It used to be one of China's top 500 enterprises, once supporting half of Cixi's foreign trade. Due to good welfare, we organize tourism every year and receive year-end bonuses at the end of the year, making us recognized as a 'company owned by others' in Cixi. However, recently, there was a notice circulating among the Cixi community, signed as Cixi Import and Export Co., Ltd., stating that it was planned to negotiate the termination of labor relations among all employees, and no longer pay wages from July onwards. In the blink of an eye, it collapsed.

Ningbo Cixi Import and Export Co., Ltd

According to the company's official website, Cixi Import and Export Company was established in 1988 with a registered capital of 185 million yuan. It ranked among the top 500 Chinese enterprises in 2003 and 2004, and also entered the top 500 Chinese enterprises with the largest import and export volume 12 times in a row. It has been awarded the titles of National Advanced Collective in the Business System and National Advanced Enterprise in Foreign Trade Quality and Efficiency. Our main business includes 6 categories of products, including bearings and automotive parts, hardware and plumbing, home appliances and electronics, textile and clothing, luggage, shoes and hats, and light industrial processes.

Why did the celebrity enterprise collapse?

The saying in Cixi is: being dragged down by the real estate market.

There is a Hengyuan Yuecheng real estate development in Cixi, developed by Hengyuan Real Estate under Cixi Import and Export Co., Ltd. The real estate market was good in 2010. As the only 70 year old residential property in the Cultural and Business District, Hengyuan Real Estate invested heavily in the development of Hengyuan Yuecheng. According to a document from the Cixi Development and Reform Bureau, the total investment of Yuecheng No. 9 project was 3.18 billion yuan, with self raised funds and bank loans as the indicated method. But after the construction started in 2012, the real estate market was sluggish and sales of buildings encountered bottlenecks.

According to shareholders' understanding, in addition to the real estate project of Hengyuan Real Estate, Cixi Import and Export Company has also invested heavily in the German REV project, Argentine investment, Tianjin Samsung Camera, Zhenhai New City real estate, and some hotel investment projects, all of which have suffered losses, resulting in a broken capital chain, difficulties in payment of goods, and a situation of insolvency.

It can be seen that foreign trade aircraft carriers were once unable to withstand the temptation of the market and made many diversified investments. In a favorable year, they could also tear down the east wall to pay the west wall. In times of market recession, diversified investments neither maintained the textile main business nor made money from investments. It can be said that they lost both the textile lady and the textile capital, which is sad and lamentable.

Textile trends have changed

Due to factors such as differences in cotton prices and labor costs, there has been a continuous loss of low-end orders in China's textile industry in recent years;

The traditional advantage of low cost in China's clothing foreign trade is gradually disappearing, and more and more clothing orders are accelerating their transfer to Southeast Asia. In order to reduce production costs and increase export profits, some export oriented clothing enterprises in China have also chosen to establish factories in Southeast Asia;

With the disappearance of the demographic dividend, the transfer of foreign investment in China's manufacturing industry has also begun to shift. The low-cost competitive advantage of Southeast Asian countries, represented by Vietnam, forces China's textile industry to undergo industrial upgrading, structural adjustment, and keep up with the times, otherwise it will be eliminated by market trends.

Is the textile industry really failing?

In 2008, when the textile industry was facing a difficult and challenging period of global financial crisis, European debt crisis, widening cotton price gap between domestic and foreign countries, rising labor costs, and huge market environment pressure, Texas Hengfeng Textile Co., Ltd. unexpectedly rose against the trend, from carrying a debt of 160 million yuan, from 70000 spindles to 750000 spindles, from one factory to a group with 17 subsidiaries, from a debt ratio of 150% to a total asset of 1.5 billion yuan, From 2800 employees to over 7000 employees, Hengfeng has been restructured for 5 years and successfully countered with actions. The scale of the enterprise and the achievement of profits, taxes, and export earnings have reached new historical highs, creating a myth of 5 years multiplied by 1. These shining achievements of Hengfeng Group describe the hardships of the past, demonstrate the trajectory of innovative development, and also show us how to grasp market trends and transform and upgrade in the changing textile environment.

Hengfeng Group has invested in Ningxia along the the Belt and Road strategic plan. At present, the total investment of Ningxia Hengfeng Textile Project has increased to 2.5 billion yuan. In two and a half years, four workshops, three spinning mills, and one weaving factory have been established. Ningxia Hengfeng Group has been established, and a complete industrial chain integrating textile, printing and dyeing, and clothing has been established. There are approximately 300000 spindles and 288 looms, including 72 large jacquards. At present, the first industrial park of Hengfeng Group has been completed, and a second industrial park is being planned and constructed. On December 12, 2015, Ningxia Hengfeng Group signed a development project with Litong District for "one million yarn spindles, one thousand looms, and ten billion yuan output value, ultimately reaching a scale of one million spindles.

The main business revenue of Dezhou Hengfeng Group has increased from 32nd in 2012, 23rd in 2013, 15th in 2014, to 10th in 2015. Dezhou Hengfeng Group has reached a new level every year and successfully ranked 10th in the country in just 4 years. And the main business revenue of chemical fiber short fiber blended yarn continued to maintain its leading position in 2015 after ranking first in 2014. Hengfeng was constantly expanding while also upgrading and strengthening. In the three years when the overall situation of the national textile industry was not optimistic, Dezhou Hengfeng Group produced such a report card, which is truly exciting. At the same time, it also pointed out to us that in the new market environment, looking forward, All industries are facing duplicate construction and low price competition, and the situation is not optimistic.

afterword

The textile industry, as one of the four basic needs of human beings for clothing, food, housing, and transportation, although it is the sunset, it never sets. Therefore, textile enterprises must strengthen their efforts in product and technological innovation, and also pay attention to relevant national policies. Even if diversified investments are made, they should try not to be too scattered, especially if they are not familiar with it.