The international economic landscape is changing rapidly, and Shengze textile enterprises are writing a "dialectical view of pressure."

2017-11-14

The depreciation of the US dollar, the reduction of export tax rebates, rising labor costs, and tightening monetary policy... Since the second half of last year, negative news has been piling up on thousands of textile enterprises in the silk capital of Shengze.

The difficulties are indeed significant. But the people of Shengze see more than just difficulties.

As a world-class textile industry base, Shengze has faced difficulties many times in the past. They believe that every major difficulty is actually a new challenge that forces you to create more new methods. Therefore, when difficulties arise, the first thought should not be about wavering, but about how to actively seek countermeasures, proactively adjust structures, turn difficulties into solutions, challenges into opportunities, and pressure into motivation. This is the 'dialectical view of pressure' held by the people of Shengze.

Traditional industries do not equal sunset industries; technological innovation stimulates sunrise vitality.

There is a mindset that when traditional industries are mentioned, they seem to be 'not viable' or 'lacking vitality'.

Sheng Hongming, the secretary of the Shengze Town Party Committee, does not see it this way. He said: 'The textile industry is indeed a traditional industry, but humanity cannot live without clothing, and we want to wear better clothes. In this sense, the textile industry is not a sunset industry nor a low-tech industry; this is the vitality of the textile industry. This industrial vitality will inspire continuous innovation in the textile sector. As long as we keep pace with technological advancements and equip the textile industry with high-tech tools, traditional industries can also become high-tech industries.'

As soon as you enter Shengze, you will strongly feel that innovation is injecting endless vitality into this thousand-year-old silk capital.

The people of Shengze say that the prenatal education they heard in their mothers' wombs was the sound of weaving machines. Today, Shengze people, whose blood flows with textile cells, are increasingly focusing on enhancing their textile industry by leveraging 'external brains'. They are collaborating with universities and research institutions to accelerate research cooperation and development, with footprints not only across the country but also around the world.

Today’s silk capital maintains long-term cooperation with more than ten universities such as Donghua University and Nanjing University, with over 20 various R&D centers. Just last year, they applied for more than 700 patents.

With a continuous wave of technological innovation, new textile products from Shengze are emerging one after another, bringing new markets and profit margins to traditional textile industries. In the textile market, new memory fabrics woven from PTT high polymer memory yarn are in high demand. In the first half of the year, Shengze textile companies have invested in developing similar high-value-added products. Now in Shengze, memory fabrics produced from domestic raw materials cost around 30 yuan per meter at least, which has a price competitive advantage over similar products made from Korean materials. This technology and product are almost synchronized with international standards.

Hengli Group has established R&D centers in Germany and Japan; its independently developed bamboo carbon silk costs 68,000 yuan per ton, generating over four times the benefits from the same raw materials. Huajia Group insists on combining production with research and education; its wrinkle-resistant silk products have been included in provincial-level major scientific and technological achievement transformation projects. Currently, market prices reach 50 dollars per meter—nearly ten times higher than before—while prices for silk products have increased from 300,000 yuan to 2 million yuan per ton. Hantong Silk Weaving Factory focuses on new product development and launches over 700 new varieties each year.

The vitality of innovation has triggered a talent aggregation effect. Last year, Shengze Town invited over 1,000 students from five universities for on-site visits and received more than 780 job application agreements on the same day. This year, Shengze is planning '100 Masters Entering Shengze' to accelerate talent aggregation.

A heavy pressure is actually a new benchmark; new challenges bring more new opportunities.

The tight constraints of domestic and international macroeconomic environments have indeed brought pressure to many textile enterprises in Shengze: foreign trade export risks have increased; orders are no longer accepted; raw material prices have soared significantly, squeezing profit margins repeatedly.

'Pressure is not necessarily a bad thing in some sense; it forces enterprises to address their shortcomings more rigorously and strengthen their competitive capabilities,' said Sheng Hongming.

'The new macroeconomic environment's tight constraints will create a new driving force that promotes the acceleration of Shengze's textile industry from quantity to quality, from products to fine products, and from varieties to brands.' In the face of difficulties and under pressure, the people of Shengze do not complain about fate but instead ruthlessly examine their own 'soft spots' to strengthen their foundations.

'Building a hundred billion enterprise is not easy; building a century-old enterprise is even harder.' To keep the silk capital forever young requires cultivating a batch of century-old enterprises. Currently, Shengze is accelerating its pace towards listing companies to enhance financing capabilities while also allowing enterprises to achieve healthy development under socialized and public supervision and management.

'The Sheng Business Investment Center established last November unites 30 enterprises in the Shengze area to explore ways to open up channels for private enterprise capital appreciation. So far it has successfully conducted equity investments in Xi'an, Chongqing, Changsha and other places. Last year alone, Sheng Business Investment raised a total of 588 million yuan. This year it plans to raise another 1 billion yuan.'

'For a long time as an intermediate product link, many textile enterprises lacked brand awareness; however today’s fierce competition means that without a brand you lose your market.' Implementing brand strategies vigorously has become a conscious practice among Shengze's textile enterprises. Hengli Group's 'Hengyuan brand' polyester filament was rated as a Chinese famous brand product last year; relying on brand advantages its ultra-fine polyester filament holds first place in domestic market share. Last year Hengli invested another 1.8 billion yuan to complete an ultra-bright filament project becoming a world-class ultra-bright filament industrial base which enhances China's export competitiveness for high-end textile products. 'Top-tier enterprises set standards'; mastering standards means mastering discourse power in industrial development. Now in Shengze more and more enterprises are participating in formulating national industry standards; recently completed public notice for textile coding standards set by Dongfang Silk Market will soon be officially recognized. The formulation of this standard will provide important support for future online transactions of textiles. Since late 2006, Shenghong Group has participated in revising national standards for polyester filament products and chemical fiber filament methods; its vice chief engineer has served as head of both chemical fiber filament method standard group and polyester filament group fully responsible for revising such national standards.

'Energy conservation and emission reduction are not shackles but rather boosters for enhancing enterprise competitiveness.' Environmental pollution is the biggest shortcoming of the dyeing and printing industry. It cannot be denied that at one time the textile dyeing industry entered a misunderstanding where economic benefits were gained at the expense of environmental sacrifice.

'However today under tight macroeconomic constraints, people in Shengze have recognized their responsibility to impose stricter environmental protection measures on themselves.' Located at the junction of Jiangsu and Zhejiang provinces years ago environmental conflicts at borders once alarmed the State Council. In recent years Shengze Town has prioritized comprehensive environmental remediation investing in pollution control through technology policies mechanisms and comprehensive measures simultaneously. Years of efforts have yielded gratifying results; now local party leaders and business owners frequently visit each other exchanging cooperation which indirectly confirms Shengze people's efforts and achievements in restoring an environmentally friendly atmosphere.

Shengze Town is making great efforts to address the air pollution issues caused by wastewater from spray weaving machines and coating enterprises. This year, the environmental protection investment included in the fiscal budget reached 105 million yuan. Textile wastewater with COD emissions not meeting standards will be firmly shut down. 158 coating production lines will be uniformly relocated to a specific area for reconstruction and upgrading.

Shenghong Group's first phase investment of 36.3 million yuan in the reclaimed water project, through a two-stage treatment system for printing and dyeing wastewater with a daily processing capacity of 20,000 tons and a membrane treatment system for printing and dyeing wastewater with a daily processing capacity of 10,000 tons, can reduce the COD concentration of printing and dyeing wastewater to below 10 mg/l, and the treated water can still be recycled for production. The reporter saw on-site that the industrial wastewater treated by world-advanced environmental protection methods has become clear and transparent. With this system, the reuse rate of printing and dyeing wastewater exceeds 60%. "Energy conservation and emission reduction is not only a social responsibility of enterprises but also a new type of competitiveness. The faster we move in this regard, the sooner we benefit." This is the firsthand experience of Shenghong Group and many other textile enterprises. The energy-saving project independently developed by Shenghong last year—compressed air station technology—reduced energy consumption by 20% just by utilizing waste heat to drive the steam turbine, forming an industrial chain for power generation, heating, and compressed air supply, saving a large amount of energy while receiving a reward of 10.9 million yuan from the National Development and Reform Commission.

Land resources are non-renewable, and regional carrying capacity is limited. It is urgent to improve the output rate and contribution of land resources per unit area. Shengze Town proposed that "agriculture should be judged by yield per mu, and industry should also be judged by yield per mu." Last year, Shengze textile enterprises first introduced "moving machines upstairs," seeking land from the sky. Twelve textile enterprises including Yongkangda Spray Weaving Factory and New Wu Textile Co., Ltd. built multi-story factories, saving 170 mu of land. This year, Shengze plans to invest 7 million yuan to "create" another 300 mu of land. Wujiang Huaju Textile Company is committed to building a "no-man factory," with equipment specially imported from Japan's Tsudakoma and Toyota, where each worker oversees more than 20 machines, with a maximum of up to 30 machines. According to General Manager Ren Hong, the company promotes Japanese 5S and 6S management models, greatly reducing human resource costs through electronic full-process control.

In the past three years, there has been no new industrial land added in the town. The total energy consumption in the town has decreased at an annual rate of over 6%, while economic benefits have increased by about 30%. In 2007, Shengze Town achieved a regional GDP of 15.037 billion yuan and general budget revenue of 1.159 billion yuan. Meanwhile, energy consumption per unit GDP decreased by 5.1%, major pollutant COD decreased by 6.14%, and total sulfur dioxide emissions decreased by 8.9%. From January to May this year, the town's general budget revenue was 584 million yuan, an increase of 11.52% year-on-year.