On the one hand, there are overwhelming market orders, but on the other hand, costs are rising due to rising commodity prices. To find more room for development in such a market environment, it is the true skill of enterprise transformation and upgrading that is tested.

In Qingdao, textile machinery is one of the traditional advantageous industries and has "hidden champions" in many subdivisions. Jiaonan Wangtai Town is the only characteristic industrial cluster town in China that has been awarded the title of "China Textile Machinery Town" by the China Textile Industry Association. It has more than 1,600 textile machinery manufacturers and is the country's largest shuttleless loom and water jet Loom production base.

Facing the general trend of the industry where opportunities and challenges coexist, Qingdao textile machinery enterprises have obviously accelerated the pace of transformation and upgrading, and continue to increase their strength in product innovation and digital transformation to accelerate their own strength.

Orders are bursting: "Happiness and troubles"

Either they are busy receiving customers from all over the world, or they are busy visiting customers. Since 2021, the bosses of Qingdao textile machinery enterprises have been very busy. At Qingdao Haijia Machinery in Wangtai Town, the one-hour interview was finally squeezed out, and it had to be interrupted three times in the middle to deal with some matters concerning visitors and orders.

"The revenue in the first half of the year has exceeded that of last year, and it is expected that this year's revenue will double from 2019." Haijia Machinery General Manager Liu Jingran told reporters. The main product of Haijia Machinery is the water jet loom, and its market share has been ranked first in the world for many years. Since the epidemic situation stabilized in the second half of last year, the continuous increase in domestic market demand has brought new opportunities to the company. One of the major customers placed an order of 20,000 units at once, which is equivalent to Haijia's two-year production capacity.

Similar stories are also being staged in other textile machinery companies in Qingdao. Qingdao Hongda Textile Machinery, which focuses on spinning machinery such as blow-carding and automatic winders, has placed orders for June next year, and its revenue in the first half of the year increased by 40% over the same period last year. The company’s general manager Wang Lixia told reporters that domestic orders have contributed a lot. A new customer order from the Shenzhen investment industry accounts for 1/10 of the company’s annual equipment output.

Why is the market so hot all of a sudden? Was it caused by the return of textile and apparel orders under the impact of the epidemic? The reporter learned in the interview that the “uncertainty” factor of the epidemic only accounts for a small proportion, and this round of huge market demand is more of the general trend of the transformation and upgrading of the domestic textile and apparel industry.

At present, China is still one of the most important exporters of textiles and garments in the world. Taking cotton spinning as an example, China's production capacity still accounts for about 50% of the global scale. In the past two years, a large number of domestic textile machinery has reached the update period, giving birth to a huge market space. At the same time, the transfer of domestic textile and apparel production capacity to overseas markets such as Southeast Asia is slowing down. "On the one hand, the impact of the epidemic on production in Southeast Asia and other places, on the other hand, is the most critical reason. The relatively high-end domestic production capacity is still difficult to be replaced for a long period of time. Some cloths are woven in Southeast Asia. The cost is higher than buying in China, and the advantages of domestic companies in cost, quality control and other aspects are still being enlarged. As a result, the gap has not been narrowed, but may be widening." Liu Jingran said. The major customer who has brought Haijia 20,000 orders is a crossover from the upstream of the chemical fiber industry, expanding from the original production of chemical fiber raw materials to the entire industrial chain layout from raw materials to weaving. Obviously, under this layout, the competitiveness of end products will no longer depend on the level of labor costs.

Although the market demand is strong and orders are full, companies are also facing considerable challenges if they want to "increasing revenue" while "increasing profits". The continuous increase in commodity prices under the influence of the epidemic has given companies quite a headache, but competition from domestic and foreign counterparts has also prevented textile machinery companies from easily passing costs on to users. "Textile machinery requires steel and iron, copper, aluminum, etc. The cost of these raw materials has increased by 15% over the past, but we only let customers bear half of it, and the other half is absorbed by ourselves." said Wang Bing, general manager of Qingdao Shengdelong Machinery.

Refining "high-end" and advancing into "no man's land"

A more complex market environment puts forward higher requirements for the competitiveness of textile machinery enterprises. While rushing for orders, Qingdao enterprises are working hard on product development and innovation, speeding up the pace of high-end products, and seizing the market opportunity of this round of textile equipment upgrades with more high-quality and leading products.

Qingdao Hongda Textile Machinery, with a history of 100 years, has always been an innovation leader in the field of spinning machinery. Since the 1980s, through the introduction, digestion, and reabsorption of independent research and development of automatic winders, breaking the monopoly of foreign enterprises. This year, Hongda Textile Machinery has increased its R&D investment compared with last year. The R&D investment intensity has increased from 4% to 5%, which is equivalent to an increase of 7 million to 8 million yuan in investment. "In addition to the parts precision and product structure, we have been continuously improving and upgrading. The intelligentization of products and the ability to meet customer personalized production are two key directions." Wang Lixia introduced.

If it is said that in terms of parts and product structure, companies can also learn from the products of foreign counterparts, then the latter two power points are "no man's land" with almost no existing experience to learn from. After decades of development, China's textile machinery has basically achieved the goal of going from following to parallel. In the domestic market, the market share of domestic textile machinery has now reached 80%. Therefore, while the textile and apparel industry has entered an era of intelligence, green, and individualization, my country's textile machinery enterprises have also entered the stage of independent exploration.

For example, in terms of intelligence, Qingdao Hongda Textile Machinery has equipped its automatic winding machine with a spun yarn quality tracking system, a single-spindle intelligent tube supply system, and a single-spindle intelligent alarm system to improve production efficiency and yarn quality. Facing textile enterprises' demand for multiple varieties and reducing equipment investment, the standard blowing-carding equipment is upgraded, so that the mixing of multiple fibers can be completed before the blowing-carding link.

Coincidentally. Qingdao Shengdelong Machinery is conducting a similar exploration on the weaving equipment-adding self-compensating weft function on the air-jet loom. Wang Bing introduced that when a traditional loom is working, if there is a "broken weft" that requires manual operation to "fill weft", self-filling means replacing labor with automated and intelligent means. "The domestic and foreign counterparts have not yet launched mature products of this kind, and we are currently trialling some products," he said.

Speed up "touching the net" and subvert the traditional management and service paradigm

Accelerating the embrace of the industrial Internet, using new generation information technologies such as artificial intelligence and big data, and exploring more new models and new business formats has also become an important direction that Qingdao textile machinery companies are targeting.

In Haijia Machinery, a brand-new smart factory is rapidly under construction. Although the company's water jet looms have taken the lead in market share, the company is also aware that there is still a certain gap between its products and its Japanese counterparts in terms of overall stability.

"In the future, we will take the lead in the subdivision of water jet looms in all directions." Liu Jingran said. According to Haijia Textile Machinery's plan, while developing the domestic market, we must also accelerate the expansion of overseas emerging markets. Realize that overseas sales exceed 50% of the company's total revenue. This means that only product R&D innovation is not enough, and the lean management of the manufacturing process is also crucial. "It is necessary to use the means of intelligent manufacturing to reach the first-class level in the production process." Liu Jingran said.

In fact, more and more small and medium-sized textile machinery enterprises in Qingdao have realized that the competitiveness of enterprises not only depends on factors such as the level of product technology and the level of supply chain costs, but also the strength of corporate management capabilities. Changes in the competitive environment will have an ever-increasing impact. Relying on the management transformation of informatization and digital means has already had to be done.

In terms of business model innovation relying on the Industrial Internet, Qingdao pioneering companies have begun to taste the "sweetness". As the first batch of enterprises in the textile machinery industry to explore the transformation from "selling products" to "selling services", Qingdao Hongda Textile Machinery established a remote equipment operation and maintenance platform several years ago. Since 2020, the epidemic has restricted the flow of people, and platforms have been increasingly recognized by customers. As of the first half of this year, the number of customers purchasing remote operation and maintenance platform services has been twice as many as for the entire year of last year.