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

Apparel/Garments | On 5th Dec 2016

EC proposes new tax rules to support e-commerce in EU

The European Commission (EC) has unveiled a series of measures to...

Apparel/Garments | On 5th Dec 2016

Traders to intensify adoption of digital payments

Adoption of digital payments in their existing business format would...

Textiles | On 5th Dec 2016

US textile & apparel exports down 6.44% in Jan-Sept ’16

The exports of textile and apparel from United States were down 6.44...

Interviews View All

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Kamlesh Vaghela
RK Textiles

Very few machinery manufacturers have R&D units

Jurgen Gauger
Spreadshirt

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

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Rupa Sood and Sharan Apparao
Nayaab

Nayaab, an exhibition meant to celebrate Indian weaves, is in its second...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

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
December 2016

December 2016

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

SUBSCRIBE


Browse Our Archives

GO


Advanced Search