Volume down 30% at China’s biggest cotton yarn producer
18/03/2013
For the year ending December 31, 2012, revenue was RMB 15.2 billion ($2.4 billion), similar to 2011's figure. Gross profit was up 273% to $160 million, but this was due to the success of its parent group, which employs around 100,000 people.
During 2012 Weiqiao produced 450,000 tons of cotton yarn, as well as 1 billion metres of ‘grey fabric’ and 89 million metres of denim. The production volume of cotton yarn, grey fabric and denim decreased by 27.2%, 10.3% and 12.7%, respectively.
Zhang Hongxia, chairman of Weiqiao Textile, said: "The international market for textile products and apparel remained sluggish due to the weak recovery in the global economy and the sovereign debt crisis in Europe, while competition became more intense. In addition, export orders began shifting from China to neighbouring countries with lower production costs, especially for lower-end products, thereby further intensifying international competition.
“During 2012, domestic cotton prices remained stable while overseas cotton prices declined continuously, making overseas cotton much cheaper than domestic cotton. As a result, cotton costs remained high for textile companies in China, which adversely affected the competitiveness of Chinese companies in the global markets.”
However, it said growth rates have picked up slightly since September 2012 due to stable growth in domestic demand.
“In the meantime, by leveraging the group's competitive advantages, which include global cotton procurement channels, self-generated electricity and steam supplies, Weiqiao Textile will continue its efforts to control costs and maintain, or even increase, its market share in the face of continued market turbulence through proactive sales strategies and flexible pricing policies," added Ms Zhang.
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