Home / Knowledge / News / Textiles / 'Out of box thinking' to survive credit squeeze
'Out of box thinking' to survive credit squeeze
31
Dec '08
The economic turmoil across the globe is leading companies to think out of the box in order to survive the storm of the crisis. The Chongqing Lifan Group plans to exchange cars with other companies for other products, which in essence is the medieval way of trading or the barter system.

On the exchange radar are raincoats, umbrellas, shirts, tents, information calendars, etc. The main purpose behind adopting this unique medieval system is to maintain continuity in sales and reduce costs and the total barter amount is expected to be more than 10 million Yuan.

Coincidentally, in July this year, Beijing Huiyuan Juice Group exchanged 400,000 boxes of fruit juice with Qingdao Aucma Co., Ltd. for 6000 sets of display cabinets, worth of about 14 million Yuan and Shanghai Arts Development Co., Ltd. exchanged finished Yue-Sai dolls with Laweilier Toy Co, France for fabrics and PVC materials, worth US $3,000,000.

Since the beginning of the sub-prime crisis in the US, credit market is tightening and banks have restricted lending, leading to a credit squeeze. At the same time corporate finance costs continue to increase, leading to a barter system among companies, as the approach involves no cash.

In this so-called barter, companies use their own products to exchange for raw materials and consumer goods with other companies, which would have been originally purchased in cash, in order to reduce their liquidity pressure.

Director of the Beijing Center of Qingdao Aucma Business Co., Ltd. Wang Li-Ming said," Barter means no cash is involved and in the process the company can get a variety of products or services in return like raw materials, promotional materials etc., which originally would have been purchased in cash. The barter plan for next year is expected to reach 60 million Yuan, for the company”, he added by saying.

It is estimated that sales cost of a product in general is 27 percent, while the cost of barter is only 5-7 percent. The barter system came in to prominence with the unfolding of the Asian financial crisis in 1997 in Thailand, Malaysia, Japan, South Korea and other countries.

Fibre2fashion News Desk - China


Must ReadView All

Building of Ethiopian textile unit by Chinese firm starts

Textiles | On 22nd Jan 2018

Building of Ethiopian textile unit by Chinese firm starts

Chinese firm Wuxi No. 1 Cotton Mill will build a textile plant in...

JD.com to invest $3.1 bn to revive industry in NE China

Apparel/Garments | On 22nd Jan 2018

JD.com to invest $3.1 bn to revive industry in NE China

To back the government’s campaign to revitalize the traditional...

SIMA makes pre-budget recommendations to Indian govt

Textiles | On 22nd Jan 2018

SIMA makes pre-budget recommendations to Indian govt

Exemption of 5 per cent goods and services tax (GST) on raw cotton,...

Interviews View All

Nitin Soni
Dolphin Jingwei Machines

Taxation policies need to be made simpler

Top executives
Textile industry, India

Such fairs are a must for industry to showcase new innovations

Evelyne Cholet
UCMTF

‘France had a reputation of being big in new ideas, but poor in marketing...

Vikas Banduke

Softech Controls Private Limited (SCPL) is a part of the Cotmac Group, an...

C Dhandayuthapani

MAG Solvics Private Limited was established in 1991 to design and develop...

Tejas N Patel, Navin D Patel

Founded in 1999 by Navin Patel in the name of Tejas Fabrics with 100...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Paolo Ocleppo
Sandvik Hyperion

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

Eamonn Tighe
Nature Works LLC

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

Aditi Somani
Aditi Somani

Aditi Somani specialises in luxury fusion wear with international cuts and ...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Bani Batra

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

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

January 2018

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
69.1%
No
13.4%
Skip
17.5%

Total Votes: 97

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
63.9%
No
28.9%
Skip
7.2%

Total Votes: 97

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.6%
No
9.3%
Skip
3.1%

Total Votes: 97

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
82.5%
No
8.2%
Skip
9.3%

Total Votes: 97


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