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        Wire and cable industry reshuffle is inevitable

        Number of visits: Date:2014-6-27 11:53

        At present, China's wire and cable industry more than 99.6% of the enterprise for small and medium-sized enterprises, industry overcapacity, market turmoil, the industry profit plummeted, part of the small businesses have shut down collapse, industry reshuffle is inevitable.

        On a global scale, China's wire and cable output has surpassed Japan after the United States, is the world's second largest producer of cable. But, as the basis of the main industry, both in the market standardization degree and valued degree, the cable industry are not getting the attention they deserve. Although the current cable market capacity growth faster, but the increase of production has been far more than an increase in demand. At present there are size wire, cable, fiber optic cable, and the national 3967 electrical equipment manufacturing enterprises, 99.647% of whom are small and medium enterprises, these small business products without quality guarantee, no guarantee of funds, nor reputation guarantee, mostly with lower prices malicious grab market.

        Raw material prices continue to run high, also make the enterprise under strain. Heavy industries as "light" industry, copper, aluminum, plastic raw materials in the wire and cable products such as the cost of more than 80% of the total cost. Since 2007, the price of energy, transportation and human resources costs rise, make the enterprise cost increase, industry profit margins plummeted, reached the edge of the losses. Especially high copper prices, greatly increased the cost of production, the biggest impact is small and medium enterprises, these enterprises are widespread liquidity shortages and disadvantages such as market competitiveness is not strong, the production and business operation is more difficult. Some smaller enterprises difficult to bear the pressure of high copper prices, closed down to fail, looking for new business opportunities, and survived only a few are in a state of no profit.

        Market turmoil seriously affect the industry development. First of all, serious local protectionism. At present, the large electric wire electric cable companies have 14, are mainly distributed in jiangsu, guangdong, shandong and other places. Nationwide, the basic formation of a unified market, invisible barriers between around but not broken, the cable industry of local protectionism is very serious. Nonlocal cable enterprises to enter the local market, if you want to often face many barriers, unreasonable or even illegal barriers essentially hindered the healthy development of the cable industry. Second, the sales way chaos. Bidding is the most common way of selling, the cable industry and the current domestic bidding mechanism is very chaotic. In bidding enterprises, more than 80% using the standard of lowest bid. Due to many bid no uniform standard, vicious competition and unfair bidding situation is serious, a lot of unlicensed companies relying on the relationship between bid. Pursuit of low-cost approach led to the inferior cable crowd out normal product. In addition, enterprise payment is not reasonable. Domestic wire and cable industry unreasonable payment, plus the price of raw materials, has made a lot of industry enterprises liquidity reduction, enterprise financial management more difficult. So, wire and cable excess capacity in our country, the cost of production increases, the flow under the condition of shortage of funds, its solvency decreases, to add to the additional production enterprise working capital turnover difficult.

         

        TypeInfo: Industry News

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