Since the beginning of this year, the domestic cable industry has entered an unprecedented dilemma. At the end of July, a reporter from Science and Technology Daily came to Yixing City, Jiangsu Province, which is known as the city of China’s cable, and saw that most of the companies here are underemployed, the market sales have fallen to the bottom, and the economic benefits have been falling...
Wire and cable, which has been one of the pillar industries in Yixing for many years, once propped up half of the economy here. Two years ago, companies from all over the country came to queue up to purchase goods. The people tried to find a way to work in a cable factory. That scene was still deeply in the memory of Yixing people, which is in stark contrast to today.
The days of business are getting sadder and harder. Right now, some companies are trying to survive. They are not looking at production alone, they are trying to save food, and companies with vision and strength are already looking for new investment directions. Insiders told reporters this way.
What happened to the cable industry? What do you think about the industry? To this end, the reporter visited Jiang Xipei, chairman of the Board of Directors of Far East Holding Group, the largest listed company in China's wire and cable industry, with the largest number of employees and the highest market capitalization.
The problem of overcapacity of cables is very worrying. For now, even if we do not invest in 510 years, we can still meet the economic development. Jiang Xipei said.
In recent years, with the rapid development of telecommunications, electricity, energy, and transportation in China, cable manufacturers have emerged in large numbers like bamboo shoots. At present, there are more than 7,000 cable manufacturers in the country. Among them, only Guanlin Town of Yixing City, there are more than 500 cable production and supporting enterprises.
In the survey, the reporter found that in this industry, some newly-established business owners were originally professional cable sellers. After they have accumulated a certain amount of capital, they look at the cable to make money and start setting up their own factories. However, in fact, a large part of these companies are not only lacking product development capabilities, but also lacking corporate management experience.
The entry of low thresholds has led to more and more cable manufacturers, and the homogenization of products has become more and more serious. In particular, as the price of copper and various raw materials in the market have risen sharply, many companies have chosen unscrupulous business practices in order to seek more and greater benefits, and even deliberately use inferior materials to produce, in order to reduce costs, this will inevitably lead to Directly leading to the conductor resistance, degree of cross-linking and other key indicators do not meet the standard requirements. At present, in the cable industry, many products fail or are inferior products. Jiang Xipei said.
Uncontrolled expansion drags the entire industry into loss-making quagmire
According to industry sources, the problem of overcapacity in the cable industry has actually reached a more serious level as early as several years ago. In order to maintain the sustainable and healthy development of the industry as a whole, some key enterprises in the industry and related experts have repeatedly raised this issue with relevant government departments and industry associations. However, after the financial crisis of 2008, with the drive of a new round of stimulus plans, it has also given birth to a new wave of capacity expansion in the cable industry.
The overcapacity brought about disastrous consequences. Nowadays, increasingly vicious competition has led to a downturn in the profitability of the entire cable industry. This year, the average profit rate of the industry has been declining. The development of such extensive development is not the problem of the survival of a single company, but the loss of the entire industry. Jiang Xipei said with sadness.
In fact, it is not only Jiang Xipei who has the same opinions and concerns, but also the CEOs of a group of key enterprises in the industry, such as Jiangsu Shangshang Cable Group, Baosheng Group, Hengtong Group, and Shuangta Group. Control, strict management, and strict inspection of a series of problems brought about by excess capacity.
However, despite the severe overcapacity in the domestic cable industry, some local government authorities and industry associations lacked reasonable guidance for corporate investment, and some companies are still blindly expanding. Similar phenomenon is particularly prominent in southern Jiangsu.
According to Guanlin Town of Yixing City, the tower-type ultra-high-voltage cable production lines that marked the expansion of production capacity in recent years are newly added. Blind investment, such as the completion of the construction of the tower, may be the beginning of cable factory losses. The related person interviewed by the reporter pointed to Lita, who had not yet started production, worriedly.
The government can strictly control the development of the predicament of deformity
In Jiang Xipei's view, regardless of a serious overcapacity, or the order of the industry and product quality, it is time for the government to control. The government should actively encourage companies to acquire mergers and capital increase, strictly control the newly-prohibited industries to newly approve new enterprises and production licenses and quality certification; as cable companies themselves, they must fundamentally change the concept of development, give full play to the special role of scientific and technological talents, and accelerate Develop high-end products with core competitiveness and eliminate homogenization and low-level competition. In particular, the backbone enterprises of the industry must also bravely take up corporate responsibilities, industry responsibilities, and social responsibilities. Only through comprehensive integration of resources, complementary advantages and survival of the fittest can the cable industry achieve sustained and healthy development.
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