Spandex Industry Staged "Ice And Fire Double Days": Overall Profit Decline, Leading Performance Growth

At the moment, the northern hemisphere is in hot summer. From sexy, fashionable, chlorine resistant swimsuit to long stockings with curvy beauty, from a soft, elastic sling shirt to a capable and concise T-shirt, it is a must for fashion women in summer. In this single item, the "shadow" of spandex is everywhere.

As the most widely used elastic fiber, spandex is known as the "monosodium glutamate" in the textile industry, and it is not without reason. In addition to those popular summer single products, spandex is also widely used in autumn and winter clothing and industrial applications. It can be said that although spandex is a small quantity in the chemical fiber industry, it plays an irreplaceable role.

Then, what is the market situation of our spandex industry since 2018? What are the new trends of leading enterprises in product R & D? How is the capacity expansion of the industry? What is the current market competition pattern of spandex in China? Recently, the China Textile newspaper reporter combed 3 annual reports of spanning spandex business or main business spanning the spandex listed company, Huafeng spandex, Xinxiang chemical fiber and Taihe new material, and interviewed the relevant leaders of the China Chemical Fiber Industry Association spandex branch, and several spandex industry insiders.

Big industry profits decline overall

Leading performance is "flying against the trend".

Although spandex industry still has much room for growth in the long run, there are inevitably some "depressed" interludes in a certain period of operation. The spandex market in 2018 belongs to the "depressed" one.

According to data from China Chemical Fiber Industry Association, in 2018, China's spandex industry realized a total profit of 939 million yuan, down 44.01% compared to the same period last year, with a profit margin of 3.56%, down 3.29 percentage points compared with the same period last year, and its profit margin has been lower than the average level of chemical fiber industry for the first time in recent years. The main debt paying ability index and profitability index of the spandex industry decreased year by year, showing a low overall trend.

"In previous years, the profitability of the spandex industry was always higher than that of the chemical fiber industry. At that stage, spandex manufacturers accelerated the expansion of production capacity. However, since 2017, the domestic spandex market has entered the downstream channel, but the price of the product is still on the rise, so the market is still good. However, by the end of 2018, the spandex industry was in a downward cycle as a whole. Under the pressure of low prices of main raw materials such as PTMEG and MDI, the prices of main varieties of spandex fell to varying degrees, and inventories also increased, resulting in a decline in total profit and profit margins and a decline in overall profitability. Li Zengjun, vice president of spandex branch of China Chemical Fiber Industry Association, said.

In this regard, Taihe new material company also said: "in 2018, although the downstream demand maintained two digit growth, but because the new capacity is relatively large, and backward production capacity exits less, the problem of oversupply in the spandex industry is still outstanding, the industry maintains a weak downward adjustment, the price decline is more obvious, and the industry profit has dropped compared with that in 2017."

"The industry's capacity is increasing faster, and the external environment is also facing great challenges. The market competition is more intense, the industry deficit has expanded, and some Spandex Enterprises have insufficient orders, so the overall development of the industry is not optimistic." A spandex enterprise marketing department responsible person to the reporter sigh.

However, it is worth noting that in 2018, under the Great Depression of the spandex industry, the performance of several leading enterprises has been "contrarian".

As the "big boss" of the domestic spandex industry, Huafeng spandex's performance in 2018 has been in an upward trend, and its competitive advantage has been significantly improved. The 4 main indicators, spandex production, sales volume, revenue and net profit, have achieved the best results in history.

According to the financial data, in 2018, the output of Huafeng spandex was 143 thousand and 900 tons, achieving a profit of 4 billion 436 million yuan, an increase of 6.89% over the same period last year, and a net profit of 445 million yuan, an increase of 15.49% over the same period last year. The company relies on the modern data analysis system such as ERP system, production line costing model, etc., according to the analysis results of big data, through the implementation of targeted refinement management measures, it keeps the advanced level of the global industry in the areas of production cost control, energy saving and consumption reduction, and ensures the relatively stable profitability of the company. Huafeng spandex company said so.

Xinxiang chemical fiber spandex plate also achieved good results in 2018. During the period, its production spandex 71823 tons, spandex production and sales increased, gross profit increased, its spandex plate realized revenue of 1 billion 940 million yuan, an increase of 42.32% over the same period, spandex revenue accounted for 43.17% of the total revenue of the company, gross margin was 9.56%.

The output and sales volume of Taihe new material spandex plate increased significantly in 2018. Its output was 59089 tons, an increase of 68.53% over the same period last year, and its output increased significantly last year due to the new spandex production of Ningxia Ning Dong Tai and Xin Cai company. During the period, the spandex plate achieved a revenue of 1 billion 238 million yuan, accounting for 57% of the total revenue of the company, and its revenue grew by 30.59% over the same period.

Perhaps, this is the answer, "there is no bad industry, only to do a bad business."

Increase in exports along the "one belt" road

Differentiated products highlight the bright spot effect

Under the background of the overall downtrend of the spandex industry in 2018, is it not a bright spot? No, not too. It is worth noting that the spandex industry in 2018 showed two highlights.

First, with the increasing demand for functional and differentiated textiles from downstream users, the enthusiasm of Spandex Enterprises in the development of new products continues to rise, so that the market and profitability of some differentiated spandex products are relatively good.

For example, Huafeng spandex continued to focus on differentiated product development and upgrading of technology in 2018, and its advantages and benefits of high value-added products appeared initially and gradually occupied a certain market share.

"The company's high temperature resistant black spandex series and super chlorine resistant spandex series products have gradually expanded the market share. The market share of black spandex, high added value and super chlorine resistant market has been steadily stabilized and expanded, which has become a new profit growth point for the company. At the same time, the company's newly launched GRS products can achieve industrial production, and the products of easy setting, dyeable spandex, high-performance coarse denier spandex, side diaper, spandex and other products will be further recognized by the market. The company will further speed up technological transformation and market cultivation, enhance product performance, expand sales channels and enhance overall competitiveness. A senior executive of Huafeng spandex company told reporters.

In 2018, Xinxiang chemical fiber also made an in-depth study on the production technology of super soft spandex fiber. Its key technology has been successfully applied to the production stage, and the upgrading of the spandex equipment has been upgraded from the initial 24 to 120. Enterprises also support robot automatic sorting, automatic storage. "We are committed to large-scale production of super soft differentiated spandex fibers, creating the greatest economic benefits, will continue to increase the proportion of high value-added spandex fiber, improve the competitiveness of the company's spandex fiber products." Xinxiang chemical fiber said.

Two, China's Spandex export volume has increased by two digits.

According to data from China Customs, the total export volume of spandex in China was 64 thousand and 600 tons in 2018, an increase of 11.94% over the same period last year. From the point of view of export flows, with the promotion of the "one belt and one way" initiative, China's exports to Turkey, Vietnam, Korea, China, Taiwan and Egypt occupy the top 5 of the exporters, and the volume of exports to Turkey is still the largest.

Data show that in 2018, China's Spandex exports to Turkey amounted to 10376 tons, an increase of 32.35% over the same period, and the export volume was $50 million 622 thousand, up 53.23% from the same period last year.

In this wave of "external performance", Huafeng spandex has become a member of the Turkey market. It set up a trading company in Turkey, Huafeng Turkey, which gained 4 million 624 thousand and 300 yuan in 2018.

In this regard, Li Zengjun said that Turkey is located in the Eurasian joint, is a traditional textile power, the demand for spandex is relatively strong, while the local supply of spandex is relatively limited. In recent years, our spandex plant has increased its pioneering efforts, which has played an important role in promoting the sale of spandex in Turkey.

In addition, in 2018, spandex exported 7587.5 tons to Vietnam, an increase of 42.36% over the same period last year, with an export volume of US $40 million 718 thousand, an increase of 48.76% over the same period last year. The export volume to Egypt was 4335.5 tons, an increase of 42.98% over the same period last year, with an export volume of 2120.1, an increase of 50.33% over the previous year, 3954.8 tons for Indonesia, an increase of 41.64% over the same period last year, and an export volume of 18 million 22 thousand dollars, an increase over the same period last year.

Xinxiang chemical fiber also said that in 2018, the company strengthened the development of new overseas markets of spandex, and achieved good results.

Leading companies expand their pace without stopping

Capacity concentration to enhance integration speed up

According to the data from China Chemical Fiber Industry Association, in 2018, the total capacity of spandex in China was 816 thousand and 200 tons, an increase of 19 thousand and 500 tons compared with 2017, an increase of 2.45% over the same period last year. The output was 683 thousand and 200 tons, an increase of 132 thousand and 100 tons compared with 2017, an increase of 10.84% over the previous year, which is larger than the 7.99% increase in 2017.

In the spandex new project construction, 3 leading companies of listed companies have also become the main force for expanding production.

As the most productive spandex production enterprise in China, Huafeng spandex is not satisfied. In recent years, it is still a pioneer in expansion. In addition to Zhejiang's headquarters, Huafeng Chongqing spandex Co., which has already brought strong support to the company's performance, is the result of its expansion to the West.

Huafeng Chongqing spandex Co., Ltd. annual output of 60 thousand tons of differential spandex project as early as 2013, has been launched, has been put into operation. In 2018, Huafeng Chongqing spandex Co., Ltd. achieved a profit of 2 billion 300 million yuan and a net profit of 339 million yuan.

More than that. Huafeng Chongqing spandex Co., Ltd. annual output of 100 thousand tons of differential spandex extension project also started in April 2018, located in Chongqing Fuling District Bai Tao Chemical Industrial Park, at present, the first phase of the project is steadily advancing, and is expected to be put into operation by the end of this year. The new capacity will be more environmentally friendly, economical and efficient, and will further expand the competitive advantage of Huafeng spandex after its completion.

"With the full release of production capacity in Chongqing and the launch of new technologies leading to advanced technology in the future, the scale of production will further expand, and the proportion of advanced production capacity will increase significantly, which is expected to further reduce the company's production costs and improve its profitability." Huafeng spandex company said so.

Xinxiang chemical fiber company continued to invest 129 million yuan for the first phase project of the annual production of 3 * 20 thousand tons of super fine spandex fiber in 2018, and put into operation in the year. At the end of 2018, the project achieved 45 million 357 thousand and 400 yuan in the first phase, and invested 587 million yuan in the two phase of the annual production of 3*2 million tons of super fine spandex fiber project. The two phase of the project is still under construction. With the development of the new spandex project and the improvement of technology level, Xinxiang chemical fiber, a leading enterprise in the field of viscose filament yarn, has gained more and more obvious advantages in our spandex industry.

Taihe new material increased 15 thousand tons of spandex in 2018, and in 2017, it acquired the spandex production which was originally owned by Ningxia in Vietnam. Besides, the new spandex plate is still expanding.

Taihe new material continues to implement the bistatic strategy of Yantai and Ningxia. According to the plan, the new park will be built in the chemical park of the Yantai Development Zone, and a new 30 thousand tons of high value-added differential spandex project will be implemented to promote the efficiency, scale and efficiency of differential products. At the same time, a low-cost expansion strategy will be implemented in Ningxia area, with emphasis on the development of large-scale, low-cost and efficient spandex products, with a preliminary planning spandex production capacity of 60 thousand tons / year. In 2019, Taihe new material began to promote the project of 15000 tons / year high efficiency differential coarse denier spandex in Yantai Park, and promote 30000 tons / year green differential spandex intelligent manufacturing project in Ningxia park. According to the progress of the implementation of the new project, Taihe new material will gradually eliminate backward production capacity and rebuild the new competitive advantage of spandex business through the transformation of new and old kinetic energy, so as to promote the market share of nysta spandex steadily.

In addition, over the past few years, Xiao Xing has increased 60 thousand tons of capacity in the Quzhou plant. Among them, 20 thousand tons were put into operation in the first phase of 2017, and 40 thousand tons were put into operation in the two phase in 2018. The 12 thousand tons of Du Zhongxin's Spandex were added to Lianyungang (4.460, 0, 0%).

"In 2018, based on the overall transformation and upgrading of the spandex industry, upgrading quality and efficiency, and focusing on the development of high quality, the capacity and output of the industry increased by a small margin. It is noteworthy that in the past two years, on the one hand, the trend of partial capacity shutdown in the spandex industry is still continuing, for example, some of the capacity of Yongxing spandex and Sino Pacific fiber (spandex spandex) has been cut down, but on the other hand, the speed of the merger and reorganization of some leading enterprises is accelerating, which further improves the capacity concentration of the domestic spandex industry. Li Zengjun said.

In the medium to long term, with the speed of industry shuffling, China's spandex industry still has certain potential for development. By the end of 2018, spandex capacity reached 1 million 120 thousand tons, an increase of about 10% over the same period last year. China's Spandex productivity accounts for nearly 70% of the world's total spandex production capacity. China has become the largest spanning spanning producer and consumer in the world.

"From the medium to long term, our spandex industry is still facing a rare opportunity to integrate. Since 2017, some new changes have taken place in the spandex industry. The competitive advantages of some listed companies with financial strength, technological strength, and market network layout have become increasingly prominent. It is expected that the industry concentration will continue to improve in the future. At present, spandex has been widely applied in the field of textile and clothing, and has become an indispensable textile raw material. Although the overall demand growth has shown a certain slowdown, the industry still has room for growth, especially leading enterprises still have market development advantages. The spandex industry insiders said.