“The development of any industry has a life cycle. In the 10 years between 2000 and 2010, it is a golden decade for the development of China’s power industry. The annual growth rate of the power industry has remained at around 12%, and it has been increasing since 2012. Entering the decline channel, this year's view can be maintained at a maximum of about 7%.It should be said that China's power equipment industry has entered a period of medium-term growth, the next few years may enter a period of low growth, some companies do not have competitiveness will face deep integration M & A, restructuring or bankruptcy is inevitable." Recently, Yang Hengkun, chairman of Dongfang Electronics Group Co., Ltd. ("Eastern"), said in an interview with a reporter from China Electric Power.
Yang Hengkun’s concern is not groundless. According to the statistics of the China Electrical Equipment Industry Association, in the first half of 2012, China’s power equipment industry has seen a rare “negative growthâ€, and this year, the days of manufacturing companies such as cables, transformers and low-voltage electrical It is also not too good. The drawbacks of overcapacity, falling profits, vicious competition and declining quality are plaguing the traditional power equipment industry. According to Bai Wenbo, the deputy secretary-general of the China Electrical Equipment Industry Association, if it does not make timely and effective adjustments, 2014 will be a more difficult year.
Low-end manufacturing and excess capacity have repeatedly been criticized
"When electricity consumption changes from high-speed growth to medium-speed growth, it means that the inflection point of investment in the entire power industry has emerged. This turning point comes from the market rather than from people." Yang Hengkun told the "China Electric Power News" reporter. After the high-speed development of China's power industry for many years, the pace of development has gradually returned to rationality. In the world financial crisis, the demand in the international market has also been drastically reduced. With the continuous development of new technologies, domestic traditional products have obviously been unable to meet the power demand in the new situation.
“The reasons for the deep reshuffle are many, the most important are two aspects: First, the domestic power equipment is mostly in the low-end manufacturing category, out of line with the market; Second, serious excess capacity, such as transformers, cables, fans, photovoltaic The problem of overcapacity is more or less present in components and even some high-end products,†said an industry expert.
In fact, due to the lack of unregulated investment in standardized management, the low-end manufacturing and overcapacity in China's manufacturing industry have long been repeatedly criticized. According to the "Research Report on the Profit and Investment Value of China's Electric Power Equipment Industry in 2012-2016" released by Champion Consulting, the overcapacity phenomenon has appeared in China's power equipment industry. Affected by international, domestic and market demand, this situation will not change for the time being. In the next few years, the power equipment industry will lead to the era of low profit, and some small businesses may face restructuring, merger or merger during this period of time. Acquisitions and other situations.
The data from China Mechatronic Industry also shows that in 2012, the utilization rate of thermal power equipment, hydropower equipment and nuclear power equipment industry in China was between 70% and 75%, and the utilization rate of photovoltaic equipment was only less than 60%. The utilization rate of wind power equipment capacity was less than 70%, the transformer industry capacity utilization rate is only about 50%.
The bad news brought about by homogenous competition is low-price competition and quality problems. Low-price competition will make the situation worse, such as cutting corners, shoddy goods, low-price competition sales, and even counterfeiting. Some large manufacturers also have a profitable crisis due to excess production. According to relevant statistics, nearly 30% of the equipment companies have shown negative profits this year, and there has been no continued funding to expand production or technology upgrades.
Mastering core technology is the key to transformation and upgrading
Since the beginning of this year, dozens of power equipment companies visited by the “China Electric Power News†reporter have involved cables, transformers, primary and secondary equipment, and so on. “In the next few years, the industry will have a 'closing tide'â€, which has almost become a common topic. Upgrading has also become an indispensable homework for dealing with this shuffle.
"If a company wants to develop more evenly, it must have other diversified industrial sectors as its support. That is to say, keeping the ten eggs in the same basket is an old-fashioned operation that is not desirable. Master core technologies and realize true multi-innovation to improve the level of technology. We no longer follow the trend, imitate, and have the courage and ability as a technological leader.†Yang Hengkun said.
It should be said that the next five years may be a five-year period when our country is actively developing its difficulties. It is at a critical period. No matter what the ownership system is, if anyone loses the best and final opportunity for this transformation and upgrading, and changes the development mode, anyone will be passive.
“Under the current complex and changing world economic situation, many companies are faced with a series of operating difficulties and risks caused by factors such as excess production capacity, intensified industrial vicious competition, substantial increase in the cost of production materials and labor costs, and inflation. It is necessary to promote the transformation and upgrading of enterprises.†The party secretary and general manager of TBEA Hengyang Transformer Co., Ltd. Yan Yanmin said in an interview with a reporter from China Electric Power.
In a sense, mergers and reorganizations are not a bad thing for the power equipment industry where the production capacity has been excessively overstrained. Through deep reshuffling, the company’s structural adjustment and transformation and upgrading are promoted, and market-oriented development promotes the development of high-end products and promotes industrial enterprises. From the pursuit of speed, scale to improve the core technology, product quality changes. At the same time, technological innovation and upgrading will help domestic companies enhance their competitiveness in the international market and further expand overseas markets.
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