China’s textile machinery industry 2017：Worthy of optimistic expectations

By+Zhao+Zihan,Shen+Da

What was the status quo of Chinas textile machinery enterprises in 2016？ How do they regard the market development in 2017？

In order to have a better understanding of business operations， demands and market conditions of textile machinery enterprises， China Textile Machinery Association organized investigating groups this Spring to continuously visit some enterprises in such provinces as Zhejiang， Jiangsu， and Shandong. The investigation was specifically divided into three sectors， including spinning， weaving， and dyeing & printing industries， and accordingly three different groups.

Spinning sector

Suzhou Imagin Machinery Co.， Ltd. Jiangsu Kaigong Machinery Co.， Ltd. Saurer （Changzhou） Textile Machinery Co.， Ltd. Lakshmi Machine Works Limited （Suzhou）

The four enterprises left a deep impression to the investigation team by their development ideas and strategies， such as identifying the market positioning to focus on exquisite products， speeding up the adjustment according to market changes， and seizing the market with technical advantages， further indicating that timely alteration according to changes is the only way for the enterprises to deal with changes in the market.

Suzhou Imagin Machinery Co.， Ltd. has positioned its doubling winder at a medium- and high-end level since the very beginning， and 5% of the annual sales would be invested into product development to provide users with high-quality products. Such a development route has contributed to the sustainable development of the enterprise which has been enjoying three consecutive annual increase at a growth rate of 50%， together with better expectations of 2017. “We will never manufacture low-end products in the future， but must strictly guarantee the product quality from every supplier. Both R&D and market are of great importance in achiev- ing more significant development，” said Yao Weikang， General Manager of the company.

The combing machine from Jiangsu Kaigong Machinery Co.， Ltd. once occupied 35% market shares in China； however， the increasing challenges these years have forced the company to consider more how to better adapt to market changes. As a saying goes， ideas determine the way out. Since the January 1st this year， Kaigong has been making great efforts in comprehensive adjustments， including the establishment of one marketing center and four sectors of combing， auto winding， processing， and real estate.

In terms of its main business combing machine， Kaigong is to focus on enhancing the level of intelligence for an in-depth cultivation of high-quality customers， to maintain the long-term competitiveness of the main industry. Auto winding is to speed up its destocking from a variety of ways. CNC processing resources will be integrated to play intensive advantages. Another point is to make full use of the advantages in the land resources of Kaigong Industrial Park to drive its main business development in a way of lease.

Saurer （Changzhou） Textile Machinery Co.， Ltd. owns the global technology-leading automatic and semi-automatic rotor spinning machine， which presented a good market performance last year and will continuous to achieve a steady development this year. According to Gu Songhua， its Marketing Director， Chinas textile market will have greater demands for automatic and smart equipment in the future under the pressure on the decline in the demographic dividend. Meanwhile， the market competition also requires more on the advanced machinery， which has been driving the company to continuously develop new products and meet the needs of the market. It is learned that in order to meet the larger needs of Chinas textile market， Saurer （Changzhou） Textile Machinery Co.， Ltd. is currently actively taking measures， under the premise of ensuring product quality， to reduce manufacturing costs， continuing to introduce more new products with higher yields， higher quality， less raw materials， less downtime， less demand for labor， and more energysaving advantages.

Lakshmi Machine Works Limited （Suzhou） entered Chinese market in 2008 when the global market was being impacted by the severe financial crisis； however， they still resolutely decided to build factories in Suzhou， China. “We had not sold one set of equipment in China before， but we saw the potential and demand of the Chinese market， for China saw an increase of more than 11 millionspindle spinning frames from 2006 to 2007， but 70% of them were without automatic doffing. Most were short ones， however， Lakshmi Machine Works Limited has prominent advantages in the automatic doffing of long frame. After investigation of 10 customers， we set the determination to build a factory in China.” Chairman Shang Kean said. Since 2011， Lakshmi has been enjoying a steady development in China. And in the future they will continue to expand the Chinese market based on better and more stable technology. In the workshop of the company， the investigation team was not only impressed by the advanced plant and processing means， more by the plant design that natural light is enough without lighting when it is a sunny day， humane and green. In addition， its electrodusting lines use new nano-technology instead of pickling and other processes， so that the production is more environmentally friendly. It is also introduced that the Lakshmi drawing frame and roving machine also began assembling and sales in China.

During the investigation， the group also conducted a questionnaire survey， showing that the vast majority of enterprises are optimistic about the year of 2017， while in the first quarter this year， they witnessed significantly increasing orders and sales over the same period last year.

Weaving sector

Qingdao Tianyi Group Red Flag Textile Machinery Co.， Ltd.

Qingdao Tianyi Group Red Flag Textile Machinery Co.， Ltd. is one of the busiest manufacturers among the investigated enterprises， seeing orders arranged to this June with very optimistic follow-up orders. According to Bi Quanju， General Manager of the company， the current best-selling machine of the company is the 280cm＼340cm broad width machine， mainly for the new home textile projects， and he believes that currently the upgrading of air-jet loom has been basically completed in Zhejiang province.

Talking about the boom of the current loom market， Bi Quanju stated that it is not no law to follow， and recruitment difficulty is one of the reasons. Last week， he went to Shengze market for research and found that many employers are still suffering recruitment problems and have to upgrade the equipment to reduce labor. Secondly， due to the impact of the terminal market， currently the air-jet looms woven fabric seems more popular than fabrics woven by other looms， which also pushes the companies to buy new equipment.

Bi Quanju said that through the development of these years， many industries and enterprises are paying much more attention to product differentiation， especially in Zhejiang area where the businesses are no longer producing the popular goods without competitive advantages. During his research visiting to the markets in Jiangsu， he found that the local government is indeed actively guiding the enterprises to upgrade the original water-jet looms. In face of various opportunities， the equipment businesses are required to make good profits analysis.

Dyeing and printing sector

Shaoxing Beihai Dyeing and Printing Co.， Ltd. Huzhou Huisheng Machinery Co.， Ltd.

Song Shuiyou， President of Shaoxing Beihai Dyeing and Printing Co.， Ltd. introduced the companys digital printing， microwave dyeing project and the latest progress of the active printing processing as well as the export markets. For the current market environment， Song Shuiyou expressed great pressures， mainly including the environmental protection pressures， the local competition pressure caused by the differences of various environmental management， cost pressures， etc. Therefore， transformation and upgrading for continuous innovation is a must for the enterprises to establish own core competitiveness.

Similarly， Li Ziming， President of Huzhou Huisheng Machinery Co.， Ltd.， is also suffering “pressures” from “order receiving and delivery”， for the “orders are so incredible！” From the second half of last year， the companys flat screen printing machine has been out of stock， and the current order has been discharged to May this year. Li Ziming believed that it is mainly benefited from the increasingly higher and more critical user requirements for product quality as well as more investment into the equipment. In terms of quality requirements， Li Ziming is so strict that the materials must be of the best quality and the innovation and finishing of the core components should be excellent. Therefore， its flat screen printing machine won No. 1 in national sales despite 50，000 yuan higher than the similar products.

Status quo of textile machinery industry in 2016

From January to December， 2016， textile machinery industry realized main business income of 115.852 billion yuan， an increase of 0.51%； total assets of 101.14 billion yuan， up by 1.8% year on year.

In 2016， gross cost turned out to be 108.767 billion yuan， an increase of 0.24%. Among them， main business cost was 98.334 billion yuan， a slight growth of 0.44%， with the proportion of 90.14%； operating expenses reached to 3.104 billion yuan， a year-on-year decrease of 1.74%， with the proportion of 2.85%； administrative expenses amounted to 6.183 billion yuan， down by 1.19%， with the proportion of 5.68%； financial cost registered to 1.141 billion yuan， a decrease of 3.79%， with the proportion of 1.05%.

Total profits of the textile machinery industry realized 7.83 billion yuan， with a year-on-year increase of 8.73%； while the losses of lossmaking enterprises registered 605 million yuan， with an amazing plummet of 25.87%. The percentage of business suffering losses of the industry reached 13.44%.

The fixed investment amounted to 29.922 billion yuan， a year-on-year increase of 10.47%， with the proportion of 2.33% of the whole textile industry， up by 10.43 percentage points year on year.

Chinese Customs released that Chinas total exports and imports of textile machinery amounted to 5.551 billion dollars， down by 8.08% year on year. Among them， textile machinery achieved exports of 2.98 billion dollars， falling by 3.54%； imports of 2.571 billion dollars， a year-on-year decrease of 12.84%.

From January to December， China has imported textile machinery from 65 countries. Form the product category， auxiliary device as well as spare and accessory parts ranked first， with total imports of 587 million dollars， an increase of 4.11%， which accounted for 22.84% of the total. The import of auxiliary device as well as spare and accessory parts， nonwoven machinery and knitting machinery saw positive growth， with the growth of 4.11%， 2.21% and 5.81% respectively.

Chinas imports of textile machinery are mainly from Germany， Japan， Italy， Chinas Taiwan and Belgium， with total trade value of 2.061 billion dollars， down by 16.03%， accounting for 80.15% of the total. Chinas 28 provinces and autonomous regions have a different number of imports. Jiangsu， Zhejiang， Guangdong， Shanghai and Shandong ranked top five in terms of total import value， accounting for 80.35%. Jiangsu Province ranked first with total import value of 735 million dollars， with a decline of 14.86%， accounting for 28.60%.

In 2016， the knitting machinery ranked first with exports of 920 million dollars， up by 0.77% year on year， occupying 30.88%， which was followed by dyeing and printing as well as finishing machinery， auxiliary device as well as spare and accessory parts， spinning machinery， weaving machinery， chemical fiber machinery， and non-woven machinery. The knitting machinery saw the largest decrease of 28.90%.

Chinas textile machinery were exported to 178 countries and regions. India， Bangladesh， Vietnam， Pakistan， Indonesia ranked the top five， which were the major countries and regions for the export of Chinas textile machinery. The export to those countries accounted for 53.31% of the total. The export to India reached to 609 million dollars， down by 2.38%， accounting for 20.42%. Chinas 31 provinces and autonomous regions have a different number of exports. As for total export value， the top five ones accounted for 78.66%， which were Zhejiang province， Jiangsu province， Shanghai city， Guangdong province and Fujian province.

In summary， the economic operation of textile machinery industry still kept a downward trend， with all kinds of indicators hovering at a low level， and the import and export suffered year-on-year decrease.

The textile machinery enterprises increased R&D in intelligent manufacturing， and domestic textile equipment manufacturing enterprises gradually extended to the downstream service， to provide maintenance and support of product lifecycle， and to provide personalized design， ecommerce， as well as other forms of service.

For the international market， South Asia， India， Bangladesh， Vietnam， Pakistan， Indonesia and other countries are still the main destinations of Chinas textile exports. In spite of a good start in 2017， it doesnt mean that it will bounce back soon， for the current economic downward pressure is still large， and the uncertainty of the external environment is still grim.

It is essential to improve the vitality of the micro economy by expanding the aggregate demand， increasing the order of enterprises， promoting the reform of the supply front， reducing the comprehensive cost， as well as improving the profitability of enterprises.