China : Lucrative spandex industry attracts many investors

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Lucrative spandex industry attracts many investors

27
Mar '08

Spandex industry saw a record production last year, and observing a balance between cost of production and profit margin, lot many entrepreneurs decided to invest in this sector and expand the output capacity.

Although towards the end of 2007, prices of spandex products dropped due to several factors, yet the industry made good profits when compared with other sectors.

In 2007, China came up with a series of policies that affected spandex industrial chain to some extent. Experts consider that implementation of these policies might have an adverse effect on the spandex industry, in the present year.

Because of high environment alerts, factories consuming high-energy and releasing poisonous chemicals, have been under strict observation and due to this, many dyeing and finishing enterprises were forced to close down.

The execution of revised labor law this year will undoubtedly increase production costs of fabric plants and garment factories, especially export-oriented manufacturers.

Since the implementation of new export tax rebate policy from July last year, profits margins of garment factories have reduced significantly. Although garment factories hope to increase product prices to maintain their profits, they have received very less positive response from international buyers.

In the midst of so much confusion, spandex producing enterprises are anticipating a rise in demand this year. The income of consumer is growing so their purchasing capacity will automatically increase. Secondly, the country is hosting Olympic Games, which may create opportunities for higher sale of Spandex.

Fibre2fashion News Desk - China

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