Under pressure of cost: apparel textile companies will have to "fly southeast"

Industry sources said: China is no longer a country with low labor costs a few years ago. This may be a good thing for the broad masses of people, but it is a disaster for the traditional textile industry. Recently, the data show that garment and textile enterprises have moved southwards, together with Xiaobian to learn more.

The continuous sluggish demand in the international and domestic markets, and the rising cost of comprehensive factors represented by labor costs, are causing textile and garment companies to face unprecedented pressures for survival. Some well-known clothing brands and listed textile companies are in operational difficulties. Many SMEs Faced with the risk of failure. For the entire textile and apparel industry, a big reshuffle may be difficult to avoid.

Recently, according to the latest news, confirmed by Adidas, the company will close its last direct factory in China. Does this mean that it has sounded the alarm for China's textile mills?

“China is no longer a country with low labor costs a few years ago,” an industry source told reporters.

It is worth mentioning that Adidas was once accused by London Olympic Organizing Committee of its "sweatshop" in Cambodia. The company responded at the time that its factory workers in Myanmar had a monthly salary of 130 US dollars (approximately 828 yuan). In contrast, the average monthly salary of the company's Suzhou factory is no less than 3,000 yuan, which is 3.6 times the monthly salary of Myanmar workers.

Relocating to compress labor costs "As early as several years ago, especially after the financial crisis of 2008, international brand companies began to move their factories in China to Southeast Asia." The above-mentioned industry insiders told this reporter that "these For international brand companies, where labor is cheap, they will move."

In August 2008, France’s Le Figaro reported that due to rising wages in China, Adidas is preparing to shift production of some products from China in order to reduce production costs. The report also pointed out that adidas President Haina had publicly stated that Adidas has more than 50% of athletic shoes produced in China. However, due to the current rising wage requirements of Chinese employees and increasing production costs, the company intends to reduce production in China in the future. proportion.

Although Hainer stated that it would reduce its production in China, it later responded that "the number of foundries produced in China will never decline, nor will it shut down any market in China."

According to industry insiders, Adidas will close the company's immediate production plant and the foundry's factory will continue. Because, Adidas only need to place orders for OEMs, do not have to consider the issue of labor costs. In other words, Adidas passed on the rising cost of labor costs to the foundry's home. Considering the orders, the profit can only be reduced by the OEM.

In addition to Adidas's factory relocation, in March 2009, Nike, the world's largest sports brand, also closed its Taicang factory, which is the sole footwear production facility owned by the company. The footwear production business managed by Winterthur Group will be transferred to Winterthur. Factory in other parts of Asia.

Ma Gang, an independent commentator on the sports industry, said that this is a signal of "major transition and transformation". Adidas announced its withdrawal at this node, which is caused by the laws of the market and the industry's cycle. “The end of the demographic dividend era makes garment processing companies face transformational choices. ODM (Original Design Manufacturing) is the most basic and practical choice in China.”

“Given that the textile and clothing industry is a labor-intensive industry, adidas, Nike and other companies are paying more attention to labor costs in terms of cost reduction, and of course do not rule out transportation costs after moving to Southeast Asia.” The above-mentioned industry analysts explained to reporters, “With the With the increase in labor costs, I believe that in the future there will be factories in China moving to factories in the Midwest or Southeast Asia.”

According to statistics, China’s labor cost is twice that of Southeast Asia. At the same time, research data released by the French Textiles Association shows that the average wage of employees of Chinese textile companies is 188 to 300 euros, which is much higher than Bangladesh, which has around 80 euros in the countries with the lowest wages in the textile industry.

The south of the clothing and textile enterprises is precisely the reason why the brand companies are pursuing the maximization of profits, and the low labor force has achieved the history of the “sweatshop”. According to foreign reports, in order to produce products related to the London Olympics, Adidas's factory in Cambodia allows workers to work up to 10 hours a day, 6 days a week. The workers said that their work environment is harsh. If they work eight hours a day, six days a week, the monthly salary is 61 US dollars, and another 5 US dollars.

It is reported that Adidas has accumulatively invested 100 million pounds in the Olympic Games. The London Olympic Organizing Committee had signed an agreement with Olympic goods manufacturers that required Olympic sponsors to provide workers with adequate basic living security wages. The "Trademark behind the Labor League" stated that Adidas’ wage treatment to Cambodian workers violated this agreement.

The above-mentioned industry sources stated that the reason why Adidas runs a factory in Myanmar is that the local labor costs are low and the wages are low.

In response, Adidas publicly responded on the 13th that the average wage of this factory worker is 130 US dollars, and the salary will be increased at the end of the year. However, some stakeholders believe that this Cambodian factory has violated the provisions of the London Olympic Organizing Committee, that is, sponsors must pay workers for sustainable and guaranteed wages.

A spokesman for the London Olympic Organizing Committee said in an interview with foreign media that the Olympic Organizing Committee places great importance on the allegations and will investigate the matter.

It can thus be seen that regardless of whether it is due to labor costs rising and leaving China, or hiring workers at low prices in Cambodia, it can be seen from the various behaviors of Adidas that in order to save on labor costs, the low-cost and high-profit marketing concept of international brand manufacturers has been exposed.

It is noteworthy that, in addition to Adidas and Nike will be transferred to factories in Southeast Asia, Clarks, K-Swiss, Bakers and other international footwear giants have been added in Vietnam, Indonesia's production line.

In June this year, 13 Chinese textile companies, including the well-known Tianhong Textile Group Co., Ltd., dispatched representatives to Indonesia to find a suitable site for construction. Based on this, Southeast Asia has set off an upsurge of spinning and building factories.

It is understood that as a result of Southeast Asia's products have more price advantages, China's textile export enterprises have been affected. Faced with the price shocks in Southeast Asia, there are textile company owners proposed to build factories in Southeast Asia, to make up for the disadvantages of the price.

Relevant person in charge of the textile company told reporters that domestic orders for low-end export products have been reduced by 1/3 this year, and many orders have been stolen by companies in Southeast Asia.

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