In the context of the acceleration of the "Belt and Road" initiative, textile and garment enterprises have deployed the markets of countries and regions along the route through the establishment of factories, investment, and acquisitions, seeking effective integration of the industrial chain on a global scale. Some textile and garment enterprises have thus achieved performance growth.

Achieve Performance Growth

Factors such as the increased brand awareness of consumer groups and the rising cost of domestic production capacity have prompted relevant companies to "go out" to find opportunities through overseas mergers and acquisitions and overseas factories.

Taking Jiangsu Sunshine as an example, the company plans to establish a textile and garment production base in the industrial park of Adama City, Ethiopia. The total investment of the project is 0.35 billion US dollars and the construction period is expected to be 1 year. It is estimated that the project can achieve annual operating income of $0.241 billion and total annual profit of $47.136 million. After the implementation of the project, the annual output of 10 million meters of worsted fabrics, 1.5 million sets of suits.

The company said that the establishment of a production base in Ethiopia will help reduce labor costs, reduce international logistics costs, etc., help the company continue to expand the international market, further improve and enhance the company's industrial development layout, and further enhance its competitiveness.

Another example is Ruyi Group, which benefited from the capacity expansion of the company's "One Belt, One Road" transformation and upgrading intelligent manufacturing project and driven by international mergers and acquisitions. Ruyi Group's overall operation is in good condition and steadily increasing. In 2016, the group achieved operating income of 29.1 billion billion yuan, a year-on-year increase of 27.74%; net profit was 2.5 billion billion yuan, a year-on-year increase of 255.74%.

According to reports, Ruyi Group has deployed 10 industrial parks in countries and regions along the "Belt and Road", with a total investment of more than 30 billion yuan. Wang Qiang, CEO of Ruyi Group, said that since the "Belt and Road" initiative was put forward, Ruyi Group has accelerated its deployment in countries and regions along the route. The group has built industrial parks in Ningxia, Xinjiang and other places. In 2016, in order to solve the problem of energy shortage in Pakistan, the Group and Huaneng Group jointly invested in the construction of Pakistan's Sahiwal coal-fired thermal power project. At present, the project has become one of the "priority implementation" energy projects in the China-Pakistan Economic Corridor.

Listed companies such as Vignas and Goliath expand overseas markets by acquiring international brands.

In November 2016, Vignas announced that it plans to issue no more than 159.4 million shares in a non-public offering at a price of no less than 27.61 yuan per share, and raise no more than 4.4 billion yuan. Among them, 4 billion yuan was used to acquire 90% of Teenie Weenie. Teenie Weenie is a famous high-end clothing brand in South Korea and currently has 1425 shops. Among them, direct stores accounted for 91.65 percent. Guangfa Securities said that Vignas's acquisition of Teenie Weenie will enrich the company's brand matrix, create synergies in design, production and sales, and will significantly increase the company's profits after the table. In the first quarter of 2017, Vignas achieved operating income of 0.311 billion billion yuan, an increase of 63.90 percent over the same period last year, and the net profit attributable to shareholders of listed companies was 28.6508 million billion yuan, an increase of 31.79 percent over the same period last year.

Since 2015, Golis has acquired a number of European and American luxury brands. Benefiting from the increase in sales revenue of the acquired German brand LAUREL and the American light luxury brand Ed Hardy, the company achieved operating income of 0.339 billion billion yuan in the first quarter of 2017, an increase of 88.37 percent over the same period last year, and the net profit attributable to shareholders of listed companies was 60.3118 million billion yuan, an increase of 153.15 percent over the same period last year.

Adapt to market changes

According to data released by the General Administration of Customs, from January to March 2017, textile and garment exports showed a steady upward trend. Among them, the export of textile products was 160.378 billion yuan, up 7.5 percent from the same period last year; the export of clothing products was 218.201 billion yuan, up 6.2 percent from the same period last year; and the export of footwear products was 67.142 billion yuan, up 12.8 percent from the same period last year. Industry insiders said that the downturn in foreign trade in the textile and garment industry has been reversed to a certain extent.

As of the first quarter of 2017, a total of 54 textile enterprises above designated size have invested in related projects in various ways in Southeast Asia, Africa, Oceania and Europe. Many enterprises have incorporated the investment and construction along "the belt and road initiative" into the layout of the global industrial chain.

Tong Jisheng, chairman of Shanghai Textile Group, said that the group summarized the global strategic layout as "African raw materials, European and American design, Asian processing, China integration, and global sales", and expanded global industrial production capacity by building overseas raw materials, manufacturing, sales, and distribution bases., Industrial chain layout.

In 2016, the total profit of the four US subsidiaries of Shenneng shares was 71.8476 million yuan, accounting for 66.05 of the total profit of foreign trade business. Shenneng shares are listed companies under Shanghai Textile Group.

Compared with the active layout of the global industrial chain by textile enterprises, the shoe and clothing industry has a longer layout of the "Belt and Road" countries and regions.

Take the sneaker industry as an example. In 2009, Li Ning Co deployed the US and Southeast Asian markets and tested overseas markets, but the results were not satisfactory. And Anta, 361 degrees and other enterprises through the acquisition of foreign brands layout of overseas markets. In 2009, Anta took over the operation of the FI LA brand in China from Beli International. In 2013, 361 degrees reached an agreement with Finnish sporting goods company OneWay to establish a joint venture company to jointly expand the outdoor market.

Analysts in the shoe and clothing industry said that in recent years, there have been some changes in the industry as a whole, such as the rise of e-commerce, the dominant concept of fast fashion consumption, the longer cultivation cycle of shoe and clothing brands, and the twists and turns of overseas investment. When shoe and clothing enterprises lay out the markets of "Belt and Road Initiative" countries and regions, they should pay attention to the changes of consumption habits, income level, consumption concept and other factors of the target group. Countries and regions along the route have advantages such as relatively low labor, low tariff costs, and strong consumer population cultivation, but they must also pay attention to differences in legal systems and cultural customs. In terms of overseas mergers and acquisitions, attention should be paid to improving the management level, strengthening brand cultivation, and improving the synergy between acquired assets and enterprises.