Industry statistics show that in the next few years, the development speed of China's wire and cable industry will be higher than the development speed of the national economy, which is expected to reach more than 10%. In particular, power wires and cables can grow at an average annual rate of 15%. According to the comprehensive judgment of all aspects, that is, the sales revenue of the main transmission and distribution equipment sub-sectors in the next two years, it is predicted that the sales revenue of wire and cable in the next few years will be 353 billion yuan in 2008 and 298 billion yuan in 2009. 413.6 billion yuan. This is undoubtedly a huge opportunity for cable companies. However, in the face of fierce competition from cable manufacturers at home and abroad, for the promising 2008, Zhang Xinhua, deputy general manager of Jiangsu Wufang Cable Co., Ltd., expressed cautious optimism in the wire and wire industry. attitude.
Optimistic: the wire and cable industry continues to develop rapidly
In recent years, the construction of power grids has been accelerated, and UHV projects have been put into construction one after another, creating a huge market for the wire and cable industry. According to statistics, the industry has grown at an average annual rate of more than 15% in the past 15 years. It has become the second largest industry in China after the automotive industry.
China's position as a global peer is very important. The total output value of wire and cable has surpassed that of the United States, becoming the world's largest wire and cable producer. From the perspective of the world, Europe, Japan and the United States have already carried out strategic mergers and acquisitions. The product series was reorganized and the target market was repositioned to form a large-scale or specialized production. It is characterized by high industrial concentration, and the total sales revenue of the top ten enterprises account for more than two-thirds of the market in the country or region. A clear trend is that the world's wire and cable production focus continues to shift to Asia, driving the rapid development of industries in China, Vietnam, the Philippines and the Middle East.
From a holistic perspective, the industry has formed huge production capacity through a large number of technology introduction, digestion and absorption, and independent research and development. The cable materials and cable equipment manufacturing industries that have been matched with it have also formed a relatively complete supporting system. Large enterprises have obvious advantages in market competitiveness and have strong profitability. Small and medium-sized enterprises have better operational capabilities.
At present, the market-oriented operation mechanism of the industry has been significantly enhanced, and the private economy has developed rapidly, which has become the basic force for economic growth in the industry. In particular, the wire and cable manufacturing industry in coastal economically developed areas has obvious advantages, and regional differences have further expanded. In terms of assets, the state-owned economy only accounts for 15%, the three-funded enterprises account for nearly 25%, and the private economy has more than 60%. Most of the top ten companies in the wire and cable industry are privately owned. East China has become the most important manufacturing area for the wire and cable industry, accounting for 60% of the country's assets and output value of 60% of sales, and won 70% of the industry's profit.
Be cautious: the major problems highlighted by the industry have not been solved fundamentally.
In the rapid development, several major problems in the industry have become the embarrassment of progress.
First, with the changes in the external environment and the impact of market competition, the world wire and cable industry has formed a monopoly of several giants; second, the copper price of major raw materials has risen sharply, resulting in tighter wire and cable companies, and slow capital turnover. In particular, foreign special cable products have entered the Chinese market, which has further exacerbated the fierce competition. Some enterprises have already faced a crisis of survival.
It is understood that at present, there are more than 7,000 small and medium-sized wire and cable enterprises in China. Due to the lack of research and development capabilities, most of these companies have made a fuss about low-end products on low-end products, and high-end products are in short supply. At present, there are about tens of thousands of enterprises in the cable industry. Most of them are small in scale, with repeated investment in the industry and overcapacity. For example, when urban and rural power grids are being rebuilt, many enterprises have embraced the production of overhead conductors and cross-linked power cables. When attaching importance to the development of high-tech, many enterprises have invested in the production of high-voltage cables and fiber-optic cables. In recent years, many enterprises have invested in the production of automotive wires. In particular, foreign capital has entered the domestic high-voltage cable, optical cable and special cable market, making the competition more intense. The weak influence of industry brands has caused disorderly competition in the wire and cable industry. There are only over 50 companies that can truly win the bid for major national projects.
Product prices have become a magic weapon for many SMEs. Since wire and cable is a typical industry with heavy weight and light weight, the price of raw materials accounts for 70% to 80% of the total cost. Therefore, the quality of raw materials greatly affects the quality of wire and cable products. With the rising prices of copper and aluminum materials, coupled with rising energy and transportation costs, the cost of enterprises has further increased, and the gross profit margin of the industry has declined. This has led some companies to cut corners, or to produce so-called "enterprise standard" products for different customers, so that strict control of production according to mandatory national standards will be produced according to the so-called "tailor-made" safety assurance enterprise standards. The reason why small businesses can provide ultra-low-priced products is nothing more than making a fuss about raw materials, and the quality of the products can be imagined. Quality risks increase and unfair competition intensifies.
Market standardization is not enough, and local protection is still serious. As one of the main basic industries in China, wire and cable have not reached a certain height in terms of market regulation or the degree of government attention. From a national perspective, the current unified market has basically taken shape, but the invisible threshold between localities has not been broken, and local protectionism is still serious. Some local governments insist on using local products. Some regulatory agencies only look at foreign companies and do not check local companies. These acts are called legal inspections, which are closed protection, which leads to products that cannot be circulated according to market rules and hinder the unified and standardized development of the market.
The price discourse power is weak and the market order is chaotic. Most of the cable industry customers are large national projects or state monopoly industries, such as electricity, communications, and railways. Cable companies are unable to engage in a fair dialogue with the strong buyer market. Some companies not only fail to receive advance payments, but also pay premiums to customers. At present, the bidding mechanism is very confusing, and most of them adopt the “lowest price†standard, which results in the product quality not being guaranteed.
Basic research and applied research are not focused enough and lack core competitiveness. Although "takenism" has made wire and cable companies have a better set of equipment, it has not really formed core competitiveness. The enterprise-oriented technological innovation consciousness and system construction lag behind the pace of economic development, which makes the wire and cable sector lack independent intellectual property rights. The key technologies are often subject to people, which seriously restricts the development of high-end technology and high-end products. According to statistics, at present, only 30% of cable products in China reach the level acceptable and competitive in the international market.
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