Sewing machinery industry: problems behind rapid development

From 2010 to the first quarter of 2011, although the sewing machinery industry was affected by many unfavorable factors such as the shortage of labor resources, energy resources and other resource factors, and prices, the economy of the whole industry still experienced unpredictable recovery and high growth. The volume, import and export value have all rapidly increased. Many economic indicators in 2010 exceeded the historical highest levels in 2007. At the same time, many good signs have emerged in structural adjustment. The ratio of electromechanical integration products has been greatly improved. The lever of the industrial chain shifted from the complete machine to parts companies gradually, and all the advantageous enterprises have developed faster. However, behind the rapid development of the industry, there have been some hidden concerns.

Mechatronics demand doubled In 2010, driven by the downstream garments, luggage and other industries, China's sewing machinery industry ushered in a strong recovery, production and sales to achieve a recovery of high growth. According to the China Sewing Machinery Association, based on the National Bureau of Statistics and Customs data, the total output of sewing machinery in 2010 was 15.96 million sets, an increase of 36.41% year-on-year and 89.6% in 2007. Industrial machine output increased by 68.17% year-on-year. Restored to 94.8% in 2007, the output was close to the best level in history in 2007; the total industrial output value and export volume increased by 83.6% and 36.21% year-on-year, respectively, compared with 2007, they increased by 34.1% and 6.7% respectively, both of which broke the historical highest level. A record high.

Industry insiders believe that the reasons for the record high output value are as follows: First, the overall rapid growth in output brought by the strong recovery of the market has laid a solid foundation for recovery; Second, the industry product structure in the past two years to the middle-grade special machine and mechanical and electrical integration The adjustment of products will greatly increase the level of value-added products; thirdly, the industrial chain will continue to expand rapidly in the areas of CAD, cutting, cloth, hanging, ironing, laser and seamless stitching to further expand the industrial scale.

It is understood that in 2010, the upgrading of apparel and other downstream industries has accelerated, and the demand for high-efficiency, energy-saving, and special-function mechatronics sewing equipment has increased significantly. High value-added products have gradually become the company’s flagship product and new profit growth point. . According to the statistics of China Sewing Machinery Association, the proportion of sewing machines with electric control devices in total industrial machinery production in 2010 increased from 11.07% in the same period of last year to 25.04% now. Among them, 2010 was the historical inflection point for the rapid development of computerized sewing machines. The total output exceeded 1 million units, achieving an annual output of 1.5 million units, a year-on-year increase of 114.2%, and accounting for 20% of the total high-speed sewing machines. The increase in performance to 36.5% has greatly promoted the development of mechatronics in the industry.

The four major issues have plagued the development Since March 2010, the market demand has only increased, and the sewing machine industry has been recovering faster and faster. Even some companies have set a new historical high. However, labor shortages, recruitment difficulties, rising labor costs, rising raw material prices, and resulting parts and components companies due to shrinking profit margins and slow recovery of production capacity, has become a major factor that plagued and constrained industry recovery and development speed in the recent period. Through the reflection of the most concentrated hot spots in these enterprises, we should see some deep-seated problems that may affect the long-term development potential of the industry.

- The level of profitability of enterprises has declined. Due to the shortage of resources, lack of work, limited power supply and other factors, the production capacity of blanks, parts, and housings of sewing machine parts cannot be increased quickly, resulting in a situation of insufficient supply. The phenomenon of phased shutdown due to missing parts is common . At the same time, due to the overall rise in the prices of social labor and production materials, the profit margins of complete machines and parts companies have been greatly reduced. According to survey data of some complete machines and parts and components companies, compared with 2009, the labor cost of enterprises in 2010 increased by an average of 20% to 25%, raw material costs increased by an average of 25% to 30%, and other costs increased by 15%. However, most parts of the industry maintain the original price. The price of some key parts is only fine-tuned by 3% to 5%, and the price increase rate of the whole machine is only about 2% to 3%, which cannot effectively absorb the rapid increase in the cost of various factors. Currently, the overall profitability of the industry has generally declined. The average net profit of key enterprises is only about 6%, and the industry's sustainable development capability is seriously affected.

-- The parts and components industry is in urgent need of transformation and upgrading. In 2010, the gap in the employment of parts and components companies was further expanded, and the average gap between companies' skilled workers was 15% to 30%. Affected by this, it is difficult for enterprises to rapidly increase their production capacity. According to incomplete statistics, the average completion rate of parts and components companies in 2010 was 70% to 75%, and enterprises urgently needed effective technological transformation. As the cost has risen sharply, product price increases have been difficult, the period for withdrawal of loans has been longer, and corporate profits have declined. The confidence of enterprises for further development and reinvestment has been greatly affected, and the wait-and-see atmosphere is strong. According to a survey of 20 parts and components companies, the average investment used for equipment renewal and transformation in 2010 accounted for only 3% of the output value, which is difficult to meet the current demand for equipment automation upgrades and rapid increase in labor productivity.

- There is a potential downside to product quality. As the supply of products across the board is in short supply, swiftening of speed, production volume, and satisfaction of the market have become the main melody of the company's development. The situation of the whole machine and parts and components companies working overtime has not been eased, and the phenomenon of heavy output and light quality has risen. The China Sewing Machinery Association found that nearly 45% of the parts and components companies clearly stated that the whole machine company has relaxed its parts and quality procurement requirements. According to some machine and component companies, the phenomenon of neglecting product quality among small and medium-sized enterprises is even more serious. For example, parts that have not been completed in the final machining process, have not undergone heat treatment, and even defective products with obvious defects in quality are also “ "Purchasing" and inflowing into the market place great hidden dangers for product quality issues and will have a significant impact on domestic brand image. According to feedback from the distribution industry, complaints about product quality in the industry suddenly increased in 2010.

——The intensity of intellectual property disputes escalated. In the past two years, with the increasingly fierce market competition and the acceleration of the localization of the industry in the field of special machines and electronic control systems, the intensity of intellectual property disputes at home and abroad has escalated. According to incomplete statistics, from 2008 to 2010, only well-known Japanese companies initiated 6 patents for some companies in our industry on computer-stitch sewing machines, computer zigzag sewing machines, computer double-needle machines, cylinder-type stretch sewing machines, and pinning machines. Dispute prosecution, 3 new cases of patent lawsuits have been filed in 2010, and should be highly valued. These patent litigations will delay the adjustment of the product structure of the industry, and will have a negative impact on the production and operation of enterprises, development speed, and brand awareness. It is urgent to strengthen independent innovation, break through patent technical barriers, and quickly get rid of the passive development.

The declining profitability of enterprises has caused labor-intensive sewing machine companies to feel great pressure. In particular, the lack of confidence in the development of parts and components companies has prevented them from investing in production expansion, and has increasingly chosen to diversify production. As the basis of the industry chain, the stability of the parts and components companies is related to the development of the entire industry. There are more and more patent disputes among domestic companies, and companies have also increased their mutual protection. The decline in product quality is fundamentally due to the fact that the situation of insufficiency in supply has caused customers and distributors to loosen their quality requirements to a certain extent. As a result, companies are more or less psychologically lax, but short-term profits are in return. Brand reputation and even the loss of industry image.

The above four points are of course the most prominent issue in the current industry. However, from another perspective, there is no lack of opportunities to see who has the strength to persist in the key moments of the current transformation and upgrading. To have the power, we must improve the technological content, quality, and added value of our products, and rely on independent innovation to transform our development model.