Breaking the “low profit” curse of the traditional textile industry

Breaking the “low profit” curse of the traditional textile industry

News from CCTV Finance on July 1 (Reporter Wang Hao) According to the Economic Voice report, recently With a profit rate of 20%, this is not a financial company, but a textile company. This really subverts people’s understanding of the traditional textile industry. It was Lutai Textile Company located in Zibo, Shandong Province that created such performance in 2013. Textile has always been synonymous with “labor-intensive, low-profit” industry. 800 million shirts are exchanged for a Boeing aircraft. This is a typical equivalent formula. How did Lutai Textile break this curse? Economic Voice reporter Wang Hao recently followed the research team of the China Textile and Apparel Federation to visit Luthai Textile to find out.

One of the sources of high profits: control of the entire industry chain

Staff: The fineness of 300-count yarn is very fine. What is the concept? It means that a kilometer long yarn only has 1.94 grams. The shirts we make with 300-count fabric are high-end and are mainly customized for high-end European and American customers.

The 300-count fabric produced by Lu Thai Textile is currently the world’s leading shirt fabric. It feels almost the same as silk. To produce such fabrics, higher requirements are placed on cotton quality. Relying on its 150,000-acre long-staple cotton base in Xinjiang, Lutai Textile controls the entire industrial chain, starting from cotton breeding and planting, to downstream spinning, bleaching and dyeing, weaving, finishing, and garment making, which not only ensures Product quality, and leaving profits for the entire industry chain. This is the secret behind Lutai’s high profits.

The second source of high profits: high-tech orientation

Staff: This is called a self-decontamination fabric. The oil on it is formulated to imitate human secretions. We put it in ordinary water and let it sit for more than ten seconds. Under the gravity of water, the grease gradually turns into a ball shape and peels off with a slight shake. For clothing made of such fabric, use cold water and a small amount or no detergent, and put it in the washing machine for a few minutes to gently spin it. The washing is very clean, which saves energy and reduces pollution.

In Lutai, there are many high-tech fabrics like this. Luthai is one of the first batch of high-tech enterprises in the country. It has technology research and development centers and laboratories. Two of its technologies have won the National Science and Technology Progress Award. And half a month ago, it just won the third China Industrial Oscar. “China Industry Award”, becoming the only textile company among the 11 award-winning companies.

It may seem a little heretical for a textile company to attach so much importance to technology research and development, but the direct effect is that the price per square meter of Luthai Textile’s exported fabrics is 30% higher than the average. This technology-oriented development path is the second secret behind Lutai’s high profits. Liu Zibin, general manager of the company, introduced:

Liu Zibin: Unlike some companies, we may just start using some high-end equipment to produce some popular products. Our company has been positioned at the high end of the international market from the beginning, and our listed company’s investment in product research and development Accounting for 5% of sales revenue, 50% of the products are new products, and 65% of the sales revenue is created by new products.

The third source of high profits: automation transformation

The third secret behind high profits is Lutai’s automated transformation of production and operation links, which has greatly improved production efficiency and saved labor costs. Taking “reeding”, the previous process of weaving, as an example, Luthai has introduced state-of-the-art automatic reeding machines. One machine can save more than 30 people on labor. Automated transformations like this have a huge impact on various fields such as bleaching, dyeing, warehousing and logistics. All aspects are in progress.

Staff: The original manual reeding was very slow, time-consuming and error-prone, so we introduced the automatic reeding machines we see now, which can thread 140 yarns per minute. It is 8.6 times faster than manual reeding. Such a piece of equipment can save more than 30 people in labor.

The fourth source of high profits: refined management

Based on the previous hard work, the fourth secret behind Lutai’s high profits is the company’s management innovation. Luthai is currently studying Toyota’s TPS Toyota Production System and focusing on building the LTPS Lutai Production System to further improve the company’s operating efficiency.

Eliminating backward production capacity and transforming and upgrading are common problems faced by all manufacturing industries in my country. Lu Thai Textile has explored a technology-oriented development path, allowing the textile industry to get rid of the “low profit” cycle. However, this requires a large amount of early investment in scientific research and talent, and more importantly, a change in the thinking of the corporate management and a firm determination to transform. Company Chairman Liu ShizhenI feel deeply about this:

Liu Shizhen: If you want to upgrade and transform, you must invest. You said what percentage should be invested in science and technology? It is easier said than done. It takes so many people to do research. The concept of cost needs to be slowly changed. Based on our experience over the years, we must do this. If we do not do this, the company will lose the source and power of healthy, stable and sustainable development.

Future path: improve the conversion rate of fabrics into ready-made garments

In the current profit structure of Lu Thai Textile, more than 70% comes from fabrics. In the future, Lu Thai Textile will also regard terminal brand building as a strategic focus, through physical stores + e-commerce model , improve the conversion rate of fabrics into garments. Company Chairman Liu Shizhen introduced:

Reporter: In the future strategic positioning, will your brand develop new profit growth points in the terminal market?

Liu Shizhen: This is the path we must take. If we give a lot of good fabrics to others to make clothes, why don’t we make them ourselves? We cannot just make wedding clothes for others. But it is difficult to actually take this step. We are now putting so much energy into using foreign brands on the one hand, and making our own brands on the other hand, but we still focus on our own brands.

Disclaimer:

Disclaimer: Some of the texts, pictures, audios, and videos of some articles published on this site are from the Internet and do not represent the views of this site. The copyrights belong to the original authors. If you find that the information reproduced on this website infringes upon your rights, please contact us and we will change or delete it as soon as possible.

AA