Review 2022 and Forge ahead in 2023 | Chen Xinwei: Focus on building a high-end, intelligent and green modern industrial system and comprehensively build a strong chemical fiber country
Since 2022, facing the complex and severe domestic and international situations and the impact of multiple factors, the chemical fiber industry has been operating under pressure. Crude oil prices fluctuate sharply at high levels, downstream demand continues to be sluggish, the overall production and operation situation of the chemical fiber industry is grim, and it is common for companies to increase revenue without increasing profits. However, in such an environment, the chemical fiber industry has shown strong resilience, and there are also bright spots in industry development. Recently, a reporter from Textile and Apparel Weekly conducted an exclusive interview with Chen Xinwei, President of the China Chemical Fiber Industry Association, to analyze the reasons behind the industry’s development achievements and look forward to the development prospects in 2023.
The industry is operating under pressure, but there are still many bright spots
In 2022, affected by many factors, the operation of the chemical fiber industry will encounter unprecedented challenges, and the overall production and operation situation will be severe. The overall operating load of the chemical fiber industry in 2022 will be weaker than that in 2021, the pressure on production and sales will increase, and the inventory of some products will remain high. According to data from the National Bureau of Statistics, chemical fiber output from January to November 2022 was 61.77 million tons, a slight decrease of 0.1% year-on-year. Among them, the growth rate dropped significantly in the second quarter and fell to negative growth in the third quarter. The pressure on industry profitability is particularly acute, and companies are increasing revenue without increasing profits. Data from the National Bureau of Statistics show that from January to November 2022, the operating income of the chemical fiber industry increased by 6.4% year-on-year, but total profits decreased by 65.05% year-on-year; the revenue profit margin was 2.13%, a decrease of 4 percentage points from 2021. The profit contribution of chemical fiber accounts for 12.5% of the profits of the textile industry.
Investigating the reason, Chen Xinwei said that the core influencing factor is insufficient demand. The textile industry’s economic operation will generally show a slowdown in 2022. Judging from the start-up rate of major chemical fiber downstream industries, it is generally lower than the same period last year. In addition, due to the repeated impact of the epidemic, the uncertainty in the operation of domestic and foreign supply chains and the resumption of work and production of enterprises has increased, which has brought great resistance to the normal production and operation of chemical fiber enterprises, especially small enterprises. High and sharp fluctuations in crude oil prices have also seriously dragged down the chemical fiber market. In the first half of the year, crude oil prices fluctuated and rose, with the highest increase exceeding 60%, which significantly increased the raw material costs and energy costs of the chemical fiber industry, squeezed corporate profits and occupied a large amount of working capital. In the second half of the year, crude oil prices fell rapidly, once falling back to the level at the beginning of the year. Although the company’s raw material costs decreased significantly, the chemical fiber market lost support. Product prices continued to fall, making sales more difficult. At the same time, inventory depreciation also seriously eroded corporate profits.
Chen Xinwei said that even under such a severe development situation, there are still bright spots in the operation of the chemical fiber industry. First, the domestic carbon fiber industry still maintains a high level of prosperity, market demand continues to increase, production capacity scale grows rapidly, production lines are basically operating at full capacity, and multiple new projects are racing against time to meet construction deadlines. According to feedback from key enterprises, main revenue and profits in the first three quarters have increased significantly compared with the same period last year, and it is expected that the entire industry can still achieve overall profitability. Second, under the guidance of the country’s new development concept and the “double carbon” goal, the scale of the bio-based fiber industry has maintained rapid growth. For example, the key technologies of polylactic acid fiber have continued to make breakthroughs and attracted more attention. The development trend of the lyocell fiber industry is obvious. Third, the pace of research and development of differentiated and functional fibers is accelerating. Large companies that do well in product development, branding, and internationalization have relatively better profits and are less affected by market fluctuations. Fourth, chemical fiber exports still maintain a good growth trend. Under this difficult situation in 2022, the growth of chemical fiber exports reflects the increase in international market demand and the improvement of the competitiveness of my country’s chemical fiber products. improve. According to China Customs statistics, the total export volume of major chemical fiber products from January to November increased by 9.44% year-on-year, which is higher than the average annual growth rate since the “Thirteenth Five-Year Plan” (2015) (7.3%) increased by 2.1 percentage points. Among them, acrylic fiber exports grew strongly, with a year-on-year increase of 203.75% from January to November. In addition, the export of polyester bottle flakes has also performed well. After the export volume increased by 36% year-on-year in 2021, it will continue to increase significantly by 42.99% from January to November 2022. Russia, the Philippines, Turkey, Algeria and Peru are the top five export markets.
Steadyly build a high-end, intelligent, and green modern industrial system
The most important thing for the chemical fiber industry in 2022 is that the Ministry of Industry and Information Technology and the National Development and Reform Commission jointly issued the “Guidelines on the HighQuality Development of the Chemical Fiber Industry instructions”. The “Guiding Opinions” put forward a series of high-quality development goals to guide the chemical fiber industry to build a high-end, intelligent, and green modern industrial system and comprehensively build a strong chemical fiber country. Chen Xinwei said that the “Guiding Opinions” issued by the two ministries and commissions are the four consecutive plans or guiding opinions issued by the national ministries and commissions in the form of national industrial policies to promote the development of the chemical fiber industry since the “Eleventh Five-Year Plan” in 2006, demonstrating the importance of the chemical fiber industry. highly valued. The issuance of the “Guiding Opinions” is a new starting point for the national ministries and commissions to mobilize the entire industry. It fully reflects the country’s determination and confidence in vigorously promoting the high-quality development of the chemical fiber industry and will definitely have a positive impact on the development of my country’s chemical fiber industry. deep influence.
Same asEight categories of popular fibers were released at the Fashion Trends 2022/2023 conference. As an important extension activity of “China Fiber Trends”, the Fiber Road event went to downstream enterprises to share the fiber varieties released by Tongkun·China Fiber Trends 2022/2023, and understand the pain points and difficulties of terminal brands in product development, Exploring feasible paths for collaborative innovation lays the foundation for leveraging the value-added role of innovative fibers in end products. The Cloud Fiber Road Millennium® Discussion on “Bomb” series of activities has also built a bridge for Huafeng and downstream enterprises to strengthen communication, enhance understanding, and dock demand.
In addition, 14 chemical fiber companies including Shenghong Group, Jilin Chemical Fiber, and Tangshan Sanyou were selected into the Ministry of Industry and Information Technology’s list of top 100 textile and apparel brands to be cultivated (2022 edition). The brand cultivation and construction work of chemical fiber companies has achieved remarkable results.
Implement the spirit of the 20th National Congress and move towards a strong country in chemical fiber
In 2022, the 20th National Congress of the Communist Party of China was successfully held, providing an action guide for the high-quality development of the textile industry. In particular, the report of the 20th National Congress proposed high-quality development and other directions. The “Guiding Opinions on High-Quality Development of the Chemical Fiber Industry” is consistent with the development ideas proposed in the report of the 20th National Congress, which brings many opportunities for the future development of the chemical fiber industry. Regarding how to seize these opportunities, Chen Xinwei made suggestions from the perspectives of industry and enterprise.
For the industry, efforts should be made to promote high-quality development of the industry from the following five aspects. The first is to improve the innovation and development level of the industrial chain, such as building a solid foundation for innovation, strengthening regional layout, and cultivating leading enterprises; the second is to promote the high-end development of new fiber materials, such as increasing the added value of conventional fibers, improving the production and application level of high-performance fibers, Accelerate the development of bio-based chemical fibers and degradable fiber materials; the third is to accelerate intelligent digital transformation, such as strengthening the research and development and application of intelligent equipment, carrying out the construction of smart factories, and promoting the digital transformation of enterprises; the fourth is to achieve green and low-carbon transformation of development methods, such as Carry out the construction of green factories, green products, and green supply chains, promote energy-saving and low-carbon development, improve recycling levels, expand green fiber production, and build a clean, low-carbon, and circular green manufacturing system; fifthly, we must implement increasing varieties, improving quality, and creating brands The “three-product” strategy includes optimizing the supply structure, strengthening standard support, and promoting brand building. Increase the supply of high-quality products, optimize the high-performance fiber production and application system, cultivate well-known fiber brands, expand fiber application fields, lead the improvement of textile value from the raw material side, and serve the development of strategic emerging industries.
For enterprises, firstly, they must pay attention to environmental changes and policy trends, and formulate response strategies and effective competitive strategies; secondly, they must improve their internal strength and enhance their own development resilience; thirdly, they must do a good job in green and low-carbon transformation, such as focusing on energy conservation and reduction. consumption and the national “double carbon” strategy to reduce costs and increase efficiency; fourth, we must accelerate the advancement of informatization and intelligent construction; fifth, we must actively seek breakthroughs and adjustments in product innovation to increase product added value; sixth, we must comprehensively improve production management levels , to create efficient and agile operating capabilities to help reduce costs and increase efficiency; seventh, we must focus on the long term and formulate medium- and long-term development strategies for the enterprise.
Chen Xinwei said that in 2023, with the adjustment and optimization of national epidemic prevention and control policies, it is expected that the chemical fiber industry and enterprises may face greater challenges in the short term. After this painful period, the industry may enter a relatively benign period. development situation. 2023 is the first year to fully implement the spirit of the 20th National Congress of the Communist Party of China, and is also a critical year for the 14th Five-Year Plan to connect the past and the next. The chemical fiber industry must continue to implement the overall requirements of the “Guiding Opinions on the High-Quality Development of the Chemical Fiber Industry” and key tasks, and move towards high-quality development that is high-end, intelligent, and green.
Specific to the operation of the chemical fiber industry, we must persist in seeking progress while maintaining stability in the current complex environment. First, it is necessary to carry out industry self-discipline and prevent operational risks. At this stage, the main focus is on reducing inventory and stabilizing the market, avoiding ineffective and vicious competition, and ensuring the safety of corporate cash flow capital chains. Second, enterprises must coordinate epidemic prevention and control and production and operations, properly arrange leave and return to work for infected employees, and make arrangements in advance for the return of workers who return to work after the holidays to ensure normal production. The third is to continue to deepen supply-side reform, eliminate backward production capacity and mergers and reorganizations in accordance with laws and regulations, while appropriately controlling the speed and pace of new production capacity. The fourth is to promote product research and development innovation, lead demand, and create demand.
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