Recently, news of the “order shortage” of domestic manufacturing factories has appeared in the newspapers, and the Vietnamese factories that had previously been so popular that they even queued up until the end of the year began to “short of orders”. Many factories reduced overtime hours, and began to suspend production and holiday, and even the Samsung factory of the well-known electronics company was affected. Samsung Electronics has scaled back production at its massive smartphone factory in Vietnam, according to employees. #Paper Cup Fans
An employee of Samsung’s Vietnam plant said that now only 3 days a week work, and some production lines are also adjusting the original 6 days a week to 4 days a week. In previous years, around June-July was the off-season, but there was no overtime and no reduction in the number of working days. The employee revealed that the message from management is that the inventory is high and there are not many new orders. Business activity was even more brisk at the height of the Covid-19 pandemic last year, and is now sluggish.
One, missing orders! Orders in Vietnam, India and Bangladesh fall off a cliff
As a major investor in Vietnam, Samsung Group is not only the country’s largest foreign investor, but also Vietnam’s largest exporter, with one company contributing one-fifth of Vietnam’s exports. Now that Samsung is facing a depression, it has also ruthlessly exposed the contrasting status of many countries in Southeast Asia recently. #Yibin jumbo rolls
Suspension, holiday! Vietnam has no orders in the middle of the year, and workers have to take turns
Some time ago, the Vietnamese factories that were unable to recruit workers and were full of orders are now running out of orders. Vietnamese media vnexpress reported that after six months of strong recovery in the first half of the year, many factories began to lack orders in the second half of the year, and had to shorten production time, stop hiring, and reduce labor.
In the second quarter, the outbreak of the Russian-Ukrainian war, rising oil prices, and the epidemic… had an impact on people’s global consumption habits. Purchasing power for fashion apparel products has plummeted, inventories are unsellable, and brands are not signing new orders. Some factories have no orders, forcing them to recalculate appropriate labor plans, such as taking Saturday off and arranging workers to take time off. #APP paper cup fan
A factory manager in Vietnam said that the factory is still operating normally, but orders will be lost from September to October. According to the plan, the company will arrange for workers to take vacations at the same time, and in conjunction with the National Day holiday, the factory will stop production for 8 days. Then, depending on the situation, the company arranges workers to take Saturdays off to reduce overtime. Worker earnings are expected to decrease by 10-20%.
Mr. Tran Viet Anh, vice-chairman of the Ho Chi Minh City Business Association, said that industries such as electronics, textiles, footwear and apparel, wood, steel and other industries are also facing many difficulties due to the decline in purchasing power in key markets. This year, the market has been “deserted” a lot, factories have a lot of inventory, and there are still no buyers after price cuts. Companies have to reschedule production activities and reduce working hours. At present, the factory mainly reduces overtime and annual leave. Next time, however, the workload will not be enough for workers to work 8 hours a day for a week. #Cup Paper Bottom Wick
Exports are down 15-40%! India’s orders for next season all reduced
Affected by the global economic recession, the Indian textile industry has felt gusts of cold wind. Clothing and home textile export orders from the US and Europe fell by around 15%-20% as Western retail brands faced slow demand. In Panipat, an important home textile production hub, there are signs that export orders have fallen by as much as 40 percent. It is reported that inflation and rising interest rates caused by the Russian-Ukrainian war are the reasons for the recession and the decline in export orders.
According to data released by the Indian Ministry of Industry and Commerce, in June 2022, the export volume of cotton yarn, fabrics, finished products, and handloom products fell by 19.49% to 962 million US dollars; the overall export of cotton textiles fell by 14.30% to 1.699 billion yuan. #Paperjoy paper cup fan
Industry sources said importers from Western countries not only reduced orders for the next season, but also delayed deliveries of previous orders. Retail sales in Western countries have slowed sharply due to high inflation. The warehouse is full of unsold goods.
Exporters in Panipat said they received 40 percent fewer export orders for home textiles than last year after attending a trade fair in Germany in June. Ramesh Verma, an exporter of Panipat and a member of the Handloom Export Promotion Council, said that big companies and retail brands from the United States and Europe purchased a lot of home textile products last year, but retail sales were still very weak. As a result, they have to buy less, and exporters have fewer orders for the next season. #Stora Enso paper cup fan
400 companies closed down! Pakistan cuts production by more than 50%
Overall, since the second quarter of 2022, Southeast Asia’s cotton textile and apparel industries have fallen into the predicament of “upside-down” production and sales, declining orders, and cotton consumption apparently peaking and falling. According to the Pakistan Textile Mills Association, the textile industry will not only reduce its output by more than 50% due to the shutdown of production, but will also be forced to borrow $6 billion overseas due to energy supply and cost constraints; at the same time, it will face the risk of losing orders, customers, default losses and other risks. #Paper Cup Fan 6.5 Oz 170g
Since mid-July, the phenomenon of buyers requesting to cancel the contract has continued to increase, including some long-term cooperation with cotton mills and old customers of middlemen, and the contract performance rate has dropped again and again. At present, the most severely damaged area is Pakistan’s Panga Province, which accounts for 70% of the country’s textile factories. 400 textile factories are facing closure, and thousands of people have lost their jobs.
The reasons for the decline in new orders for Pakistan’s cotton textile and clothing exports are also energy shortages, including a serious shortage of electricity and natural gas supplies. As a result, about 30% of Pakistan’s textile production capacity has been shut down. Pakistan’s cotton textile and clothing companies have recently produced and received orders. The enthusiasm of the cotton consumption dropped significantly, and the cotton consumption demand fell faster than expected. #Cup Paper Roll Food Grade
Orders drop by 20%! Bangladesh order production and shipment delayed
Recently, clothing orders in Bangladesh, a South Asian country, have fallen sharply. Bangladesh, the world’s second-biggest garment exporter after China, also faces the risk of a surge in costs that could hamper its recovery from the pandemic.
Suppliers to U.S. apparel giant PVH and Inditex SA’s Zara said its new orders for July were down 20 percent from a year earlier. It also said that retailers in the European and U.S. markets were either delaying shipments of finished products or delaying orders. #Dihui Pe Coated Paper Roll
Soaring inflation in export destinations has had a serious impact on local foreign trade exporters. In addition, the euro weakened against the dollar, making Bangladesh’s exports less attractive. It is reported that the garment industry accounts for more than 10% of the country’s GDP and employs 4.4 million people. Therefore, the decline in clothing orders is a risk to the Bangladeshi economy.
New orders decreased by 0.4% month-on-month, Germany fell for the fifth consecutive month month-on-month
Data released by the German Federal Statistical Office showed that due to the decrease in new orders outside the euro zone, after adjusting for seasons and working days, German industrial new orders fell by 0.4% month-on-month in June this year, the fifth consecutive month-on-month decline. German new orders from abroad in June decreased by 1.4% month-on-month; new orders from outside the euro area decreased by 4.3% month-on-month. In addition, the German Federal Statistical Office adjusted German industrial new orders in May this year from an initial increase of 0.1% month-on-month to a month-on-month decrease of 0.2%. #Pe Coated Cup For Cup Paper
The German Federal Ministry of Economics and Climate Protection issued a statement on the same day saying that due to the uncertainty brought about by the Ukraine crisis and the shortage of natural gas, the demand for new industrial orders continued to be weak, and the outlook for the industrial economy remained subdued.
2. Demand slows down, the risk of economic recession increases, and high-end competition kicks off
Since the beginning of this year, thanks to the rapid development of the textile industry and low labor costs, export orders for textiles and clothing in Southeast Asia have surged, and export earnings have been strong. But growth in new orders has slowed since the middle of the second quarter, and profits are expected to shrink sharply in the second half of the year. The decline in new orders is mainly due to shrinking consumption in external markets, especially the US and EU regions, which face rising import inventories, as well as high inflationary pressures in the second half of 2022 and early 2023. #Dihui Pe Coated Paper Sheet
In addition, the impact of the conflict between Russia and Ukraine is still ongoing, and the risk of rising global inflation has escalated. Sales in the United States and Europe are on a downward trend. Buyers are cautious about placing new orders, and it is not uncommon to postpone or cancel orders. The end-consumer market has shrunk seriously, and many factories have begun to lack orders, so optimization measures such as holidays, time off, and even layoffs and salary cuts have been “blooming everywhere”. This year’s situation seems to be far more serious than last year’s epidemic period.
That is to say, orders in developed countries are decreasing rapidly, which is a nightmare for many manufacturing powerhouses. The advantages of South Asian countries and Southeast Asia are basically demographic dividends and low costs, generally in the low-end industrial chain. But with rising labor costs and rising freight prices, those dividends have disappeared under the pandemic. In the era of weight reduction, it has become a “worthless” competitiveness. The real test is the level of enterprise manufacturing capabilities and products, not low-end manufacturing at low cost. #Roll Bottom Paper Manufacturer
Under the current severe economic situation, high-end manufacturing industries such as semiconductors, photovoltaics, electronics, and automobiles all require more sophisticated technologies, parts and talents. Therefore, for the global manufacturing industry, the iteration from “industrial chain” to “value chain” The update is progressing rapidly, and the reshuffle of the upstream plastics, chemical industry, and supporting parts, printing and packaging industries is also accelerating.
Post time: Aug-16-2022