mechanism will be fully demonstrated this year, and the industry reshuffle will fully emerge.

During the spring survey, enterprises in the Zhejiang region generally stated that the fierce competition in incandescence is distinguishing between the strong and the weak. “Anyone who is nude is going to be able to see it immediately.” The senior management of a chemical fiber company talks about the speed of competition in the year. The price of the post said.

Exit mechanism is starting up. Jilin Chemical Fiber previously announced that the company will transfer 98.645% of the shares held by Hebei Jihe and 50.33% of Hunan Tuop to Jilin Railway Investment and Development Co., Ltd., and Xinmin Technology announced recently that it will reverse its performance loss as soon as possible. The status quo, the company decided to plan a major asset restructuring, plans to sell the chemical fiber business and printing and dyeing business as a whole. In addition, Qilu Chemical Fiber Group entered the bankruptcy process in April, and Yizheng Chemical Fiber Co. also shut down some of the polyester filament business.

This is only the tip of the iceberg. Some SMEs that have not entered the field of vision have opted out before the market will. “I know there will be such a day in my heart. There is no way.” The person in charge of a small company reluctantly stated that neither the technology nor the scale can be compared with the big companies. The business transformation has not been successful and can only be turned to another line. Before that, he told reporters that he would insist on it again, but now he chose to withdraw from the market. In Jiangsu and Zhejiang provinces, some enterprises entered the equipment for various reasons in the earlier period. Now the situation is not good. It is hoped that advantageous enterprises or companies with needs will integrate and avoid greater losses.

For large companies, it is also wise to abandon the loss-making business. While optimizing assets, it is possible to establish and consolidate core competitiveness. Jilin Chemical Fiber said in the announcement that the disposal of inefficient loss-making assets will curb the company’s losses. A company official of Yizheng Chemical Fiber Co., Ltd. said that the company can get rid of its burden by eliminating its backward equipment, and the overall competitiveness will be improved. In the future, Yihua will focus on differentiated high value-added polyester staple fiber.

Reasons for loss of competition

The “slow one shot” is the main reason why a number of companies have told reporters that they have lost competition. The single-fiber production capacity of the chemical fiber industry ranges from 100 tons to 10,000 tons. The improvement in technology has contributed to the company's courage and knowledge. Investment in advanced technology has taken a temporary wait-and-see attitude, resulting in a lagging behind, and there have been many examples of mergers and acquisitions that have finally emerged. An example of a company in Zhejiang Tongxiang divided by two other companies is a vivid interpretation.

The chemical fiber industry, as an intermediate product, follows the basic rules for the scale to win, and the timing of the expansion is crucial. “We cannot completely say that everyone is irrational, and those who do not expand at that time will die earlier.” The person in charge of a company in Zhejiang said that when scale benefits are available, non-expansion can only be priced by other companies. Crush dead. Moreover, energy expansion is also a symbol of a company's strength, and it may be difficult to turn over in one step. For those companies that have not looked at the market and have just expanded into the down channel, they have not been able to grasp the pulse of the market.

Management is ossified and the seller's market is used. Passiveness is another factor that causes companies to fall into a predicament. From last year to this year, a number of companies have stated that the company’s sales position is increasing, and personnel training input has increased. In the down cycle, the preemption of the market becomes more intense and a good sales team becomes more important. However, some enterprises with rigid management have failed to keep up with the pace of the market in job creation and functional changes, and the operation of enterprises has been difficult. At the same time, details management can not be profitable but also become a competition point, energy saving and emission reduction and optimization of technology can be done, test the management level of the enterprise.

In addition, how to deal with the debt crisis is the key to business survival. The use of mutual loans by chemical fiber companies is common, and companies often experience sudden debt risks. A few years ago, a certain chemical fiber enterprise and private company Shenyang Group secured each other, and the guarantee amount was about 100 million yuan. Shen Yang Group suddenly emerged as a capital crisis. At this time, it was the period when the chemical fiber company's capital chain was the most tense. Because the bank loan was not issued and could not be repaid in time, this chemical fiber company was burdened with a heavy burden of interest. When the chemical fiber company checked the collateral inventories, the bank found that the current assets had decreased and the inventory was insufficient. The legal procedure was started immediately. After hearing the news, other banks also started legal procedures to seize the entire company’s funds, inventory, and bank accounts. . In the end, all the chemical fiber companies stopped production, production and sales systems were paralyzed.

Stronger resource accumulation is stronger

“At present, the echelon in the chemical fiber industry is very obvious. Large-scale enterprise groups are forming,” said one expert.

After China’s chemical fiber industry experienced many rounds of survival and its elimination, funds and technology are accumulating in large companies. While some companies choose to withdraw, others are busy integrating resources and determining direction.

Experience in this area can refer to neighboring countries. For example, in 2006, Korea’s chemical fiber industry was hit hard by falling demand. At the Korea Fiber Industry Strategic Preparation Conference, South Korean fiber companies stated that the only way out of the country’s chemical fiber companies is to accelerate the pace of product structure adjustment, that is, to reduce the production equipment and output of general-use chemical fiber products, and to expand industrial highs. Added value for chemical fiber products. South Korea's industry statistics show that in 1971 Korea’s textile and textile exports accounted for 41.6% of Korea’s total exports, fell to 22.7% in 1990, and dropped again to 4.9% in 2005; its share in the international market was in 1988. It's 8.3%, but dropped to 3% in 2005. In order to reverse this trend, South Korea proposed that by 2015, the proportion of high value-added products for industrial use accounted for 55%.

China's chemical fiber industry also faces such problems as excessively rising labor costs and weak domestic demand. Unlike the situation in South Korea that year, South Korea faces the rise and competition of the Chinese market. At present, China does not meet tough opponents. Therefore, the capacity issue has not caused the chemical fiber industry to lose its competitiveness on a global scale. On the contrary, while accelerating the accumulation of capital in the industry, the industry’s competitiveness has been strengthened. Moreover, on the one hand, technological development has enabled the company to achieve surpassing, on the other hand, it has built up higher barriers, and latecomers’ participation and surpassing have become difficult. Therefore, China's chemical fiber industry will also enter the peak period driven by demand.

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