After 30 years of rapid development, China has become the market with the largest manufacturing scale, highest consumption scale, and fastest growth rate in the global wire and cable industry. Behind the release of tremendous energy and creativity, the wire and cable industry faces enormous pressure, and unfavorable factors such as excess production capacity and disorderly market competition are constantly troubling us Wei Dong, the director of Shanghai Cable Research Institute, summarized the current Chinese wire and cable industry with this sentence.
This is also the consensus of the entire wire and cable industry. In today's increasingly severe financial crisis, although the wire and cable industry, as a necessary basic product in various fields of national economic construction and people's daily life, seems to be unable to avoid the impact of the macroeconomic environment and remain independent. Whether the wire and cable industry can abandon the long-standing "low price competition" strategy, achieve product upgrades, and return to rational competition has become an unavoidable issue for the entire industry.
The last straw that crushed the camel
According to the statistics conducted by the National Bureau of Statistics in 2007 on 3645 state-owned and above scale wire and cable, fiber optic cable production enterprises, the entire industry achieved a total industrial output value (current price) of 566.7 billion yuan in 2007, a year-on-year increase of 33%. Among them, the output value of new products was 53 billion yuan, a year-on-year increase of 46.5%; Completed industrial added value of 134.2 billion yuan, a year-on-year increase of 29.7%; The completed sales output value was 555.7 billion yuan, a year-on-year increase of 32.9%, of which the export delivery value was 54.3 billion yuan, a year-on-year increase of 24%; Realized a total profit and tax of 38.69 billion yuan, a year-on-year increase of 36.6%; The industry suffered losses of 12.7%, with a loss amount of 1.19 billion yuan, a year-on-year increase of 7.6%.
It can be seen that while China has become the world's largest cable producing country, it is not a strong country in terms of wires and cables. Some prominent industry drawbacks and characteristics have seriously constrained the healthy development of the cable industry.
Firstly, the product quality is of concern. In 2004, according to the results of the national wire and cable product quality supervision spot check released by the State Administration for Industry and Commerce, out of the 150 batches of products sampled, 91 batches were qualified, with a qualification rate of 60.7%. In 2008, the State Administration for Industry and Commerce announced the random inspection results of the 2007 special key rectification work on the quality of wires and cables, indicating a significant decrease in the product qualification rate.
The second is the low level of competitive product structure. Overall, there is a significant gap in the technical quality, production capacity, and production concentration between domestic cable manufacturing enterprises and advanced foreign enterprises. According to statistics from relevant departments, thousands of local cable companies in China mainly focus on the low-end cable market with profits of less than 20% to 30%, while the lucrative 500kV and ultra-high voltage cable accessories mostly rely on imports.
The third is the cruel and disorderly competition at low prices. Winning the bid at the lowest price has become the main theme for most users today. In order to compete in the market, cable production enterprises are competing with each other to win the bid, and it is not uncommon for them to quote without any return. Price competition tends to be intense and disorderly. Some enterprises ignore quality and safety, using low quality to lower sales prices, disrupting market competition order, and further exacerbating disorderly competition within the industry.
Nowadays, the brilliance of the rapid development of the industry is no longer enough to conceal the concern of increasingly low product quality, and the lack of professionalism and professional ethics of manufacturers will lead to the 'quality gate' becoming the 'last straw to crush the camel' in the increasingly standardized market competition. "Experts from the China Wire and Cable Branch said.
Only by actively adjusting can we win
In the current economic situation, entrepreneurs must guide enterprises to engage in rational competition with correct concepts in order to overcome difficulties.
At the same time, close attention should be paid to the macroeconomic trends and investment trends, timely adjustments should be made to the business strategy and product development direction of enterprises, and strong support should be given to product research and development in the field of industrial policy support. In addition, market research and analysis of the economic situation should be strengthened, and a more cautious attitude should be taken towards investment in expanding production scale. Attention should also be paid to technological transformation and investment in energy conservation and consumption reduction. Only by strengthening internal management, strengthening risk awareness, and enriching enterprise free funds can the safety of enterprise operation be ensured.
From the past experience of the optical fiber and cable industry, it can be seen that in the context of a tightening market environment, enterprises can turn pressure into driving force, have a strong enthusiasm for accelerating technological upgrading and promoting product optimization, and the willingness to restructure the industry and assets can be enhanced and actual progress can be achieved. Therefore, in the context of slowing economic growth, our industry should make reasonable use of the market force mechanism generated during this special period, actively and actively Promoting the process of industrial upgrading; Adjust and improve product structure, actively develop wire and cable products that meet the development direction of industrial policies; Further strengthen the internal management of enterprises and improve the efficiency of enterprise operations; Encourage advantageous enterprises to implement mergers and acquisitions to enhance their competitiveness
However, according to research data from the UK Commodity Research Institute (CRU), Chinese wire and cable companies should also see the call of opportunities in the face of the aforementioned challenges.
According to CRU estimates, with the continuous growth of global population, electricity consumption will double in the next 30 years. The increase in distributed new energy power plants, the high demand for underground cables, the growing demand for electricity in developing countries, and the replacement of old power facilities in developed countries will lead to an increasing demand for wires and cables globally.
However, the development of the wire and cable industry must also adapt to the new situation and development needs. The market development prospects of products such as wind power cables, submarine cables, bendable lossless optical fibers, and high-voltage DC cables are quite optimistic. But this requires companies to improve the performance of their products through innovation to adapt to more demanding usage conditions.
For wire and cable enterprises, when innovating their products, they need to grasp several key points: firstly, in response to the government's requirements for energy conservation and emission reduction, they should attach importance to the updating and upgrading of equipment to meet environmental emission standards, reduce energy consumption, improve product quality and production efficiency. Secondly, in terms of infrastructure construction, they should adopt a cautious attitude towards the continuous expansion of production scale and strengthen the management of production and operation Manage to further reduce manufacturing and operating costs; Thirdly, in the process of production and use, eliminate toxic fumes, etc; Fourthly, more venture capital models should be adopted to reduce the technology development cycle; The fifth is to make collective investments in new technologies to create enormous value for end-users