Profits plunge 50% at China’s largest cotton group
24/03/2015
Revenues fell 19% to RMB11,211 million ($1.8 billion) while profit slumped 50% to RMB308 million ($48 million).
China's total exports of apparel increased by 5.2% year-on-year to $186.3 billion, while textile exports increased by 4.9% to $112.2 billion.
Weiqiao’s chairman, Zhang Hongxia, said, "The greatest change faced by the Chinese textile industry was the changes in cotton policy implemented by the government. With the termination of the cotton temporary reserve policy which had been in force for three years and the implementation of the direct subsidy policy in Xinjiang, which is the main cotton production base in China, in September 2014, the domestic cotton price began to drop significantly.
“Due to the wait-and-see approach adopted by downstream enterprises, Chinese textile enterprises faced downward pressure in the selling prices of their products. The operating results of textile enterprises were affected to some degree in the short term. However, the implementation of the direct subsidy policy will gradually bring the domestic cotton price in line with the market, narrowing the gap between the domestic and overseas cotton prices, which will improve the competitiveness of Chinese textile enterprises internationally in the medium and long run."
He added that the group is confident it can improve its competitiveness this year.
"Looking ahead, the global economy will continue on a recovery path and the global textile market may continue to achieve slight growth in 2015. To this end, Weiqiao Textile will continue to adjust its product mix according to clients' need, gradually increase the share of middle to high-end products, and improve the gross profit margin of products by developing diversified and functional products.”
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