What elements are needed for the transformation of the wire and cable industry

The concentration of China's wire and cable industry is low, and the industry leader needs to be formed

Although the overall scale of China's wire and cable industry ranks first in the world, there is a large gap between the industry concentration and developed countries, the wire and cable industry in developed countries has developed for many years, especially in the face of fluctuations in raw materials, small enterprises have gradually withdrawn from the market, and the industrial concentration has increased significantly: the top 10 cable manufacturers in the United States (such as GM, Belden, Corning, South Line, etc.) occupy about 70% of the market share; Japan's seven major cable companies (such as Furukawa, Sumitomo, Tengcang, Hitachi, Showa, etc.) account for more than 65% of the market share; The five major cable companies in France (Nexans, Xinte, etc.) account for the turnover of the French market, accounting for more than 90% of the French market share. China's top ten cable companies only occupy less than 10% of China's market share, and the development potential of leading enterprises is huge.

Development trend: the concentration of the industry has been further improved, and the prospects of special cables are promising

Since 2014, wire and cable manufacturing enterprises around the world have begun the pace of mergers and acquisitions, and China's industry concentration is low, highly fragmented pattern is not conducive to the sustainable development of the industry, in the case of continuous improvement in downstream demand, the pace of mergers and acquisitions of China's wire and cable manufacturing enterprises will be accelerated, coupled with the introduction of copper options, will further reduce the impact of raw material fluctuations on manufacturing enterprises, and promote the improvement of industry concentration. Compared with ordinary cables, special cables have the characteristics of high technical content, strict application conditions, high added value, etc., and have more superior specific performance, which are mainly occupied by a small number of foreign-funded enterprises, joint ventures and domestic leading enterprises. With the progress of science and technology in China, the transformation of traditional industries, the rise of emerging industries and high-end manufacturing, the demand for special wires and cables will continue to grow, and the development potential is huge.

According to the country's planning for the main application fields of wire and cable - electric power (new energy, smart grid), rail transit, aerospace, marine engineering, etc., the prospect of China's wire and cable industry is good in the future, and the trend of industry product upgrading is obvious. It is estimated that by 2024, the scale of industry demand is expected to exceed one trillion yuan.

1. Ideologically, we should abandon the old concepts and adapt to the needs of new development; 2. Combine the characteristics of the enterprise and grasp the direction of transformation.

Transformation needs to solve the following three problems, that is, the following three elements need to be in place:

1. Quality problems and solutions in the wire and cable industry.

On November 1, 2011, the results of the national wire and cable product quality linkage supervision and random inspection were released, which tightened the quality nerve of the wire and cable industry. The main problems found in this spot check are the unqualified inspection items such as sheath weightlessness, insulation performance, structural size, and conductor resistance.

Solution: (1) the quality inspection agency to form a monitoring system (2) long-term product linkage spot checks (3) the production enterprises to correct the business attitude.

2. Human resources problems and solutions in the wire and cable industry.

Suggestions for training wire and cable talents: (1) Strengthen cooperation and cultivate talents. (2) Promote international exchanges. (3) Academic cooperation and personnel training.

3. Measures to solve the financing problems of wire and cable enterprises.

At present, in the context of poor financing channels in the wire and cable industry, in order to alleviate the problems of difficult loans and high financing costs for small and medium-sized enterprises, wire and cable enterprises in some places have begun to establish industry development and obtain more bank loans.

In March 2011, the launching ceremony of the development of wire and cable industry in Henan Province was held in Zhengzhou Shang District. According to reports, the establishment of industry development can be financed several times that of the development of loan funds through cooperation with the first custodian bank, and used in industry enterprises and upstream and downstream affiliated enterprises. The basic operation mode of the development of the wire and cable industry in Henan Province is that the association takes the lead, the enterprise contributes, the bank trusteeship and enlarges the scale of the loan, the industry recycles the use, and shares the benefits and bears the corresponding risks according to the rights and obligations of all parties.

At the launching ceremony, China CITIC Bank Zhengzhou Branch granted a credit of 600 million yuan to the wire and cable industry in Henan Province.

Reference: 2013-2017 China wire and cable industry market demand and investment strategic planning analysis report - prospective network.

Wire and cable transformation, industry transformation.

From a global point of view, the world's top ten cable giants mainly include manufacturers in Europe, Japan, the United States, South Korea and other places, and the analysis of the market expansion of these enterprises is conducive to domestic enterprises to learn from experience. For example, Nexans in Europe is a leader in the global cable industry, providing a full range of cable products and implementing a localization strategy in China; Japan's Sumitomo Electric started with copper smelting, and through the manufacture of wires and cables, the technology is cross-integrated, and the originality is strong; The United States General Cable is the world's largest manufacturer of special cables, and its products are leading in the nuclear power and shipbuilding industries; South Korea's LS cable is the world's leading supplier of ultra-high voltage cables, optical cables, and connecting plugs.

Qian Jianlin believes that in order to make up for the gap with foreign enterprises, it is necessary to increase research and development strength. First of all, strengthen independent innovation, and break through technical bottlenecks by vigorously improving independent innovation capabilities and introducing, digesting, absorbing and re-innovating; secondly, integrate the scientific and technological innovation resources of the industry, unite the scientific and technological innovation capabilities of scientific research institutes and colleges and universities, and form the enterprise's own scientific and technological innovation team; Focus on enhancing the soft power of the core competitiveness of enterprises, and form a number of core technology intellectual property rights through the implementation of intellectual property rights, standards and trademark strategies; To build a world-class international brand enterprise, through brand building, strengthen technological innovation, business model innovation, corporate culture innovation, human resources innovation, and strive to improve the quality of labor, so that the enterprise has become an international brand enterprise.

Although the wire and cable industry is an important supporting industry for China's economic construction, it accounts for a quarter of the output value of China's electrical industry. According to the data of "China Wire and Cable Industry Market Demand and Investment Strategic Planning Analysis Report", the production capacity of China's wire and cable industry in 2016 was about 70 billion meters. Affected by the slowdown in domestic economic growth and the difficulty of opening foreign markets, the output was 100 million meters (about 30% of the world), and the growth rate decreased by one percentage point year-on-year.

Overall, the existing production capacity is much greater than the output, and the capacity utilization rate is sluggish (about 60%), of which the capacity utilization rate of ordinary wire and cable enterprises is more generally less than 40%.

As of the end of July 2016, there were 3,758 wire and cable enterprises in China, mainly small and medium-sized enterprises, accounting for more than 95%. China's top 10 companies account for only 7% to 10% of the domestic market share, far lower than the 70% in the United States. Competition among enterprises is fierce, and vicious competition such as cutting corners, shoddy, and dumping below cost occurs from time to time.

To sum up, China's wire and cable industry is still facing great market pressure, and the industry will continue to deepen the reorganization of resources in the future, and take the road of differentiated competition to achieve a new breakthrough in the global market competition pattern of China's wire and cable industry.

In the power industry, referring to the prospective industry research institute's "China wire and cable industry development prospect and investment strategic planning analysis report" shows that wire and cable as one of the important supporting industries of national economic construction, wire and cable industry is the second largest industry in the machinery industry after the automobile industry. According to statistics, there are 4,653 enterprises above designated size in China's wire and cable industry, 85 enterprises with annual main business income of more than 1 billion yuan, and 36 enterprises with assets of more than 1 billion yuan.

Over the past 15 years, the average annual growth rate of the wire and cable industry has reached more than 15%, and in the next few years, as China is in the late stage of industrialization, the development rate of China's wire and cable industry will be higher than the development rate of the national economy, which is expected to reach more than 10%; In particular, power wires and cables can grow by an average of 15% per year.

According to the power and energy group of the Prospective Industry Research Institute, it is expected that China's power grid will usher in a first-class period in the next five years, and the wire and cable industry will have a "good opportunity". With the national policy and the State Grid Corporation of China's increasingly huge investment in smart grid, in order to cooperate with the implementation of the national west-to-east power transmission, power grid transformation and other projects, as well as the gradual advancement of urbanization, in the next five years, the wire and cable market capacity closely related to transmission and distribution will maintain a considerable growth rate of 8%-9% per year, and the wire and cable industry will usher in new opportunities.