Home / Knowledge / News / Textiles / One more textile major collapses due to credit crisis
One more textile major collapses due to credit crisis
13
Dec '08
The economic meltdown and the consequent recessionary trends in the global markets are making basket cases out of the best of organizations. One more company which has reported to have collapsed under the strain of the recession is Zhejiang Zongheng Group in Shaoxing which collapsed due to financial constraints.

Industrial experts say, most domestic textile enterprises have grown their scale of operations and were increasing their capacities under breakneck speed due to the unprecedented growth of the last few years, but neglected to improve the capabilities at the management levels and also their fundamentals.

The other major reason forwarded by the experts is that these additional capacities created in the last few years is now the very cause of collapse of these companies now, as recession has brought about a slowdown in consumption of all materials.

Just a few weeks back the biggest PTA manufacturer in Asia, Hualian Sanxin had completely stopped production and now it is the turn of another major company to report a shutdown. The main reason citied by the markets for Zhejiang is a lack of working capital and the company is supposed to have accumulated debts of Yuan 2-3 billion.

Economies in some regions with relatively larger proportions of textile industry have been seriously affected since the beginning of 2008 such as Shaoxing, Zhejiang, Jiangsu, Dongguan and Guangdong. Many leading enterprises have been caught in whirlpool of the crisis and are shutting production or just collapsing.

Most of these companies have expanded by borrowing heavily from the banks who lent them when times were good for the industry. But since the crisis has unfolded the operating capabilities of these big companies are being stretched to their limits, due to the serious liquidity crisis arising from the slowdown.




Fibre2fashion News Desk - China


Must ReadView All

Textiles | On 23rd Jun 2017

Textile ministry organises training workshop on GST

The ministry of textiles had organised training workshop on GST which ...

Apparel/Garments | On 23rd Jun 2017

Uware Brands into licensing agreement with Polaroid

Uware Brands has entered into a licensing agreement with Polaroid for ...

Textiles | On 23rd Jun 2017

Ralph Lauren ex-president Tiger of Sweden's new CEO

Hans-Christian Meyer, former president of Ralph Lauren Corporation,...

Interviews View All

Smith Vaghasia
Sanado India

Online remains the best destination for shopping

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Amrit Sethia
SOIE

‘The intimatewear category in India is slowly becoming trend-sensitive.’

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
June 2017

June 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search