Small wire and cable companies survive

After 20 years of development, China's wire and cable industry has become the world's largest manufacturing scale, largest market, and fastest growing country. Even so, the development potential of the wire and cable industry is still infinite. China’s population accounts for 1/5 of the world's population, but the total value of wire and cable production only accounts for about 15% of the world wire and cable industry. It can be seen that the wire and cable market has great The space for development needs urgent development.

At present, wire and cable products are mainly divided into six categories, including power cables, bare wires, communication cables and optical cables, winding wires, and wire cables for electrical equipment. Their main function is to transmit electric energy and transmit information. It is also an indispensable basic equipment for the manufacture of various electric motors, electric appliances, and meters. It is also a necessary basic product for the realization of electrification and information society.

At present, wire and cable products are widely used in basic industries such as energy, transportation, communications, automobiles, and petrochemicals, and are closely related to the development of the national economy. From a macro perspective, the entire wire and cable industry in China is still in a period of rapid growth, but more and more problems are also highlighted. For example, the wire and cable industry product variety satisfaction rate and domestic market share are over 90%, and the industry-wide production capacity has greatly exceeded the market demand.

In addition, issues such as oversupply, insufficient effective supply, prominent structural contradictions, low input and output, and weak technological innovation have become increasingly severe, which has seriously hampered the development of the wire and cable industry.

As the main production material of wire and cable products, copper materials account for more than 80% of the copper materials consumed by the wire and cable industry, of which power cables account for approximately 20%-30%, and wire and cable for electrical equipment accounts for approximately 28%-30%. Lines account for about 26%-29%, communication cables account for about 5%-7%, and other cables account for about 4%-5%. However, as copper prices have risen in succession in recent years, it has caused great difficulties for wire and cable manufacturers. Coupled with the rise in energy prices, transportation costs, and human resource costs, it is even worse for wire and cable manufacturers.

It is precisely because of the continuous increase in production costs and transportation costs that the sales prices of wire and cable products are difficult to increase. This has led to increasingly fierce competition in the cable market, especially in low-end wire and cable products with relatively low technological added value. In the market, the situation of downsizing prices is everywhere. Until today, no matter whether it is mergers and acquisitions, or because it is difficult to support, the number of manufacturers that have closed down and closed down is even greater. Even for medium and large wire and cable manufacturers, their profits have been pushed down to very low levels. Some companies even appear. Different levels of loss.

It is precisely because of this, there is also a ridiculous phenomenon - the price of materials is higher than the price of the product, but also to wire and cable manufacturing companies miserable. At a wire and cable conference in May, there was even a big buzzword in the industry. In the next five years, wire and cable manufacturers will eliminate half or more. According to the current industry consensus of about 9,000 small, medium, and large-scale manufacturing companies, there may be about 4,500 out of five years. If the misfortune is said, the consequences will be very serious. From this point of view, how to take the road of differentiated competition, if the problem of overcapacity is effectively eliminated, it is an urgent problem to be solved by various manufacturers of wire and cable.

In addition, under the guidance of relevant government departments and led by large domestic leading companies, how to reasonably solve the current low barriers to entry, low industry concentration, and product quality, etc., are also the main reasons for small-scale production companies to get rid of disasters. Research topics. It can be said that although the wire and cable market share is unlimited, for the small wire and cable manufacturers, it is particularly urgent to invest "limited life" in the infinite market, and actively seek for solutions. "Down, then "strong" up.