Tongkun Group Co., Ltd. issued an announcement on the evening of December 3 that the company signed an investment agreement with the Shuyang Economic and Technological Development Zone Management Committee. Shuyang County has invested approximately 15 billion yuan to build a new project with an annual output of 2.4 million tons of filament (short fiber), 500 texturing machines, 10,000 looms, supporting dyeing and finishing, and a public thermal energy center.
According to the announcement, the above-mentioned project has changed the traditional polyester spinning production method and achieved the transformation and upgrading of integrated production of polyester spinning, texturing and weaving. It is planned to build a new main factory area The planned land area is about 4,200 acres, including 200 acres for the public thermal energy center project and 100 acres of staff apartment land planned near the school. Tongkun Co., Ltd. said that the products of the above-mentioned projects are new functional fibers, high-end textiles and dyeing and finishing fabrics, which will help the company optimize its product structure and enhance its core competitiveness.
It is understood that the Shuyang Economic and Technological Development Zone where the above-mentioned investment project of Tongkun Co., Ltd. is located was founded in August 2001. In March, it was approved as a provincial development zone in 2006 and upgraded to a national development zone in November 2013. It now has 230 enterprises above designated standards, including 89 enterprises with invoice sales exceeding 100 million yuan. Industries such as textiles and clothing, equipment manufacturing, electronic communications, and health care have become large-scale.
Coincidentally, in the first quarter of this year, a total investment of 23 billion yuan is planned to build projects with an annual output of 1.2 million tons of differentiated super-simulation functional chemical fibers and an annual output of 1 billion meters of functional fabrics. The Hengli Fashion Industrial Park project launched its groundbreaking ceremony at the Suqian Port Industrial Park located on the Sucheng Canal. The project can be completed and put into production in the early stage by the end of 2020. After full production, it can achieve annual sales revenue of more than 30 billion yuan and tax payments of 1 billion yuan.
As early as 2007, Hengli Group actively responded to the strategic call of the Provincial Party Committee and the Provincial Government to “transfer industries from north to south to achieve common regional development”, supporting northern Jiangsu and joining hands with Suqian. Over the past 13 years, Hengli Group has continuously increased its investment in Suqian, with a total investment in Suqian exceeding 10 billion yuan. It has developed into three major sectors: polyester new materials, textiles and hotels, with diversified businesses such as real estate, finance and trade. It is a leading enterprise in industrialization development and has become the largest north-south industrial investment project in Jiangsu Province.
Hengli and Tongkun entered the weaving market at the same time
Why did Northern Jiangsu become an important investment location?
1. What is the significance of entering the weaving market? Be a strong player in the entire industry chain
As of 2019, the top six polyester filament companies in the industry are Tongkun, Xinfengming, Shenghong, Hengyi, Hengli and Rong Sheng accounts for more than half of the total production capacity. In the next few years, only large enterprises such as Tongkun, Xinfengming, and Shenghong will continue to expand polyester filament production, and industry concentration will further increase. Today, the polyester industry, whose production capacity has been highly concentrated, is further evolving!
The competition in the polyester market is intensifying. On the one hand, polyester factories with poor competitiveness and serious losses will continue to be shuffled by the market. On the other hand, with the help of PX-PTA-polyester-chemical fiber -With the vertically integrated industrial layout of weaving, major manufacturers in the polyester industry chain have rich sources of profits. They can adapt to the current situation and adjust the sources of industrial profits in a timely manner based on the actual conditions of different industries in the industry chain, without having to bet on the polyester industry. . The industrial concentration of the polyester market will continue to rise.
At the same time, market forecasts indicate that polyester is expected to usher in a round of economic recovery in 2021: First, domestic and external terminal demand continues to improve, and the country is one step ahead of overseas. The zero sales of clothing companies have achieved single sales in September. +8% month-on-month. With the implementation of vaccines and the restart of overseas economies, export value is expected to improve at an accelerated pace. The overall terminal demand for textile and clothing is expected to rebound to around 6% of the past few years; secondly, the current inventory level of the entire industry chain is not high. , especially in the downstream fabric and clothing sectors, inventories have been basically flat in the past two years. With demand recovery and rising oil prices in 2021, there is a lot of room for replenishment, which may bring about 2%-3% demand growth.
2. Why was Northern Jiangsu chosen as an important investment location?
According to statistics from each cluster area, in the first half of 2020, chemical fiber filament production in Shengze, Xiuzhou, Longhu, Siyang, Pingwang, Qidu, Keqiao, and Dafeng Xiaohai The cumulative fabric output was 10.668 billion meters, a year-on-year decrease of 13.17%, and the decline narrowed by 9.45 percentage points compared with the first quarter. Looking at the overall situation of the industry, Siyang performed outstandingly, especially its growth in the second quarter, which bucked the trend. In the first half of the year, output increased by nearly 20% year-on-year.
It is understood that the increase in Siyang Cluster’s chemical fiber filament fabric production is due to the fact that new factories have been put into operation in recent years. In addition, the products are mainly home textile fabrics, which have been less affected by the epidemic. In the post-epidemic era, home textile terminals have shown a certain degree of resilience compared to clothing terminals.
Chemical fiber filament fabric production table of China’s main filament weaving industry clusters from January to June 2020
According to relevant official news, in recent years, Siyang has accelerated the upgrading of the textile and clothing industry to the high end and extended to the rear. It has continuously supplemented and strengthened the industrial chain, gathering Hengtian Home Textiles, Shenjiu There are more than 20 leading enterprises in home textiles, Sihai Weiye and other industries, and 57 enterprises above designated size, with an annual output of 500,000 tons of polyester spinning.�There are 2 billion meters of chemical fiber filament fabrics and printing and dyeing fabrics, and 500 million pieces of clothing, and the initial formation of “polyester → slicing (melt direct spinning) → spinning (spinning) → texturing → weaving → printing and dyeing → home textiles/finished garments” complete industrial chain.
At present, Siyang in northern Jiangsu has become one of the main positions for the transfer of water-jet loom production capacity in Jiangsu and Zhejiang. Among them, Siyang plans to undertake up to 80,000 water-jet looms; From the textile depression to the industrial highland, Siyang County has entered the matrix of China’s textile industry as a “dark horse”, accounting for more than one-fifth of the six major sectors.
The originally unknown textile industry in northern Jiangsu rose rapidly almost “overnight”, and the huge textile cluster market began to take shape. This in itself is a huge temptation for polyester companies. Tongkun Group also stated in the announcement that the completion of the project will also enhance the competitiveness of the new materials industry in Shuyang Economic and Technological Development Zone and build a first-class chemical fiber manufacturing base.
In addition, under the background of environmental protection and industrial gradient transfer, the original textile printing and dyeing enterprises around Taihu Lake have relocated to the northern Jiangsu area, which has a location advantage for the project and product sales are guaranteed. .
Leaders grab downstream business
It is even more difficult for weaving manufacturers along the coast of Jiangsu and Zhejiang to do business!
For the weaving manufacturers in the coastal areas of Jiangsu and Zhejiang, it is a severe test!
Since the beginning of this year, due to the impact of the epidemic, a large number of textile orders have been delayed and canceled, which has brought many difficulties to the production and operation of textile companies.
The national environmental protection campaign launched two years ago has made the transfer of the textile industry a rational choice for enterprises to achieve transformation and upgrading and seek breakthrough development. In this context, Suzhou, which has low costs and rich resources, has A large number of looms have poured into the northern region, but as time goes by, the production capacity of these companies has counterattacked, and competition has brought greater pressure to the current Jiangsu and Zhejiang weaving markets.
Affected by the low cost of external gray fabrics, many local companies were forced to join price wars and fell into an abyss of losses. The more they produced, the more they lost. However, when the machines stopped, rent, machine depreciation, etc. There are also basic living expenses for workers, etc., which are all expenses. Next, leading polyester companies will deploy downstream weaving and compete with small and medium-sized textile owners for business, making business even more difficult!
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