Hongjing

China has always had a large number of printing and dyeing enterprises, but most are small and medium-sized enterprises. Many small and medium-sized printing and dyeing enterprises lack the capacity for research and development innovation and environmental protection investment, and the proportion of high-value-added products is not high. Therefore, the industry as a whole faces the situation of low market concentration and fierce market competition.

In recent years, with the continuous advancement of "supply-side structural reforms" and the deepening of industrial transformation and upgrading, advanced dyeing and finishing technologies have been continuously applied in the industry, and energy comprehensive utilization technology, wastewater treatment and reclaimed water reuse technology have been gradually promoted, promoting energy saving and emission reduction, technological progress and technological innovation in the printing and dyeing industry, optimizing the industrial structure, and improving the industry concentration. In this process, the competitive advantages of leading enterprises are generally obvious.

However, undoubtedly, since this year, the epidemic that has lasted for more than half a year is rewriting the development trajectory of many printing and dyeing enterprises. In the first quarter of 2020, affected by the epidemic, domestic and foreign demand in the textile market weakened, most enterprises had insufficient production, and the prices of some enterprises' products or processing fees decreased. Coupled with the inelasticity of expenses such as wages and rent, as well as the increase in epidemic prevention and control and logistics transportation costs, the profitability of enterprises has significantly decreased. Data released by the China Printing and Dyeing Industry Association shows that in the first quarter, the main business income of large-scale printing and dyeing enterprises in China reached 48.535 billion yuan, a decrease of 23.64% year-on-year; the total profit reached 1.213 billion yuan, a significant decrease of 43.08% year-on-year.

From the actual situation of Zhejiang Furun, although the announcement of the transfer of textile printing and dyeing assets currently conforms to the company's major strategy, after all, both subsidiaries are still profitable. Therefore, the severe situation of the printing and dyeing market since this year may have accelerated its determination." said an insider.

Generally speaking, when enterprises face a relatively tight capital chain situation, selling some assets and equity to realize assets and obtain sufficient cash flow is a good choice." Some insiders believe so. Other insiders pointed out that there are opportunities in crisis. Choosing to expand printing and dyeing capacity at this time will further consolidate the industry's position, stimulate the enterprise's internal driving force, and expand the market.

Regarding the future market, Lin Lin, secretary-general of the China Printing and Dyeing Industry Association, said that positive factors are continuously emerging in the industry, and the situation is gradually improving. "Domestic support policies are being gradually implemented and continuously exerting efforts, the domestic epidemic prevention and control situation is continuously improving, the order of production and life is accelerating its return to normal, and some suppressed consumer demand in the early stage is gradually being released. In May, the profit growth rate of large-scale industrial enterprises in China turned from negative to positive, and the printing and dyeing industry has improved its resilience after responding to the epidemic." However, she also pointed out that due to the continued spread of the global epidemic, the pressure on China's textile supply chain and ecological chain, and the difficulty in significantly improving the global textile and apparel consumption demand in a certain period, will bring difficulties to enterprise business planning.

"Printing and dyeing enterprises should actively adapt to changing trends, seek opportunities in crisis, and adapt to the new situation and major changes." Lin Lin concluded that although the current external situation is complex, overall, China's textile and apparel industry is still in an important strategic window of opportunity and has the industrial advantage of full industrial chain closed-loop innovation capability. She predicted that the operation of the printing and dyeing industry will improve in the second half of the year and is expected to gradually return to stability.

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