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Shrinking profit margins bother textile industry

28
Apr '08
Declining profit margins of the textile units has emerged as a serious issue for the industry. Thus, China Textile Industry Association had recently sent a delegation to visit Shandong, Jiangsu, Zhejiang, Hubei, Hebei and Fujian Province for finding out the reasons behind this.

The textile export volume of these six provinces forms up to 85 percent of the entire industry. It is estimated that corporate profits of 2/3 enterprises is merely 0.62 percent.

According to experts, one of the reasons for fall in the exports can be that, the enterprises are unable to deal with the pressures of rising prices in raw materials and Renminbi appreciation. Along with that, the labor cost has gone up and lowered export tax rebates are also making it difficult for the textile units to survive in the competitive market.

Industry analysts believe that in the pretext of the present situation, if the export tax rebate are adjusted then only the situation can improve and profit margins of textile and garments can increase.

Fibre2fashion News Desk - China


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