VAT is to cut down from 16% to 13% since Apr 1 2019. Its direct impact on polyester profit results from the reduced rate and players’ buy and sell spread.
Distribution of the profit squeezed from VAT cut depends on each sector’s bargaining power. For example, if polyester plants hold stronger bargaining power against downstream, they may keep selling price stable or raise offer before the VAT is cut, which can be seen from recent price fluctuation in polyester products. PFY and PET bottle chip producers maintained the price firm as usual. Meanwhile, if polyester plants have stronger bargaining power than upstream, polyester plants are likely to push feedstock to decline. If bargaining power is so-so, polyester plants may arrange feedstock purchase as early as possible, and draw up invoice for deduction. Downstream producers will also demand pre-tax settlement, to cater to future development. But this will involve producers’ feedstock purchase invoice, if downstream and upstream can reach consensus, then uniform tax rate is negotiable, and vice versa.
Assume PET bottle chip selling price at 8400yuan/mt after tax, and with no fluctuation within short, based on 16% VAT, the tax=after tax sales revenue/(1+16%)*16%=8400/1.16%16%=1158.6yuan/mt, while after Apr 1, the tax=8400/1.13*13%=966.4yuan/mt. The spread is 192.2yuan/mt, but this is not the ultimate VAT PET bottle chip plant needs to pay, the figure needs to deduct VAT generated during feedstock and auxiliary materials purchase. In this way, actual impact on market price and enterprises’ profit is limited, while cash flow may be the one to bear the brunt of VAT cut.
Hence, for highly competitive industries, VAT cut may bring limited positive impact, or in other words, impact on the industry depends on which sector holds more power. One thing for sure is that delivery of polyester plants is quite likely to expand in drastic.#??#
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Zimmer Austria has delivered its 500th magnoroll coating machine. It is a world-leading manufacturer for screen & digital printing machinery, coating, steaming, drying, digital functionalisation, as well as sample, lab, and washing machines. The machine manufacturer is the benchmark for dependable high-class machines in the textile printing industry.
Precision, quality, and reliability - many aspects changed since the invention of the first Magnoroll, but this coating machine made its name as industry benchmark due to its constant characteristics of highest quality and outstanding precision for reliable first-class results. This success is based on the effort of our dedicated workforce who managed to continuously improve and innovate, the company said in a press release.
Nowadays, the Magnoroll coating machine is equipped with state-of-the-art operating software that is loved by the customers. The machine comes in a unique modular design execution that combines various coating techniques (knife, screen, slot or magnet roll coating) within just one machine. This minimises machine downtimes and ensures quick adaptation to specific requirements.
Concentricity, accuracy, and precision is crucial for quality results, especially when applying coatings on large working widths. The world-famous Zimmer Magnet System Plus with up to three magnet bars, guarantees a 100 per cent uniform application for any coating, laminating, and lacquering.
Zimmer Austria coating systems ensure the needed accuracy and precision for applying coatings also on working widths larger than five metres. Zimmer Austria provides the opportunity to run trials or even small-scale productions at its technology application centre in Klagenfurt. Depending on the individual requirements, the company offers a variety of standard and special coating techniques to be tested together with its expert technologists, such as knife coating combined with screen printing.#??#
Outstanding coating results require attention to every detail and the highest quality in every step of the process. Zimmer Austria has decades of experience in the manufacturing of coating systems, where it achieved many breakthrough innovations that its customers benefit from. The company offers tailor-made coating systems, manufactured with highest quality materials (stainless steel, chromed steel, and so on), equipped with state-of-the-art operating software to bring the customers the highest level of quality.
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