Jingwei machinery orders tumble as credit tightening hits industry

Jingwei Textile Machinery, a leading mainland producer of textile machines, has reported a sharp drop in future orders as the country's austerity measures bite hard into the textile industry.

For the next six months, the company saw a fall in orders to 1.5 billion yuan from more than two billion yuan last year, general manager Ye Maoxin said. He predicted sales would be flat or decline in the second half.

In line with Jingwei's weak performance, the mainland's import of textile machines slowed to 3.5 per cent in the first half from 35 per cent a year ago, official statistics showed.

'Our customers wished to expand capacity but were curbed by tighter credit,' chairman Zhang Jie said.

Mr Ye said: 'The textile industry was among those to which loan restrictions applied under the government's macroeconomic measures. Meanwhile, prices of raw materials [such as cotton] remained volatile, creating additional risks for textile firms. The electricity shortage in the mainland also affected our customers.'

Jingwei, which accounts for more than 50 per cent of the mainland's natural fibre machinery market, posted a 7.4 per cent decline in first-half net profit to 78.37 million yuan. Turnover fell 6.56 per cent to 1.95 billion yuan.