See the development of the global spinning industry from the 2016 imported yarn forum

As the production costs of labor and raw materials continue to increase, the international competitiveness of Chinese spinning companies in the low-end products sector has gradually weakened, and products from India and Pakistan have seized market share. At the same time, the scale of Vietnam's spinning production has expanded and become a force that cannot be ignored. How will the global spinning industry structure change? How should China's spinning enterprises transform and upgrade ? What inspiration can the transformation of the US and Chinese Taiwan textile companies bring to us?

In 2016 imported yarn forum held recently, the guests on competitive advantages and development planning spinning industry in the region, how to win-win cooperation and other topics of exchange and discussion. It is not difficult to see the development direction of the global spinning industry.

India, Vietnam and Pakistan have their own advantages

Pure cotton yarn imports from the country to see the source of China, India, Pakistan, Vietnam's top three. In 2015, India imported the largest share of pure cotton yarn, with Pakistan and Vietnam ranking second and third. The data from January to April this year showed that the proportion of pure cotton yarn imported from Vietnam increased rapidly, surpassing India and becoming the first. Will India’s leading role in China’s import yarn source be shaken?

Vice-Chairman of the Indian cotton textile products Export Promotion Council (TEXPROCIL) Ujwal R.Lahoti analysis of the advantages the Indian spinning industry. India is the world's largest cotton producer, with cotton production relative to excess spinning capacity, making it a raw material advantage, and India has a world-class textile industry, equipment manufacturers and the youngest production managers. India has the ability to increase production efficiency through high-tech production and produce higher quality yarns to produce more competitively priced yarns.

Ujwal R. Lahoti believes that cooperation between Indian and Chinese textile producers is necessary. Given India's existing and existing advantages in textile manufacturing, the convergence of Chinese textile entrepreneurs with the Indian supply chain is beneficial. At the same time, due to the advantages of China and India in different raw materials, the two sides can complement each other in the raw materials. The rational use of the advantages of Chinese textile companies in Indian yarn and grey cloth enterprises is conducive to enhancing the competitiveness of Chinese textile enterprises. After the integration of the Chinese textile supply chain, the Indian textile industry will become the most competitive textile industry in the world. China and India have finally achieved mutual benefit through investment cooperation.

Dharmendra Goyal, general manager of Tirupati Yarns in India, believes that India has an advantage in terms of production costs, exchange rates, etc. If cotton yarn production is effectively improved, then Indian cotton will be more competitive. He suggested that Indian cotton yarn should reduce its dependence on the Chinese market and expand globally, especially to other Asian countries such as Bangladesh, Vietnam and Pakistan.

Vietnam yarn market share in fast-growing, China's textile enterprises to go out is also more popular in Vietnam, the Vietnamese market in 2016 if there are more opportunities? Nguyen Van Tuan, chairman of the Vietnam Cotton Textile Association (VCOSA), said that the TPP and EVTTA agreements will bring long-term benefits to the Vietnamese textile and apparel industry. At present, Vietnam's garment export destination countries, the United States accounted for 47 percent of US textile imports from Vietnam's average tariff of 17.5% (range 12% to 32%). According to the TPP agreement, if the "Yarn Forward" rule is met (the yarn from the production of fabrics is produced in Vietnam), the import tariff will be cancelled. Vietnam's garment exports to the EU accounted for 15%, the current EU imports from Vietnam's average tariff of 9.6%. After the entry into force of the EVTTA Free Trade Agreement, import tariffs will be cancelled within seven years.

According to the plan, the number of workers in the textile and garment industry in Vietnam will reach 5 million in 2025, the spindle will reach 17.9 million spindles, the fabric output will reach 12 billion square meters, and the export volume will reach 50 billion US dollars. From 2000 to 2013, the foreign direct investment of the textile and garment industry in Vietnam was 8.2 billion US dollars. From 2014 to 2015, the foreign direct investment of the textile and garment industry in Vietnam reached 5.8 billion US dollars.

Pakistani cotton yarn once occupied the largest share of China's imported yarn, why has it shrunk in recent years? Is there any potential for improvement? Ahmed Ellahi, general manager of AA LEATHER, believes that Pakistan is currently facing a decline in cotton production (down 34% this year), and there is no tax rebate for exports, making it difficult to obtain support for research and development. In addition, the investment in the Turkish spinning industry has increased significantly, making Pakistan face fierce competition. But it is undeniable that Pakistan still has its own advantages.

The development goal of the Pakistani textile industry is to increase the textile export volume from US$13 billion to US$26 billion by 2020. The proportion of the textile industry in GDP has increased from 8.5% to 10% in the global textile and apparel export market. share increased from 1.8 to 3 percent, employment in the textile industry increased to 30 million from 15 million to double the textile industry, new investment of $ 1 billion / year.

Transformation experience in Taiwan and the United States

For Chinese textile companies, the requirements for transformation and upgrading are currently very urgent, but how to transform? The transformation of the textile industry in Taiwan and the United States may provide a reference.

Huang Weiji, Secretary General of Taiwan Textile Extension Association, introduced the development of Taiwan's textile industry. In the 1990s, Taiwan's textile industry faced internal and external competitive pressures. In 2000, the Taiwanese textile industry in China formulated a development strategy that followed quickly. First, follow the "goose-type theory" and follow Japan to develop functional chemical fiber. The second is to promote the re-engineering industry competitiveness plan, assist textile industry to improve financial and financing mechanisms, accelerate investment; promote the construction of overseas bases, enhance the competitiveness of the international market, strengthen R&D investment and enhance technical capabilities; fully implement electronic rapid response and scientific management Develop industrial manpower, introduce high-tech talents ; combine the advantages of cross-strait textile industry, strengthen the integration system of production and sales; enhance the image of the textile industry and consolidate the foundation for development.

In terms of products, Taiwan's textile industry focuses on the development of innovative functional textiles, mainly used in sports, leisure and outdoor products. In the process of development, it also faces obstacles such as long development cycle and low product recognition. For this reason, Taiwan Textile Extension has established a functional textile verification mechanism (TFT). At present, the TFT verification mechanism has become an industry standard with international standards.

Huang Weiji said that when faced with internal and external pressures, the poor will change and become more common. The industry should encourage each other to work together to replace zero-sum competition and weather the storm. Innovation is the source of power for business development and the cultural characteristics of industry.

After the US announced the manufacturing return plan, the US textile industry once again attracted attention. Xue Fei, Director of Asian Operations of Frontier Corporation of the United States, analyzed in detail the transformation path of the US textile industry.

After the second industrial revolution, the textile and garment industry was once the pillar industry of the United States and a large employer. However, from 1950 to 2001, the proportion of the textile industry in the US GDP was reduced by 16%, and the employed population was reduced by 30%. Although the number of employees has plummeted by about 30%, the output of the textile industry has remained stable, even during the period, and the transformation has achieved remarkable results. Today, in the structure of American spinning products, air-jet spinning accounts for 67%, ring spinning accounts for 20%, air-jet spinning accounts for 10%, and vortex spinning accounts for 3%. The US textile industry mainly realizes specialization and automation through industrial transfer and mergers and acquisitions. It has invested heavily in information systems and management systems, and has been mass-customized. It has realized transformation through the application of information technology and flexible management to meet customer's special needs.

How does the Chinese cotton textile industry adapt to high costs?

In recent years, the prosperity index of China's cotton textile industry is in the 45~50 range, and the industry is running poorly. According to Wang Qingcui, vice president of the China Cotton Textile Industry Association, as the company accelerated its transformation and upgrading and adjusted its products to adapt to the market, the company's operation has stabilized since the fourth quarter of last year, and the prosperity index has risen slightly.

Wang verdant analysts believe that with the improvement of governance requirements of the environment, affected by the cost and quality of cotton, yarn era of high cost of production is inevitable. However, China's cotton textile industry industrial system and industrial chain are complete, and the future domestic demand market still has great potential. It is expected that as the national economic growth continues to slow down, the industry will maintain a low growth rate. The product output fell rationally, the product structure adjustment accelerated, and the technical upgrading and upgrading task was arduous. The supply gap of high-quality cotton is large, and the new cotton policy may be clear; the growth rate of imported yarns will slow down, and domestic cotton consumption may increase; foreign trade will be difficult to recover in the short term, and international trade competition will be more intense.

Wang Qingcui pointed out that under the background of supply-side reform, the adjustment and innovation of cotton textile enterprises are concentrated in five aspects: first, to improve product quality, increase product varieties, and provide effective supply; second, production to digital, continuous, intelligent the direction of development; third, non-cotton fiber reinforced innovation and development capabilities; fourth, the industry chain vertical integration, co-ordinate domestic and international markets; fifth, to enhance the quality of domestic cotton, solve structural contradictions between supply and demand.

Xue Fei compared the situation of the Chinese and American textile industry. He believes that the advantage of China's textile industry is that labor costs are relatively controllable, industry supporting ability is strong, and products are complete; disadvantages are scattered enterprises, small enterprises, low per capita efficiency, insufficient ability to develop new products and technologies, and lack of technology supporting technologies. . The advantage of the US textile industry is to achieve scale, high production efficiency, strong design and technical capabilities; the disadvantage is that production is inelastic and more focused on quantity and productivity.

Xue Fei suggested that China's textile industry should carry out industrial upgrading based on comparative advantages, retain the low-end and low-end, and strive to move toward the high-end and take the road of transformation with Chinese characteristics. Strengthen technological innovation, brand building, and enhance international bargaining power. For enterprises, Xue Fei believes that production-oriented enterprises should lean production and reduce waste. Business-oriented enterprises should be data-oriented and achieve rapid response.