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China Wire & Cable Industry Development Status and Problems in 2011

2018-06-07
Wire and cable industry is an important basic industry of the national economy. The quality of its products is directly related to economic and social development and the vital interests of the people. With the rapid growth of China's economy and the further acceleration of the process of industrialization and urbanization, China's wire and cable industry is developing rapidly. It is the second largest industry in the electrical and electronic industry after the automobile manufacturing industry. The annual output value of the industry has exceeded 900 billion yuan. . China's wire and cable industry has a decisive influence on the world wire and cable manufacturing industry.

I. Development Status At present, the development level of China's wire and cable industry has a big gap compared with the important position of the wire and cable industry. The overall level of China's wire and cable product quality is still not high, and the qualified rate of product quality supervision and inspection has been low for a long time. The quality of SMEs has fluctuate greatly. Some companies fail to realize their responsibility for product quality, and they have lost the quality of their work, materials, and sales. Contrary to illegal phenomena, quality problems pose major hidden dangers to safety, environmental protection, and health. At the same time, the overall capacity of wire and cable is seriously excessive, and the utilization rate of general wire and cable production equipment is generally less than 40%; the industrial concentration is not high, the development momentum of enterprises is insufficient, the independent innovation capability is not strong, and the homogeneity of medium- and low-end products is severely competitive; Disorderly over-expansion, market competition is not standardized. These problems will inevitably restrict the further improvement of the quality of wire and cable products.

The wire and cable classification and corporate profit model are classified according to the National Bureau of Statistics. The wire and cable industry belongs to the electrical machinery and equipment manufacturing industry. Classified by purpose, the main products include power cables, bare wires, winding wires, cables for electrical equipment, communication cables and optical cables. Wire and cable products are classified according to voltage levels, which can be divided into different voltage levels such as low voltage, medium voltage, high voltage, ultra high voltage, and extra high voltage. In China, the voltage below 110KV is called the distribution voltage, and it completes the function of stepping down the power and distributing it to the power user in a certain way; the voltage between 110KV and 1000KV is called the transmission voltage, and the long distance to complete the power. Transmission function. In the transmission voltage, the voltage between 110KV and 220KV is high voltage, the transmission voltage between 330KV and 750KV is ultrahigh voltage, and the voltage above 1000KV AC and plus or minus 660KV is called UHV.

The wire and cable industry management organization is the China Electric Industry Association's China Electric Industry Association's wire and cable branch. Its main function is to assist the government in the industry self-regulatory management, represent and maintain the interests of the wire and cable industry and the legitimate rights and interests of member companies, organize the development of wire The cable industry, in keeping with the rules and regulations, etc.

Ordinary cable companies mainly make profits by earning processing fees. When an enterprise signs a sales contract with a customer, it generally uses the purchase price of the copper rod plus a certain percentage of gross profit as the sales price. In terms of payment collection, customers mainly use stage payment mode, such as “2—5—2—1” mode, that is, 20% prepayment will be paid after the contract is signed, 50% after product delivery, and 20% after product installation is completed. The remaining 10% is paid as a quality guarantee after the warranty expires. This payment model requires cable companies to rationally plan cash flow and avoid cash flow difficulties. In terms of procurement of copper rods, some purchase prices adopt the current price model, and some adopt the pricing model of copper aluminum spot price plus copper aluminum rod processing fee. Different procurement and sales models allow cable companies to cope with fluctuations in raw material prices. Different risk exposures.

Problems encountered in the development of wire and cable industry The wire and cable industry is more dependent on capital. Affected by the prices of raw materials such as copper, aluminum, and plastics, cable manufacturers face tremendous cost pressures. The shortage of funds and tight funding chain have become an important factor restricting the development of small and medium cable companies. With the increasingly fierce market competition, mergers and acquisitions and capital integration of cable companies have become an inevitable trend.

Equipment integration The production equipment is a fixed asset of the company and an important resource for the company. Many products produced by companies are accidental and infrequent. Therefore, part of the production equipment of the company will be idle for a long time. The idleness of resources is the biggest waste. Therefore, companies must carefully analyze the use of relevant equipment, and integrate the production equipment and production lines of the company.

The "Guidance on Promoting Quality Improvement of Wire and Cable Products" (hereinafter referred to as "Opinions") issued jointly by the AQSIQ, the Ministry of Industry and Information Technology and related industries and trade associations on November 14, 2011 was publicized on the AQSIQ website, causing media attention. The core spirit conveyed by the Opinions is the comprehensive improvement of product quality supervision, industrial policy restraint and guidance, etc., which raises the overall level of China's wire and cable product quality and promotes this industry, which has been hailed as the “vascular” and “nerve” of the national economy. The sustained and healthy development. Insiders privately likened this comprehensive rectification to a “storm”, but more people think that this will be a long, deep, orderly slow effort. It will not be a "gust".

Second, the future development trend of China's wire and cable how to open up the market puzzle?

Only by concentrating resources and specializing in the main business can we make the cable industry bigger, stronger, and better. Only focusing time on the cable industry will help foster professional talents and technology. Many areas of the cable manufacturing industry are high-tech intensive industries. Without a strong professional and scientific team, it is impossible to carry out technological innovation and scientific research and development.

For China's cable economy to integrate into the global market, it needs more standard sense of competition and a sense of national responsibility. Chinese companies must also learn to use technology strategies that compete with standards and rivals. If China's international bidding for large projects, but also set national standards, the future market competitive advantage will be clearly reflected. The facts show that nothing can be done as a result. In the next few years, the national cable manufacturing industry will continue to experience a difficult stage. There must be a number of backbones, always focusing on the development of the cable industry, and supporting the banner of China's national cable industry. The development of specialization can be extended along the upstream and downstream of the product and industrial chain. The development space is actually huge.

When many Chinese companies opened up overseas markets, we found that in addition to a series of trade protection barriers, foreign countries often set technical barriers through the formulation of technical standards. Technical barriers also allow Chinese companies to pay enough production costs and marketing costs. For example, to enter the US market to pass UL certification, to meet European standards in Europe; some European industries even have to revise a standard every two years, the purpose is very clear, that is, allow you to turn around their standards. China's standards are far behind the changes in emerging markets. Front-line products such as wind power, nuclear power, optoelectronics, and power grid smart grids do not have the early intervention of the national standard.

Recently, the global wire and cable market has become more mature, and the development of wire and cable manufacturing has slowed down, with little growth. With the changes in the external environment and the impact of internal competition, the world wire and cable industry has entered the pattern of several giant monopoly competition. Almost at the same time as South Korea’s LS Group announced its entry into China, the new plant, Naksen (Shanghai) Cable Co., which invested EUR 2,200, has officially started operations in April, marking the beginning of the production of advanced special cables in the world. The market demand for special cable products has set up a huge and delicate stage for us. We need to grasp, develop, and occupy ourselves. When ordinary products are highly competitive and unprofitable, why not focus on the development of special cable products?

In short, as the cable industry gradually matures and industry competition intensifies, corporate mergers and restructuring will inevitably lead to the reintegration of products, talents, funds, and equipment within the industry and between companies.

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