Since the epidemic ravaged the opening year of 2020, companies in almost every industry have been under tremendous pressure to survive. The textile industry is generally facing a shortage of orders from downstream to upstream. However, China's leading polyamide fibre enterprise Highsun Holding Group, located in Changle, Fujian Province, has been reporting a lot of successes with new projects in operation.
On March 4, the first phase of Fujian Shenma New Material Co., Ltd. of Highsun Holding Group with an annual output of 200,000 tons of cyclohexanone project successfully produced qualified products; On March 24, the groundbreaking ceremony of the second phase expansion project of 200,000 tons of cyclohexanone was held in Fujian Shenmar New Materials Co., Ltd; On March 25, Henan Shenma Nylon 6 civilian yarn project, Phase I project, in which Highsun Holding Group's participation was successfully commissioned for a trial run, filling a gap in the market in Henan Province...A series of "expansion" and the current epidemic caused by the industry "losses" formed a sharp contrast. How does Highsun Holding Group consider this? Why it is determined to move faster at a time of increasing uncertainty? Is it desperation or optimism for the future? The wise man said in the column of "the fight against the pademic" had an exclusive dialogue with Mei Zhen, General Manager of Chemical Fiber Sector of Highsun Holding Group. To understand the consideration and production and operation status behind this operation of Highsun.
China Textile: As mentioned above, in the first quarter when the epidemic was at its most serious, many projects of Highsun Group went into production or started construction, which is a big stimulus for the whole industry. Please tell us how the group is considering.
Mei Zhen: Since the epidemic occurred, Highsun Holding Group focuses on epidemic prevention and development at the same time; While grasping the work of epidemic prevention, make every effort to ensure the smooth operation of production and the orderly operation of various projects. Several projects that went into production or started construction in March are moving forward in an orderly fashion according to the original timeline of the project. The project goes into production or starts construction on time, and we also boost the confidence of the group's development under the epidemic situation, which injects a cardiotonic agent into the development of Highsun in 2020. These projects are mainly based on the needs of the Group's industry chain development, which will help to make the Group's industry chain advantages more complete, industry chain cost optimization and industry chain access more comprehensive. The centralized production of a number of projects in the post-epidemic era is also conducive to the use of squatting effect to give full play to the advantage of Highsun Holding Group's accumulated strength.
China Textile: As the leader of private polyamide fibre enterprises in China, how did Highsun Holding Group respond quickly to the epidemic?
The intelligent level of Liheng nylon under Highsun has always been the benchmark in the polyamide industry. Has the industry's staffing gap caused by this outbreak been alleviated by intelligence? Please tell us about your experience.
Mei Zhen: Since the outbreak of the epidemic, Highsun Holding Group immediately responded and adopted the full enclosed management of the plant, and conducted a comprehensive inspection of all employees. Relying on the OA system to enable the health report function, establish employee health files, and quickly understand the health status and arrival information of employees. For personnel who have not returned to the factory, with the software GPS positioning function, fixed-point assessment of home isolation location.
During the prevention and control of epidemic, the "digital brain" of Highsun shows more advantages. From the moment we receive the order, the "digital brain" will quickly decompose the task: if there is inventory, send shipping instructions to the warehouse; If there is a need for new product development, order customization from the R&D department; if there is a need for production scheduling, refine the production tasks and send scheduling instructions to the production line...In Highsun Holding Group's subordinate Force Heng Nylon, the information transmission across multiple departments can be completed by employees remotely due to the intelligent decomposition of "digital brain".
In the production workshop, the front-line employees cannot return to work on time. The company relies on automated equipment, such as automatic film wrapping machine, robotic arm, automatic packaging line, etc., centralized management of workshop machines, centralized management of workshop machines, flexible deployment of personnel, rapid replenishment of surplus manpower to the production line gap, to ensure the stable operation of the production line. After the completion of production, sales staff through a small program and e-commerce trading platform "Alibaba International Station" to accelerate business communication with downstream customers to ensure that during the epidemic does not "power outage". After production, sales staff through the small program and e-commerce trading platform "Alibaba International Station" to speed up business communication with downstream customers to ensure no "power outages" during the epidemic.
During this time, the company's managers, whether at its subsidiaries in Changle and Lianjiang, Fuzhou, or on the factory floor in Nanjing, Jiangsu or Maastricht, the Netherlands, production, inventory, sales and other real-time data can generate various types of data reports at any time to provide data support for decision-making.
In the prevention and control of epidemic, we have accelerated the optimization and promotion from "normal" to "fine". Next step, Highsun intends to build intelligent manufacturing factory to realize the intelligent automation of packaging, warehousing and logistics of the whole factory, Traceability from the receipt of production plan to the delivery of products; accelerated transmission rate and operation and maintenance efficiency, so that Internet technology dividends generate more capacity improvement.
China Textile: So what is the current situation of Highsun Holding Group's construction? What are the losses suffered by companies so far since the epidemic? What strategic adjustments have been made to the company's operations and production in response to the impact? What will be the follow-up measures to restore growth or find new sources of growth?
Mei Zhen: Since it's the chemical fiber industry, the plant has been operating without shutdown since the epidemic outbreak, including during the Spring Festival. At present, the operating rate gradually improved, the overall operating rate of 90%, which is close to the year before the start of the situation, the preliminary conditions for increased production, Liheng nylon polymerization plant has been more than 100% operating rate. However, due to the lack of downstream enterprises operating rate and greater inventory pressure, later it will be subject to the downstream operating situation to adjust the production line operating rate.
The current difficulties encountered by enterprises are mainly the lack of orders and market demand. It is expected that the market will continue to be quiet, and it will take time for orders to recover, especially for downstream enterprises with high inventory of products. Optimistic estimates of downstream terminal to speed up the start of work until after March, will miss the spring 2020 demand for clothing.
Secondly, due to the downstream production cut down significantly more than the upstream and earlier than the upstream, coupled with the recent decline in oil prices, benzene prices and other commodities across the board, so under the impact of the epidemic, despite the stalled CPL spot negotiations, the probability of the final settlement price is lower than previously, the company will face serious price risk in the future.
Of course, the epidemic has already occurred, we can not sit idly by. Since the epidemic, our sales team has been making phone calls instead of door-to-door visits, strengthening communication with key customers. Timely grasp the market information, flexible adjustment of sales strategy; adjust production line for outstanding orders, sales and production to reduce unnecessary inventory occupancy; optimize delivery and logistics modes to release order and inventory pressure. We will continue to pay attention to and collect the latest market information from upstream to downstream, and make breakthroughs in key areas, especially in the following areas: client's return to work and updated purchasing plans.
China Textile: In view of the impact of the current epidemic, how do you predict the situation of enterprises and the industry in the first quarter of 2020?
Mei Zhen: Due to the epidemic, the delay in the start of the entire industrial chain may extend the off-season textile season, which will also lead to the decline in production capacity of textile and apparel enterprises, rising costs, demand and loss of customers; textile retail enterprises are under tremendous pressure from rents, inventories and cash flow, which will have a negative impact on the middle and lower reaches of the industry chain, such as fluctuations in demand, pressure transmission and business impact.
China Textile: National and local governments have launched numerous "policy bonuses" to promote economic recovery. What's that? What other support do you think is needed for the survival of subsequent textile and chemical fiber enterprises?
Mei Zhen: At present, Highsun Holding Group is applying for the following preferential policies: policy financial support for leading industrial enterprises; national epidemic prevention key protection unit loan discount. On the morning of March 6, the signing ceremony of comprehensive cooperation between Highsun Holding Group and Agricultural Bank of China Fuzhou Branch was held in Highsun Synthetic Fiber Technologies. According to the agreement, Agricultural Bank of China Fuzhou Branch will provide intentional financial support and comprehensive financial services for Highsun Holding Group for the following purposes: Highsun Holdings Group's future chemical fiber and chemical industry upgrade to meet the epidemic impact and resume production under the capital requirements of Highsun, to help Highsun Holding Group to build a competitive world-class enterprise with full power and stable production.
In addition, we also tend to apply for preferential policies including: tax benefits, waiting for the fiscal notice; social security deferred payment; stay-at-home salary subsidy for Hubei staff; preferential policies for electricity consumption; for great natural gas consumption during the epidemic, the next step is to apply for subsidies from the national policy.
Undoubtedly, textile and chemical fiber enterprises are currently under tremendous pressure. We hope that in the future there will be special subsidies and low-interest loans for the epidemic to alleviate the financial pressure on enterprises. In addition, land use tax and property tax are currently only applicable to small and medium-sized enterprises, but can they be extended to all enterprises to reduce business stress?
China Textiles: Facing this great epidemic, what inspiration do you have? What do you think are the new requirements for the supply chain collaboration system of Chinese textiles as a result of the epidemic?
Mei Zhen: This epidemic has really brought a lot of thinking to business operations. For example, information sharing between members of the supply chain: sharing information such as sales data through channels that allow upstream companies to directly share sales data with each other. Improve the accuracy of market demand forecasting and supply chain coordination by understanding customer demand information.
At the same time, the industry needs to further improve flexibility: on the one hand, it should be able to offer a variety of products to customers, and on the other hand, it should be able to quickly change processes to produce new products or quickly change service processes to provide new services.
In terms of supply chain, I think we should focus on the market adjustment function of the supply chain in the future to achieve a balance between supply and demand in the market, and respond quickly to the unpredictable and uncertain market demands in the future. At the same time, we need to minimize stock-outs, price reductions and obsolete inventories, and at the same time put forward requirements to suppliers at every stage based on speed, flexibility and quality.