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Abandoning Ethiopia To Indonesia, What Is The Global Significance Of The Joint Stock Issue Layout?

2019/6/19 17:15:00 20

Joint Venture Shares

                                                                     

     

Over the past two years, the increasingly complex domestic and foreign market environment has made domestic textile enterprises actively carry out the global industrial layout. Before that, many leading enterprises went to Vietnam to invest and build factories, which is a great performance. The Jiangsu Unicom textile Limited by Share Ltd (hereinafter referred to as "Lian fa share") is no exception. Its announcement recently announced that it will spend 1 billion 300 million yuan to invest in the construction of high-end woven fabrics in Indonesia. Subsequently, the joint stock company also announced the termination of cooperation agreement with Ethiopia. Why did Ethiopia lose its investment in Indonesia? Will Indonesia become the next hot spot for domestic textile enterprises?

A battle of no doubt

Objective assessment of investment risk

With the continuous rise of domestic labor costs, lufa shares actively complies with industrial spanfer. trend To spanfer capacity gradually to low cost Southeast Asian countries, and jointly invest and buy shares. Garment making (Kampuchea) company, AMM garment (Kampuchea) company, and Lian FA Heng Yu (Kampuchea) clothing company, and plans to spanfer the joint garment production capacity to the joint wing Heng Yu. Luen Fat shares have said that Ethiopia will be the focus of the joint venture shares in the future layout area.

As early as November 29, 2016, the joint stock and China Civil Engineering Construction Corporation, and the Ethiopia government, on behalf of the Ethiopia Investment Committee, signed the memorandum of understanding on the development of the textile and garment industry in ddwa, Ethiopia. According to the plan, the textile and apparel industry chain project in the DDDA Industrial Park in the country has an area of 90 hectares, of which the dyeing fabric factory expects 2 million 500 thousand months of production per month, and the yarn dyed fabric factory expects a monthly production capacity of 2 million 500 thousand meters. Garment factory The total production capacity is expected to be 3 million, and the spinning plant is expected to be 200 thousand spindles. At that time, the joint stock company once disclosed that the agreement only tentatively decided the initial investment scale. The scale and investment schedule of the specific project were verified by the company and confirmed by the three party negotiations. After that, the company will invest and implement step by step according to the needs.

The main reason for the termination of the cooperation agreement is that the company believes that the development of textile and garment industry in dredawa is likely to have a long investment recovery period and a low rate of return on investment, which is not in line with the company's external investment and risk control requirements. Luen Fat shares said that when the future conditions are ripe, the investment in Ethiopia will be reconsidered.

In this regard, the industry experts believe that the risks and opportunities of foreign investment coexist, the timing is different, the environment is different, the joint stock lots of due diligence and site selection site assessment, so that it can correctly understand the project proceeds and risks, so as to make decisions, leading enterprises should have such a sense of rationality.

Expand Indonesian fabric Market

Enhancing enterprise competitive advantage

It is even more resolute and resolute to terminate cooperation with Ethiopia so that it can invest 1 billion 306 million yuan in Indonesia to build factories. The announcement of the issuance of Luen Fat shares shows that in order to make full use of the advantages of resources, labor and customers in Indonesia, expand the market of high-grade woven apparel fabrics in local and international markets, and enhance the competitive advantage of the company in the manufacturing field of high-grade woven fabrics, the joint stock will cooperate with Indonesia PTUngaranSariGarments (hereinafter referred to as "PTU") to invest in the construction of high-grade 66 million year old woven fabrics in Indonesia. The project is divided into two phases. The first stage will form an annual production capacity of 36 million Beige weaving, and the second stage will form an annual output of 30 million meters of dyed and dyed fabrics.

Regarding the project address, the joint venture shares with Indonesia PT.KawasanIndustriKendal (Kendall Industrial Park Limited, hereinafter referred to as "KIK") has signed a memorandum of understanding on the purchase of land for investment in textile and garment industry in the Indonesia Kendall Industrial Park. The two sides have invested in the purchase of land in the Kendall Industrial Park for textile and garment industry, and KIK has provided cooperation intentions for the company to provide various infrastructure services, to win preferential policies for the company, to assist companies in handling various formalities, to ensure the conditions required for the production and operation of the company, and to plan exclusiveness in the park.

It is understood that the joint venture shares the Indonesia local enterprise PTU, has been operating for more than 40 years, the company is currently one of the largest garment manufacturers in Indonesia, world-renowned. brand Supply men, blouses, skirts, etc. The company has 9 major production bases, 30 factories and 2 water washing plants, with an annual output of 50 million kinds of garments.

The joint venture expects that the annual income of the above projects can reach US $120 million under the condition of full production, and the investment recovery period will be 8.2 years, with a total investment return rate of 11.6%.

Lian FA shares said that the global textile industry and trade pattern is undergoing more obvious changes, and speeding up the global layout of the company is of strategic importance. The garment industry in Indonesia has a strong demand for high-grade woven fabrics, and has great market potential and space. PTU as a local clothing company in Indonesia, the company and its cooperation will help speed up the project and expand the local market.

Global market layout

Enhance the ability to resist risks

The joint venture's investment in Indonesia can not help industry enterprises full of interest in Indonesia, especially in the current complicated and changeable international trade environment. What advantages does "going out" to Indonesia have?

The textile industry in Indonesia has a long history, a perfect industrial chain and a high degree of industrial concentration. According to the statistics of Indonesia National Bureau of statistics, Indonesia has 9 million 400 thousand spindles and 5 million spindles spinning enterprises nationwide, mostly using spinning equipment made in China. There are about 46000 textile and garment enterprises, with an annual output value of about 120 trillion rupiah (about 100 billion yuan), creating an annual industrial added value of 40 trillion rupiah. Indonesia textile enterprises are concentrated in West Java and central Java and around Jakarta, accounting for 88%, and their high quality yarns and garments are competitive in the international market. Among them, sritex Textile Group, located in Thoreau, Central Java province, is the largest integrated textile enterprise in Southeast Asia. Currently, it has 1 million 200 thousand spinning production capacity, an annual output of 100 thousand tons of viscose production line, and an annual output of 16 million garment production lines. It exports about 30 thousand tons of yarn to China every year.

In terms of production cost, the average monthly salary of Indonesia textile enterprises is about $120, the staff stability is higher, the electricity price is equivalent to 0.6 yuan / kWh, and the import of cotton and other textile raw materials has no quota restrictions, and the comprehensive production cost is lower than domestic.

The Kendall Industrial Park, which is invested by the joint venture group, is located in an important port trading city in Indonesia. The industrial park covers an area of 2200 hectares. The head of the Industrial Park said that as of now, 41 enterprises in the industrial park have been settled, with a total investment value of US $475 million. fashion (textile and clothing), food processing, furniture, architecture Material Science And logistics. In addition, beginning in 2019, the government of the central Java province will reestablish a new seaport near the Kendall Industrial Park to replace the old port. It is expected to be completed in 2020. The completion of the seaport will further improve the supporting facilities of the industrial park and increase the freight convenience of the enterprises.

Lian FA shares responsible person said that Indonesia has a strong demand for high-end clothing materials. Local clothing companies have a high degree of recognition for their products, and there is an urgent need for improving fabric quality and shortening delivery time. The construction of the project will make up for the gaps in the local textile industry chain, consolidate the core competitiveness of the company's products, shorten the delivery time, and meet the needs of the company's strategic customers.

Industry experts believe that China's textile and garment industry has gradually lost its cost advantage in exports, and the major textile and garment importing countries such as the United States and Japan have reduced orders in China. In addition, enterprises also take into account factors such as reducing trade frictions and evading tariffs. Finally, the phenomenon that Chinese textile and garment enterprises begin to shift factories to Southeast Asian countries with more advantages in labor cost has become a trend. For the joint venture shares, the project's investment and construction will help to extend the core competitiveness of the company in the field of high-grade woven fabrics, achieve the layout of the global production base, and make full use of the advantages of tariff and labor resources to enhance the global competitiveness of enterprises. Foreign investment should seize opportunities and avoid risks, so as to optimize the global strategic layout and enable the rapid growth of production capacity to drive the continuous improvement of performance.

     

     

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