In the first three quarters of 2012, China’s tech-textile industry faced with many challenges caused by unfavorable factors at home and abroad. The development speed keeps a slight slowdown trend compared with the first half year, seeing a year-on-year decrease of about 15 percentage points; especially the industrial investment showed a negative growth. Overall, the industry is running smoothly in a good profitable condition. From the enterprises point of view, large enterprises with technology, scale and market advantages live in better conditions, while small enterprises usually have some difficulties in dissatisfaction orders and underemployment.

 

Main Industry Economic Indicators of Tech-textile Products in the First Three Quarters

Economic Indicator	First Three Quarters in 2012	Year-on-Year Growth Rate in 2012 (%)	Growth Rate in the First Half of 2012 (%)	Growth Rate in the First Half of 2011 (%)
Main Business Income	151.5 billion yuan	14.8	15.1	30.6
Total Profit	7.34 billion yuan	16.7	13.5	30.8
Profit Margin	4.85%	1.7	-1.4	-
Investment	25.9 billion yuan	-14.5	-9.7	43
Export	13.45 billion dollars	0.6	6.7	26.8

 

 

According to the data of the National Bureau of Statistics, from January to September, the main business income and profit of the 1578 tech-textile enterprises above designated size reached 151.5 billion yuan and 7.4 billion yuan respectively, witnessing a year-on-year growth of 14.8% and 16.7%. The growth rate of the two indicators dropped over 10 percentage points compared with the same period last year.

From January to September, the industry profit growth rate increased against the first half year with the average profit margin of 4.85%, increased slightly compared with the same period last year. The industry loss reached 13.3%, seeing a year-on-year increase of nearly 3 percentage points. The amount of the industry loss increased 30.6%, and the losses of textile belts and cord fabrics increased by 114%, which stimulate the excessive increasing losses of the industry. The growth rate of the main business income of ropes and tents &canvas kept stable, while the profit growth reached 39.1% and 24.9% respectively, the profit margin reached 5.4% and 5.1% respectively.

The China Tech-textile Industry Association carried out a survey of 42 backbone enterprises operation in the previous quarters of the year, 35.5% of the enterprises got different degrees of reduction in sales income, and 45.2% of the enterprises had a decline in the cooperate profits. The main business income, the export delivery value and the profit growth of 42 enterprises increased 6.8%, 10% and 19.9% respectively, and the average profit margin realized 10%. The increase of the profit margin was mainly due to the lower price of raw materials drives down the cost, but at the same time, the growth rate of the taxes of these enterprises was over 50%.

The investment in previous years was very active, and the new production capacity gradually released, but due to the slowdown of the market demand at the same time, these factors have led to the decline of the industry investment in the first three quarters. From January to September, the new investment of industry reached 25.9 billion yuan, down 14.5%, and new projects reached 430, witnessing a year-on-year decrease of 32.3%. It is expected that the annual industry investment will continue to maintain a contracted state.

 

 

The industry exports in the first three quarters realized $13.45 billion, a year-on-year increase of 0.6% in a slow growth rate. In the main export products, the export of tent & canvas products decreased 30.1%, the export of industrial plastic coated fabrics and tent & canvas products declined 7% and 8.8% respectively. The decline of these two categories of products made the industry exports basically in zero growth. The exports of medical & health textiles and non-woven fabrics are still showing the growth in both volume and price, the exports were up 5.2% and 10.1% respectively, while the export volume increased 4% and 8.1% respectively.

In the view of export countries, the United States, Japan, India, South Korea, Vietnam, Germany, Hong Kong, Russia, Indonesia and the United Kingdom are the top 10 countries and regions in export volumes of China’s domestic tech-textiles, accounting for 49.1% of the total exports, while the exports to these countries and regions decreased by 1.4%. Exports to the United States, Russia and Indonesia increased 3.6%, 16% and 10% respectively, and exports to Japan and Korea saw a slight decline, while the exports to India and Vietnam dropped over 10%,

 

Main Export Countries & Regions for Tech-textile Products in the First Three Quarters

Countries & Regions	Amount of 2012	Changes of Export Volume (%)
the United States	21.3	3.6
Japan	9.5	-1.6
India	6.5	-12.0
Korea	5.2	-2.8
Vietnam	4.5	-13.9
Germany	4.3	-8.2
Hong Kong	4.2	-6.2
Russia	3.7	16.0
Indonesia	3.7	10.0
the United Kingdom	3.2	1.7

      

 

 

Non-woven fabric is the important raw materials of tech-textile products, the production, efficiency and import & export of the non-woven fabric maintain a high growth rate in the first three quarters. The main business income realized 71.77 billion yuan, a year-on-year increase of 20.9%; the profit reached 3.78 billion yuan, a year-on-year growth of 16.8%; and the profit margin was 5.26%. At the same time, the loss of non-woven fabric only increased 7.3%, indicating that the operation of the industry is gradually improved.

In the first three quarters, China’s non-woven fabric production realized 1.7 million tons, a year-on-year growth of 21.1%. Zhejiang, Shandong and Jiangsu are China’s areas with the largest nonwovens production, accounting for 50% of the whole nationwide production, and all maintained a high growth in the first three quarters. Guangdong Province is the only one area saw a year-on-year decrease of 17% in the large nonwovens production provinces, which due to the decline of the exports.

The industry investment only increased 1.8%, the growth rate of the numbers in construction projects, new projects and completed projects dropped over 30%. The main reason of the decline in the investment is the high growth of the industry investment in the year of 2010 and 2011, the market need a period of time to digest new added productivity. The export of the nonwovens keeps a growth in both quantity and price; the export quantity reached 363,000 tons, up 8.1%; and the export amount realized 1.21 billion dollars, maintaining a good state of development.

In view of the composition of export products, the filament nonwovens and staple products accounted for 39% and 61% respectively; products with the weight from 25 gram to 70 gram accounted for 46%; while the export of products less than 25g/m2 only accounted for 13%.

 

 

Medical and health textiles are closely related to people’s live and health, which is the rigid and necessary demand. But affected by the influence of the economic environment at home and abroad, the growth of the demand is slowing down, and along with the new production capacity in the previous years, making the industry competition more intense. The industry backbone enterprises with advantages of scale, technology and market mainly supply products to foreign brands and domestic major brands. The operation is in a good condition, and part of the enterprises still plan to invest in new production lines. For an example, the third Lai Finn Line of Jinlong Company in Hubei had been put into operation in August; the single production capacity will reach 15,000 tons.

The export proportion of medical & health textiles is higher; the export of the first three quarters totalized 2.08 billion dollars, a year-on-year increase of 5.2%, among which, the disposable medical clothing export reached 6.9 million dollars, medial dressing export reached 6.6 million dollars, and the export of disposable diaper, sanitary napkin and etc realized 7.3 million yuan.

Developed countries and regions like the United States, the European Union, Japan and etc are major exporting destinations for China’s medical & health products. Pengyang Town, Hubei Province is the largest medical & health textiles production and export area. The local enterprises through the industry transformation and product structure adjustment to make sure that this year’s production and sales maintain a rapid growth with abundant orders. The realization of the industry output value of the first three quarters is more than the whole level of 2011. The nonwoven industry clusters in Xialv Town, Zhejiang Province realized a growth of 19% in sales, and the export increased by 2.6%.

 

 

In the first three quarters, the growth rate of the vehicle production and sales was lower than 5%, and the growth rate of market demand for transport textiles is slowing down. In the whole industrial chain, buyers are in the dominant position with the powerful strength and less quantity. And the purchasing mode is transforming to the “small batch, multi-species”, which makes a very competitive in the industry.

Despite the fierce competition, the sales income of enterprises in the first three quarters maintained a growth speed of about 10%, the profits of the backbone enterprises kept the synchronous growth. But because the declining product price and the high production costs, the industry profit level is still in a downward trend.

In the view of car brand, the operation of enterprises supply for European car brands is better, while for the independent car brand enterprises is facing with great difficulties. Enterprises supply for Japanese cars are in a sever situation, showing a bigger decline.

 

 

In 2012, influenced by the big environment, the whole China’s economic situation is slowing down. The power plants, iron & steel and cement industry bear the brunt of the affected. The new built dust and gas purification system are very few; demand of filter material for new projects has a substantial decline, presenting a negative growth in the fields of cement, iron& steel and the filter material.

Since the filtration system installed few years ago has been put into the replacement period, the filter material used in dust removal system saw a year-on-year growth of 10% —20%. Because this part is mostly high temperature filtration materials with high price and big output value, the present production situation of enterprises is relatively full, maintaining a growth of 10%—15%.

Fuchen Town, Jiangsu is the largest high temperature filtration material production cluster, from January to October, the industry output and sales income increased 12%, the production and marketing rate was 95.3%. The profit of 12 backbone enterprises of the cluster increased 27% year-on-year, and the profit rate reached 10.4%.

 

 

From January to September, the railway infrastructure investment was 290.251 billion yuan, a year-on-year drop of 15.8%, and 12.2 percentage points higher of the growth rate. In the first three quarters, the road waterway transportation investment in the fixed assets reached 973.1 billion yuan, a year-on-year decrease of 2.6%, the growth rate was 17.3 percentage points slower than the same period last year. In the year of 2012, the national water investment will reach 480 billion yuan, seeing a year-on-year increase of 40% or so, and the water transport engineering investment increased by 33%. Landfill construction investment is still in the original high growth.

The decline of the infrastructure investment led to the weak industry demand and intensive competition, and because users’ higher requirements of products in technology and quality, orders for small enterprises in the industry are less, making small enterprises hard to survive. Big enterprises can still get orders due to their relatively complete product line, but the low price makes difficulties to improve the profits synchronously.

In the first three quarters, the growth rate of traffic investment in fixed assets scale narrowed by season, and realized a positive growth in the third quarter. Along with the increasing strength infrastructure investment by the country, the geotechnical textile demand will gradually increase, promoting a new round of rapid growth.

 

 

Affected by the influence of the macro environment, the growth rate of industry main economic indictors in the first three quarters appeared relatively substantially decreased compared with the same period last year. But the operation is going smoothly, and the profit condition is good. It is expected that the industry will present a similar situation in the whole year.

Currently, during the industry development, the slowdown of the demand not only stimulates the competition in the industry, but also promotes the reshuffle and restructuring of the industry, which promote enterprises to transform the economic growth pattern by relying on the comprehensive advantages of technology, research and development, brands and management to reduce the cost, in order to improve the market share and promote enterprises’ core competitive ability.

The global medical and health textiles is increasing in a growth rate of 5%-10%, and China’s medical and health textiles will increase in a growth speed of 10%—20%. Along with people’s attention to living environment and increasing national environmental protection investment, filter textiles demand will continue to maintain high growth. The gradually restored national implementation investment in highway, railway, water conservancy infrastructure and etc will lead a restorative growth in the geotechnical textiles market. And with the reducing cots of composite material, the application range of the composite materials will be expanded; the demand for structure-enhanced textiles will also be in great growth.

China’s tech-textile products have the advantages of industrial chain and production cost, and the gap between technical level and the world’s advanced level has gradually reduced, the products can meet most of the applications, so the development of the international market has the quite big potential. At the same time, the country will also continue to support the development of the tech-textile industry. Since the favorable factors of the industry development have not changed, the tech-textiles will continue to maintain strong vitality and continue to develop in the double-digit growth.