Cole 200 Million Dollars To Test The Water, Is The United States Worthwhile?

At the end of 2013, there is a news of great concern in the industry. Cole, a leading cotton textile leading enterprise, will open its first overseas factory in the United States in Zhejiang. This factory is called "Cole American company" with a total investment of US $218 million. When people speculate that such a large scale of investment will surely enable enterprises to get good returns quickly, Huang Guogang gave the unexpected answer: "Cole group has made great progress in recent years, but since 2008, the growth of the textile industry of the company has not been so remarkable. Because what we do is cotton spinning products, the main raw material is cotton, and in recent years, domestic and foreign cotton The price difference is bigger and the pressure on enterprises is also increasing. This is why we went to the United States to build factories. However, the construction of factories in the United States will cost a lot of money, and it is not expected that the production will be profitable. Maybe 5 years ago, we should go out.

Cole American company is jointly organized by Cole Group Co., Ltd. and Zhejiang hang min Industrial Group Co., Ltd., taking Zhejiang hang min Cole Textile Co., Ltd. as the investment entity. The company locate in Lancaster County, South Carolina. The total land area of the factory is about 54.7 hectares, with a total construction area of 150 thousand square meters, with a construction area of 40 thousand square meters, mainly including two production workshops and supporting facilities. According to Huang Guogang, the US company will break ground in February of this year and formally put into operation in October.

　　 Cost advantage tempting

Vietnam, Pakistan, India and other Southeast Asian countries all used to be Cole group They also did research and Research on the layout of overseas countries. The cost of labor and hydropower in these countries is relatively low, but in view of the instability of their political situation, Cole group chose the United States which is relatively stable in political, economic and social development. In addition, Huang Guogang said that the most important factor for enterprises to consider is to deal with the high cost of labor, energy and raw materials in the domestic cotton yarn industry, avoid international barriers to China's textile industry, and promote the implementation of the internationalization strategy of enterprises.

According to the latest data released by China Cotton Textile Industry Association, in 2013, domestic cotton prices continued to be significantly higher than international cotton prices. The average price difference in the three quarter was 5132 yuan / ton, which was 260 yuan more than the two quarter.

Huang Guogang said: "at present, the labor cost of domestic labor is about 40 thousand yuan per person per year, and the labor cost of the US labor force is about 200 thousand yuan per person per year, and the Cole group produces about 500 labor force locally. The cotton price at home and abroad is about 5000 yuan / ton. After the first phase of the Cole company project, the annual cotton consumption is about 70 thousand tons. The two phase project uses about 80 thousand tons of cotton and the total cotton consumption is about 150 thousand tons. According to the above cost, Cole's annual cost of labor in the United States will be 80 million yuan more than that in the domestic market, while the cost of cotton can save about 750 million yuan. Ignoring the factors of labor force and cotton price changes, Cole can save about 650 million yuan a year for two expenses.

In addition, Cole group has been using the global procurement mode. Cole America will introduce advanced textile machinery equipment such as Germany and Switzerland. The first phase of the project will be equipped with 52 air spinning production equipment. After the commissioning, the annual production scale of the yarn will be 70 thousand tons. The whole project will form 100 first-class first-class air spinning, with an annual output of 150 thousand tons of yarn. The huge production capacity needs abundant energy support. According to Huang Guogang, the current domestic electricity cost is about 0.7 yuan per kilowatt hour. The electricity cost of the United States is about 0.4 yuan per kilowatt hour. Cotton spinning production is a large power consumer. Therefore, the cost of electricity is also a key issue for enterprises to consider. The relative preferential energy price of the United States has become another factor to attract Cole group to invest and build factories in the region.

　　 Close to the origin of raw materials

The United States is the world's leading producer. Cotton country It is also one of the largest exporters of cotton. The state of South Carolina has strong industrial, technological strength and efficient labor resources. Cole group's investment in the locality can avoid quota quotas and transportation costs of imported cotton, and make full use of the raw materials in the United States for production. On the other hand, it also creates employment opportunities for the local and achieves mutual benefit and win-win results.

It has been reported that some clothing brands and retailers in the United States are considering turning some manufacturing industries back to the United States. It is estimated that 200 thousand garment manufacturing opportunities can be created in the next 10 years, and American consumers are becoming more and more interested in "made in the United States" products. Under such circumstances, Cole's visit to the United States was welcomed by the local government. "The United States is now implementing the" re industrial "reform, and after the project is completed, the local government has also helped us improve our follow-up work. Huang Guogang said.

After the completion of the project, Cole can create about 500 jobs for the local people. Therefore, the negotiation and implementation of the project between Cole and the US local government is very successful. In addition, the South Carolina government also helped Cole group and local hydropower, electricity and other departments to make a project approval work. "After the company formally put into operation, according to the local market conditions, some of the terminal products are directly sold in the United States, and the other part is shipped back to China to meet the domestic market demand. Of course, the market price of the United States is higher, and we hope that the products produced by the United States can all be sold locally."

　　 Benefit based on long term

For example, in 2005, Shenzhou International Group's Kampuchea project was formally put into operation. In 2007, 4 Jiangsu enterprises, such as the red bean group, joined a Kampuchea enterprise in Kampuchea to build the special economic zone of Sihanouk. In 2008, the Jiangsu Bauhinia textile Polytron Technologies Inc began to trial the quality of jute varieties in Benin, Nigeria, Mali and other countries. These enterprises have chosen the developing countries with lower cost, but Cole group chose to invest in developed countries, which means that enterprises must invest higher costs first and undertake corresponding investment risks.

Huang Guogang said that Cole Group Co., Ltd. is the first direct foreign investment cotton textile enterprise in Zhejiang province. It is uncertain whether to make profits or even recover the cost of investment. Huang Guogang said frankly: "in the United States, the huge amount of investment built in factories, plus the cost of building, purchasing equipment and using energy and so on, it is not likely that profits will be made that year, or maybe 5 years later, enterprises will really make profits in the US. There are many uncertainties in the future cost of production, which is why Cole's investment is attracting high attention from the industry.

In order to promote the development of American companies, Cole group will also assign a dozen managers to the top management of US companies from the company headquarters, and will train local workers in vocational skills so as to facilitate the smooth progress of the project.