Henan Cotton Association: Three-level differentiation of textile companies

The vigorous textile situation of the past year has made all textile companies profitably. But with the gradual depart of 2010, the days of textile companies are no longer comparable.

First of all, the price of upstream textile raw materials, especially cotton, has not only been operating at a high price of around 30,000 yuan per ton, and the large amount of raw material funds (more than doubled in the past) has caused the cash flow of the company to be greatly affected.

Secondly, the ups and downs of cotton futures prices and the instability of spot prices have led companies to fear long bills earlier and have not dared to take over, resulting in difficulties in sales of most textile companies. Products continue to backlog, inventory continues to increase, the company's cash flow is less and less.

Moreover, the constant changes in cotton prices and yarn prices have directly affected the downstream of the textile companies. They also dare not take goods with ease. There is no suitable opportunity. Wait and see is their temporary choice.

In short, the existence of the above reasons, regardless of the size of the company, has been affected to varying degrees. However, companies are also actively looking for solutions based on their own situation, such as changing the product structure, price promotions, and so on. Judging from the current situation, large-scale textile enterprises are affected by the market because of their strong financial strength and high-end products, and they believe that the current market status is a normal market pattern. Small and medium-sized enterprises are still struggling to support their current product profits because they have reached a critical point. In addition, some small-sized enterprises with outdated equipment technologies have temporarily suspended their work. The market differentiation is a little bit obvious.