The shortage of labor costs in enterprises and the crisis in the clothing button industry

Since 2008, the financial crisis has caused many orders for garment export enterprises in China to drop sharply. Many enterprises have closed down or even went bankrupt. This year, the global economy is gradually recovering. Is the life of clothing button export enterprises better than some?

Benefiting from the recovery of the international economy and the shrinking of the capacity of the southern industry, the orders of most clothing button companies in this year have increased significantly compared with last year. However, what is surprising is that although the order is not smashed, some companies have new troubles: some orders are not daring to pick up. If there is an order, there will be money to make it. Why should the company let the "meat" of the mouth fly away?

Cause: Cost increases, labor shortage

It is understood that a number of rising costs and continued labor shortages are the main reasons why companies are afraid to accept. "Compared with this time last year, this year's apparel fabrics have risen by an average of 15% to 20%, water and plastics have risen by 10%, and production costs have increased by about 3%, and labor costs have risen by 10% to 15%." Zhang Fa, deputy general manager of Dongguan Fuming Button Co., Ltd. said, "Of course, we have learned that some customers' products have also increased by about 10% after export, but they still can't offset the increase in costs. In addition, the depreciation of the euro also makes them Lost about 5%."

Because the main export to Japan, the settlement currency is the US dollar, Dongguan Fuming Button Co., Ltd. did not suffer much exchange rate losses. However, because the wage increase of workers is as high as 30% to 40%, Zhang Fa said frankly that this year the factory piece will definitely not make money, and the profit can only be found from the trading company; the two comprehensive, the profit will be 10% lower than the normal year.

But what really affects the enthusiasm of the signing is the uncertainty of expected profits. “Although the delivery is only half a year later, the price has to be fixed at the time of signing; if the late cost rises too much, we have to take the risk of reducing profits or even losing money.”

At the same time, although wages have increased a lot, the workers' gap is still large. "The general gap is about 20%, and some small enterprises even have a gap of 50%. There are not enough people, the capacity is reduced, and there is concern that they cannot be delivered on time. It is also an important reason why companies have no choice." Zhang Fa introduced that this year her company bought this year. A large number of automatic equipment such as automatic button machine, but the delivery delay rate reached more than 50%.

However, delivery delays are not the responsibility of apparel companies. “Upstream textile companies are facing the same labor shortage. The date we received the fabrics is already a lot late.” Zhang Fa said helplessly.

Outlook: Can you upgrade this?

Although there are a lot of helplessness, the results seem to have a reason to be delighted: clothing companies can receive orders selectively! Some people are optimistic that China's garment export enterprises can use this to achieve structural transformation and gradually eliminate low added value. The part that adds a high value-added part. Will the facts develop as we expected?

Regarding this optimistic expectation, Zhou Jun expressed his reservation: "This is indeed an opportunity for upgrading, but whether it can turn the opportunity into reality, but also rely on the support of the external environment, which includes both national policies and Including the international and domestic economic environment, but these have a lot of uncertainty."

Zhang Fa’s opinion is more conservative: “As far as the current situation is concerned, which order we choose to take, we cannot use the high value-added and profit-making as the first standard, but the size of the customer, the length of cooperation and cooperation. Satisfaction is the first standard. Secondly, although the price of our products has indeed increased due to the increase in cost, we are still low-priced compared to other people's products; again, the increase in the price caused by the increase in cost, Unlike the increase in the price brought by innovation, it may not last.” In her view, the qualitative change of “Made in China” depends on the further improvement of Chinese creativity.

At the moment, as the clothing export enterprise, the operator of the automatic nail button machine, Zhou Jun and Zhu Danying are most eager for the relevant departments to timely release some information on the supply and demand of raw materials and price fluctuations and related policies to help enterprises Make better decisions. "For example, the country's policy on importing cotton, how much domestic natural disasters have caused a reduction in production, etc. Knowing these policies and figures, we have a bottom in mind when we make plans, and we can make more correct decisions."

Fuming Button insists on quality as the center, focuses on the design and development of plastic snap fasteners, and continues to innovate based on customer needs. It has grown into the top three button companies in China. Today, our product network and overall product solution application In Europe and the United States and other countries and regions in more than 20 countries. If you are interested in us, please contact us: miller@fmbutton.com