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Chinese cable industry increasingly clear hierarchy

Information Source:Henan Huadong Cable Co., Ltd  Release date:2014-04-23

China as one of the world's largest energy infrastructure market, is still in the stage of rapid development. Although in recent years, the world economic recovery is slow, the domestic GDP growth, industrial growth fell, operation pressure caused by raw materials industry, automobile industry, shipbuilding industry, consumer goods industry and electronic manufacturing industry to increase, resulting in a certain influence on the wire and cable market.

At present, Chinese economy is poised for recovery. The first half of last year, Chinese wire and cable enterprises experienced a period of low tide period, from the beginning of the second half of the year, gradually smooth operation. According to the survey, from the beginning of October last year, wire and cable enterprises in China, the average operating rate was 84.26%, a year-on-year rise, and the value is higher than the 2012 annual average operating rate of 74.5%, and for 7 consecutive months in more than 80%. This has fully demonstrated that China's wire and cable industry market continues to rebound, but also for the development of local cable industry to re-establish confidence.

But with the continuous development of domestic wire and cable industry, some of the obstacle on the development road is more and more clear, the first domestic cable industry is showing increasingly clear: the characteristics of industry level. Which mainly includes two aspects, one is the advanced technology, capital, management strengths world wire and cable giant, with joint venture or sole proprietorship enterprise in the form of Chinese, occupy the high technical barriers, higher margin industry market, high-end special cable field distribution in electric power, communication and electrical spare line techniques require a higher level, exacerbating differentiation, industry level and at the same time, but also exacerbated the industry specialization.

Secondly, China wire and cable industry, state-owned and private investment in the fierce competition, industry gradually clear. For example, in the industry is absolutely leading enterprises including several famous Multi-National Corporation, as well as in some product areas occupy a certain monopoly enterprises, such as Baosheng, Guangdong Nanyang, in the interest of domestic enterprises; third levels of enterprises there is a certain characteristics of the industry and competitive capacity of enterprises, such as the Qi Star, Sichuan Star Dongguan Huaxin, domestic enterprises; finally, the fourth level is the lack of features, the competition in the market difficult to be competitive even in the face of cable production enterprises eliminated, closure risk.

In the face of many foreign competitors, China local enterprises still feel heavy pressure. For example, the development of Chinese local cable industry is still extensive. As everyone knows, the rapid development of wire and cable industry still depends on resource and huge investment, growth rate and industry output value of industry assets growth difference. According to statistics, asset growth rate reached 12.20% in 2012, while industrial output value growth rate of 12.23%. In recent years, industry growth is largely due to the growth of industry investment, but compared to 2011 industry assets growth of 25.17%, industrial output growth of 18%, a change in the development of the industry.

In addition, the extensive mode of development caused by the local cable industry overcapacity in low-end products, high-end cable R & D deficiency. According to statistics, about 90% of the domestic wire and cable companies mainly engaged in low-voltage wire and cable production, the production equipment has the advantages of simple process, and high-end products such as nuclear power cable, cable, cable for ship robot fields mainly rely on imports.

At present China wire and cable industry intense market competition, most of the domestic small and medium enterprises use more price competition. Wire and cable enterprises lack of development potential, the ability of independent innovation is not strong, the added value is relatively low in the low-end wire and cable market, price competition generally. The industry has more than 40% enterprises encountered the lower than cost price, price and other bad malicious peer competition experience. At the same time, wire and cable costs of raw materials, and most of the products China production for low-end wire and cable products, therefore, a lot of wire and cable production enterprises at a profit or even losses.

When it comes to high-end cable products R & D, due to lack of industry concentration, small and medium-sized enterprises lack of funds and enterprise operation ability is not strong, resulting in wire and cable enterprises blindly pursuing profit maximization, the enterprise does not take the technical innovation and the improvement of product quality in the first place. And so the situation is: some technical innovation of cable manufacturers and strict quality spirit is not strong; in addition to a number of small and medium-sized cable production enterprises, is the conscious incompetence, too, having a heart but no strength.

Of course, the local cable industry faces the dilemma of not only stated before, enterprises with foreign capital continuously into the China market relative to, from outside threats seem more brook no delay. In recent years, the capital structure of electric wire and cable industry Chinese increasingly diversified, the weakening of state holding enterprises in the position in the industry, private, foreign investment increased obviously. In the middle and low voltage wire and cable production, domestic private enterprises have become the dominant force in the industry. Share holding enterprises output value of private wire and cable industry accounts for 69%, the number of enterprises accounted for 70.6%, 62.4% of assets, employees accounted for 51.2%, the total profits and taxes accounted for 66.2%. But foreign large cable companies by virtue of its technology, capital, management advantages, in the breakdown of the industry, especially the occupy a great advantage in the competition for high-end special cable.

In particular, both the party's "Eighteen" is the two session of the twelve National People's Congress was held successfully, all walks of life are to transfer a positive signal, means Chinese Construction Comprehensive arrival, also means that the high-tech products will realize one's ambition. Thus for the wire and cable industry in China is mixed, is a big building will promote the development of the cable industry, on the other hand is to attract more foreign companies into the Chinese, wholly-owned or joint venture companies, on the local cable industry's market share in a new round of robbery.

HUADONG Henan Huadong is a hi-tech, engineering group. We are specialized in the research,development,and production of ABC Cable,Rubber Cable, mv medium voltage power cable,Control/Instrumentation Cable,Mining Cable, Bare Conductor(AAC/AAAC/ACSR/ACS), Huadong Cable Supply the price of 16mm armoured cableat competitive.
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