Foshan Garment Industry Less Than 1% Gross Profit Margin Survey Of Foreign Trade Enterprises

Guangdong, China's first export province, faces unprecedented pressure.

Xu Yue, director of the Guangzhou customs office, told the Securities Times reporter that the total value of Guangdong's import and export trade in the 1-4 months of this year was US $207 billion 380 million, an increase of 14% over the same period last year, which is lower than the 24.4% increase in the whole country.

A series of unfavorable factors have come to the end. The appreciation of RMB, the rising price of raw materials and the rise in labor prices, coupled with the lowering of the export tax rebate rate and the continuous rise in lending rates in recent years, make the small and medium sized foreign trade enterprises which do not have strong competitive advantages become more difficult to survive.

Less than 1% of gross profit in Foshan's clothing industry.

"Textile and garment industry is an unprecedented difficult period. In the first two months of this year, Foshan's textile and garment industry lost 50 million yuan in profits in the first half of this year due to exchange rate losses caused by the appreciation of the renminbi."

Wu Haoliang, Secretary General of Foshan Textile Industry Association, told our reporter that the total export volume of textile and clothing in Foshan last year was about US $more than 2 billion 300 million, but the profit loss caused by RMB appreciation last year was as high as 500 million yuan.

Wu Haoliang said that at present, the textile and garment industry has almost no profit, and even many enterprises have already faced a situation of losing money, but no one dared to raise the price.

"I am not very hopeful about this year's export growth."

Foshan's clothing, textile and garment enterprises will once again shuffle, and some of the owners of textile and garment enterprises are looking for another industry development.

When reporters visited the town of Zhang Rui in Chancheng District, Foshan, known as "the first knitting town in China", the factory shops which were flourishing and lively were mostly cold and cheerless, and workers in twos and threes were swinging in the streets.

Both sides of the street are empty buildings. The reporter roughly counted that at least 25 factories in the 200 meter long street were closed.

"There will be no less than 100 enterprises in the whole town of Zhang Ling," Wu Haoliang said. The average gross profit of the textile and garment industry in Foshan is estimated to be less than 1%.

"It's almost the most difficult time."

However, many enterprises reflect that the space for the increase of digestion cost is rather limited. Under the condition of international market downturn, it is more and more difficult to pfer the cost through raising the price, and the export profit margin falls or even loses.

Many export enterprises appear to be afraid to pick up or simply change the list.