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Govt backs sewing machine giant Feiyu in its enterprises
11
Jun '08
Feiyue Group, the largest sewing machine manufacturer in Zhejiang Province as well as in the world, is presently facing severe crisis for the first time in 20 years since its inception.

Ranked as one of the top 50 private enterprises in China, Feiyue has been intensely impacted by subprime credit crisis in United States, which is not only dampening the textile industry but is also considerably reducing exports and overseas orders.

According to local statistics, the export turnover of the company in the period January-April reached US $18.48 million against $33 million recorded in the same period last year. On an average it showed a decline of 44 percent on a year on year basis.

Industrial sources have confirmed that Feiyue is burdened with a bank loan of 1.8 billion yuan and because of its inability to repay the same due to sluggish business, banks have tightened money supply to the company this year.

However, the Economic Commission of Zhejian Province held an emergency meeting with creditor banks, urging them not to cut off funds linked to Feiyue Group. In fact by mid-May, the commission also issued a document requesting banks not to take action against the company.

In response to this, all the individual lending banks of Feiyue Group reached an agreement to support its development. On the contrary, they decided to coordinate through the Government of Zhejiang by ensuring that loans are sanctioned when required by the company.

After having garnered such colossal backing for its company, the group has launched a downsizing plan that includes production of only profitable products by cutting off meager profit products and disposal of assets outside the core business.

As of now, it has been revealed that the local Government has sent a team to take over the accounts of Feiyue Group to help it channelize funds in proper direction.

Fibre2fashion News Desk - China

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