The industry is accelerating its reshuffle! A large number of PP non woven fabric small factories have closed down, while large factories are crazily expanding production
On one side is a newly built factory building with flames soaring and machines roaring, and on the other side is an abandoned workshop with iron doors locked and overgrown with weeds - this is the most authentic portrayal of the current PP non woven fabric industry.
The small factory is disappearing at an astonishing speed
Data does not lie. In 2025, the total number of enterprises in the PP nonwoven fabric industry decreased by 286 compared to 2021. Among them, the exit rate of small and medium-sized manufacturers with an annual production capacity of less than 10000 tons is as high as 63.4%.
This is not an ordinary survival of the fittest, but an industry "battle royale".
Zhejiang Zijie Non woven Fabric Co., Ltd. was declared bankrupt and liquidated by the court in April 2025 due to poor management and inability to repay due debts. The total amount of guaranteed debt, ordinary debt, and employee debt exceeded 3.19 million yuan. Changshu Shengchuang Non woven Products Co., Ltd. was transferred for bankruptcy review in June 2025. Hunan Sweeney Non woven Fabric Co., Ltd., whose land and buildings were auctioned off in bankruptcy in 2023, was listed as a debtor in June 2025, and a new tax arrears announcement was added in January 2026. Xinlong Holdings, as of the end of 2025, has not recovered losses of up to 379 million yuan, exceeding one-third of the total paid up share capital.
These companies, which once made a fortune during the pandemic dividend period, are now collapsing at a suffocating speed.
Why can't the small factory survive?
To understand this wave of bankruptcies, we need to start from the source.
In 2020, the outbreak of the epidemic caused the price of melt blown non-woven fabric to skyrocket from 20000 yuan per ton to over 400000 yuan, an increase of more than 20 times. Countless companies rushed into this industry like sharks smelling the smell of blood, blindly expanding production and crazily launching production lines. However, this pulsating demand cannot be sustained. With the normalization of the epidemic, the demand for masks has plummeted sharply, but the blindly expanding production capacity cannot be recovered.
The balance of supply and demand is completely unbalanced. The production of PP non-woven fabric has rationally fallen from around 5.2 million tons at the peak of the epidemic to around 3 million tons. The average order cycle in the industry has dropped sharply from about 17 days in 2021 to less than 8 days in 2024, while the inventory days for finished products have surged by over 160%.
The price subsequently plummeted. The price of meltblown fabric has plummeted by over 53%, and industry profits have shrunk by over 95%, dropping from over 10000 yuan per ton to less than 500 yuan. The average spot price of PP non-woven fabric market in 2025 has fallen to around 9200 yuan/ton. The industry's operating rate in 2024 is only * * 32% * *, which means that more than two-thirds of the production capacity is idle.
At the same time, the price of polypropylene on the raw material side continues to decline, with a significant drop from its peak in 2022 to present, and cost support continues to weaken. Upstream price suppression and downstream order cutting have squeezed the profits of small and medium-sized factories caught in the middle to almost zero.
What's even more concerning is that the vast majority of small factories' products are limited to low value-added areas such as shoe covers and round hats. Without technological barriers and brand premiums, once the market shrinks, it can only survive by constantly lowering prices. The industry has completely shifted from a seller's market to a buyer's market.
Why are big companies expanding production instead?
While small factories are closing down in batches, leading enterprises are expanding against the trend.
The industry concentration (CR10) has increased to 58.7% . Top enterprises are accelerating their erosion of market share through mergers and acquisitions, new production capacity, and export compliance capabilities. The industry concentration in 2025 has increased by about 4 percentage points compared to 2020.
Taking Tiandingfeng, a subsidiary of Dongfang Yuhong, as an example, its Sha Special Agent Factory's production lines 1 and 2 have been officially put into operation, further expanding global production capacity reserves and aiming to achieve efficient delivery in the Middle East market with a radius of 300 kilometers and 24-hour mission. As a leading company in differentiated spunlace nonwoven fabrics, Nuobang Group is expected to achieve net profits attributable to its parent company of 130 million yuan, 160 million yuan, and 190 million yuan respectively from 2025 to 2027. Dongguan Liansheng plans to add 3 production lines, aiming to build the largest non-woven fabric base in the eastern part of the Greater Bay Area, with an expected output value of over 200 million yuan by 2026. Domestic enterprises have invested in 23 PP spunbond nonwoven fabric projects in Vietnam, with a total production capacity of 420000 tons per year.
Why do big companies dare to go against the trend and increase prices in the cold winter of the industry?
Firstly, cost advantage. Large factories have economies of scale, lower unit prices for raw material procurement, higher energy efficiency, and thinner allocation of fixed costs per unit product. A small factory costs 10000 yuan per ton, while a large factory may only need 9000 yuan - the difference of 1000 yuan is the distance between life and death in an era where profits are less than 500 yuan.
Secondly, technological barriers. Major factories continue to make breakthroughs in high-speed spinning and melting composite technology (production line speed ≥ 600 meters/minute), and the import substitution rate of high-end products has increased from 28% in 2024 to 37% in 2025. And the small factory is still using old equipment from ten years ago to produce old products from ten years ago.
Thirdly, export dividends. By 2025, the export volume of PP non-woven fabrics in China will reach 1.64 million tons, a year-on-year increase of 6.49%. The demand for disposable medical protection and hygiene products in emerging markets such as Southeast Asia and Africa is growing strongly. The export volume has increased from 320000 tons in 2023 to * * 400100 tons * * in the first 11 months of 2025. Large factories have channels, certifications, and brands to reap the benefits of this export boom; Small factories cannot even obtain FDA and CE certifications, and can only remain trapped in the domestic market with internal competition.
Fourth, product upgrade. Major factories are transitioning from low-end spunbond fabrics to high-end spunbond, SMS composite, and functional non-woven fabrics. The demand for new energy vehicle interiors, high-end wiping cloths, medical protection and other fields is rapidly growing. Large factories have research and development capabilities to seize these high margin tracks, while small factories can only continue to compete in the red ocean.
This reshuffle is far from over
Looking ahead to 2026, the overall market demand for PP non-woven fabrics is expected to continue its upward trend. But the cake of growth is unlikely to be distributed to those players who have already fallen.
With the continuous advancement of technology and the elimination and upgrading of outdated production lines, the production capacity of PP non-woven fabric is gradually returning to normal levels. Those enterprises that fail to complete technological accumulation, market transformation, and global operation will be forever left in the dust of history.
The epidemic has given everyone a lottery ticket, some people became rich overnight with it, while others blindly expanded with it. But when the tide recedes, it's clear who is swimming naked.
The PP non-woven fabric industry is transitioning from the era of "everyone has food to eat" to the oligopoly era of "the strong always remain strong". This is not a bad thing - the only way for any industry to mature is to eliminate the weak and achieve the strong. For consumers, this means higher quality products; For the industry, this means a healthier ecosystem.
But for those small factory owners who are still struggling, this winter is particularly long.
Dongguan Liansheng Non woven Technology Co., Ltd. was established in May 2020. It is a large-scale non-woven fabric production enterprise integrating research and development, production, and sales. It can produce various colors of PP spunbond non-woven fabrics with a width of less than 3.2 meters from 9 grams to 300 grams.