Paint industry: the more eliminated the more excess circle behind

China Coatings network
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article source: Tse building energy networkcoatings
industry to eliminate backward production capacity into the "accelerated year." This year, Beijing Changping District cleared 50 polluting enterprises that did not meet the functional positioning of the capital, mainly involving furniture, spraying, small chemical and other industries. In addition, Shanghai, Guangdong and other places have also introduced a variety of environmental protection policies to accelerate the elimination of backward production capacity of paint.
of backward production capacity is always accompanied by the expansion of new capacity. In May, Chenyang Industry and Trade announced the construction of an annual production line of 125,000 tons of water paint in Bono County, Baoding City, Hebei Province, and the construction of a 1 million tons of water-based paint base by the end of 2015, with a final annual production capacity of 1.25 million tons;
Powder Coatings
production plant, so that Qingpu powder coating plant production capacity is twice the original, July 1, The Jiabao Group announced a total investment of more than 400 million yuan Jiangmen and Hebei two bases officially put into
operation, making the total annual production capacity of Jiabao reached 660,000 tons; On the one side is the rapid horse to eliminate backward production capacity, on the other side is non-stop capacity expansion. It can be said that structural overcapacity has become the industry's "label", but why has real capacity growth not stopped? Behind the cycle of "more elimination, more surplus", what is the factor behind the blame? Why are backward production capacity companies still "living well"?Investment is still at a high level
in January-July 2014, including Pearl River Chemical, Hongchang Chemical, Oriental Yuhong, Wanzheng, Huitai Chemical, Zhongnan, Baotashan, Chenyang, Jiabao, United Chemical and other domestic coating enterprises, as well as AkzoNobel, Asda and other foreign giants, have recently announced the establishment of new production bases or new production capacity, people feel that China Tu city is still in a hot state.
the current expansion of capacity, compared with the market as a whole showed the weak situation, it is simply "ice and fire two days."
understand that in 2013 China's total production of the coating industry reached 1303.349 million tons, an increase of 3.58 percent year-on-year, down nearly 8 points from last year's growth rate, the lowest in nearly a decade.
the first half of this year, China's paint industry has rebounded, fixed investment growth is still at a high level. According to the Ministry of Industry and Information Technology's recently released "Economic Operation of the Petroleum and Chemical Industry in January-May 2014", Tu and pigment manufacturing ranked third with 21.6% growth, accounting for 6.2%, while Tu (Yan) materials manufacturing industry's main revenue increased by 13.6%, still ranked second.
high investment growth rate, China's paint production in the first half of the year also achieved simultaneous growth. According to the latest data released by the National Bureau of Statistics, China's total paint production in January-May 2014 reached 6.1303 million tons, an adjusted year-on-year increase of 8.91 percent, an increase of 3.52 percentage points over 2013, but down 0.58 percentage points from January-April. At the end of last year to the beginning of this year, the decline in the total national paint production situation has been completely reversed, with the arrival of the paint production season, in the short term, China's total paint production is expected to maintain a growth rate of about 9%.
addition, the paint industry's main business revenue also achieved growth. From January to April 2014, china's main business income of
coating enterprises
above the statistical range was 110.613.86 million yuan, up 13.8% YoY; Of the 1,950 companies counted, 14.5% lost money.are wary of the implicit worry of capacity expansion
when the tide fades, we know who is swimming naked. The same is true of the paint industry, where, as macroeconomic growth slows, the once-booming production capacity is beginning to highlight excess pressures.
2013, the paint industry's record of total production growth ended more than 10 years of rapid growth, many paint companies feel the market pressure, into the stage of development confusion. What's the direction of Tu Market? A fashion is hard to predict. But one problem is already on the horizon: the huge capacity that is rapidly expanding to cater to the market has reigned concerns about overcapacity.
In the face of the current paint companies have expanded production action, some industry insiders call, although the current domestic coating market has been heating up, but the market potential for further mining is the need for a process, in 2013, with the weakening of some policies, paint sales have a gradual downward trend, if still so blindly expand production, the domestic paint industry in 2014 may be more serious overcapacity situation.
" the current situation of coating enterprises to expand production and market production does not increase income is the same nature of the problem, are a structural overcapacity. Li Ming-moon, observer of Tujie Enterprise and Market Research, pointed out.
analysts, the problem of paint overcapacity should be looked at in two. The size of production capacity is not very important, the key depends on the profitability of enterprises, profitability went up, enterprises are really bigger and stronger, is the real expansion of production capacity. "Some paint companies claim to be selling dozens, if not several times, of increased sales year after year, but what's the use of not making money?"
at the same time, Li Mingyue also said that at present, there are indeed some paint enterprises are insufficient capacity, such as Jiabao, Hongchang Chemical, etc., but there are some paint enterprises are idle production lines, belonging to overcapacity. "Proper overcapacity is still possible, because competition is only possible if there is a moderate overcapacity." If there is always a shortage, then the enterprise will lose the momentum to develop. Of course, if overcapacity, especially structural overcapacity, is severe, it is worth watching out for, which will lead to vicious competition in the market. Li
said the back of the frenzied expansion needs to be digested, and the export of capacity, output, products and capital needs to be digested. Where to digest? is to the market, consumers pour. In the process of dumping inevitably appear vicious competition, fraud, false and so on we see the social bad phenomenon, when this atmosphere accumulates to a certain extent, there will be other problems, such as reduced profitability. This is enough to alarm the industry.the more backward capacity is eliminated, the more excess capacity is eliminated?
on the other side in a large number of backward production capacity, on the other side of the crazy new projects, the result of new capacity than eliminated capacity several times higher. And such absurd scenes have been repeated, resulting in the elimination of backward production capacity action becomes useless, domestic paint overcapacity situation is becoming more and more serious, may make the whole industry into the mire of loss.
", in addition to China's paint enterprises' own innovation power, capacity is generally insufficient, structural overcapacity is to a large extent the reason for excessive government intervention in the market, which is a special phenomenon in China. Some local governments, considering political performance and fiscal revenue, even resort to relaxing environmental and social security standards to undermine fair competition in the market to attract investment. Industry analysts said.
" this will lead to new paint projects continue to blindly start, repeated construction serious, coupled with the industry did not establish monitoring and early warning mechanism, did not raise the market access threshold, industry associations and relevant departments of the state also did not carry out industrial adjustment and guidance, the final problem came out. The analyst noted.
According to this reporter learned that June 20-22, Guangdong, Shunde two major paint associations organized some of the member enterprise representatives to Yongxing County, Zhangzhou City, Hunan Province, "two new" industrial park and Anren County Dajinshan fine chemical park inspection, including China Resources coatings, including 40 enterprises have the intention to invest in. Yongxing County Government, on the other end, has given preferential policies.
It can be said that in this china-endearing phenomenon, relying on administrative means to eliminate backward production capacity practices, although it seems sensational, every year some backward production capacity is forced to shut down, but only play a short-term effect, did not stop the pace of coating enterprises to expand production capacity, resulting in rapid increase in paint production capacity year by year, showing more and more elimination of the "weird circle." It can be seen that in order to get out of the "weird circle" of eliminating backward production capacity, we should get rid of administrative dependence, take the market-oriented road, and realize the survival of the fittest through the laws of market competition.
Under the pressure of capital cost and operating cost, the overall profit of the paint industry is small, "the price of paint products is not as good as the price of cabbage", and under the pressure of macro-control, infrastructure, real estate and other demand fell sharply, ships, automobiles and other industrial manufacturing industry demand is also reduced, paint capacity utilization rate is too low situation can not be improved, some enterprise losses are inevitable.
" is in such a severe environment, paint companies around the country are still aggressively expanding production capacity, trying to rely on the size of the industry to maintain market position, in order to compete with other enterprises capacity. Clearly, the paint industry has entered a 'prisoner's dilemma', and no one wants to reduce production capacity, but instead pins their hopes on expansion. Mr Li said. can we "live well" with our backward production capacity?
" from the root cause of backward overcapacity analysis, the core problem of eliminating backward capacity is the government, that is, the need to break the barriers of interest, strict environmental protection, energy consumption, the elimination of the resolute elimination, can not be backward capacity enterprises with one eye closed. Mr Li said.
in a sound market environment, backward production capacity should be eliminated naturally, but now, advanced production capacity with advanced technology and small pollution does not necessarily make money, but backward production capacity is often "living better". "Environmental enforcement is lax, corporate tax standards are different, and the social burden is not equal is the main reason."
At present, China's economic growth rate is still relatively high, real estate, automobiles, bridges and wind power new energy construction and other industrial projects of high-speed growth and development, as well as the country's new urbanization construction and shantytown transformation, etc., have provided the paint industry with room for survival. "There is room for market development, and some small workshops and small businesses are looking for opportunities to enter the market with low-end backward capacity."
" some enterprises without technical content, often at low prices to seize the market, so that we are also difficult to deal with. Although they do not have a large capacity, but in the market is still alive very well, they are too speculative, can catch a hand, any risk can be launched in time to the market, but does not affect them. "The head of a paint enterprise through QQ interview to this reporter said.
Vactening space to promote industrial upgrading
For some enterprises, the elimination of backward production capacity means doing "subtract" - equipment elimination, personnel removal, broken capital chain;
only by eliminating backward production capacity can we make room for advanced production capacity, improve product structure, improve product quality and increase enterprise efficiency. Therefore, the strength of enterprises to seize the opportunity to eliminate backward production capacity, expanding advanced production capacity. Mr Li said.
it is understood that Guangdong Hongchang Chemical Co., Ltd. invested 50 million yuan, an annual production capacity of 80,000 tons of water-based paint production base is expected to start production this year, and the project will all use automated production equipment.
, according to Hongchang Chemical General Manager Guo Xi has introduced, not only the new base of the new introduction of fully automated production equipment, this year the old base of the production system will further accelerate the automation process transformation. "Upgrading equipment not only saves labor, but also increases productivity."
With the automation upgrade of the production system, Hongchang Chemical's coating products will also usher in a new round of upgrading, will eliminate backward equipment and backward production capacity, to produce more environmentally friendly, high-tech coating products. It can be said that Hongchang Chemical in the elimination of backward production capacity to do "subtract" at the same time, but also do enough "addition" for high value-added products to make room for development.
As China's largest all-water paint production enterprises - Hebei Chenyang Industry and Trade Group Co., Ltd., on May 30, baoding Bono County People's Government held a "total investment of 750 million yuan, an annual output of 125,000 tons of water-quality paint project" signing ceremony. It is understood that Chenyang Group is currently actively planning the implementation of Bono, Xu Shui thousand mu industrial park construction, to build China's largest water paint production and research and development base, is expected to exceed one million tons of production capacity by the end of 2015.
It is learned that Chenyang water paint last year and the Chinese Academy of Sciences Institute of Process Engineering signed a strategic cooperation agreement, the agreement is mainly for the "nano-functional materials joint laboratory" co-construction and new product development, and these research and development technology will also be applied to the new production base, which will greatly improve the technical content of Chenyang water paint.
Li Ming-moon pointed out that from the first half of this year, some investment projects, the investment field is mainly concentrated in water-based paint, and the technical content is relatively high, belongs to advanced production capacity, which will bring positive impact on the future healthy development of China's paint industry. For enterprises to avoid structural overcapacity, we must build their own core competitiveness, technological transformation is the most critical way out, improve added value in order to really strengthen market competitiveness, to promote high-tech industrialization, improve independent technological innovation ability, the use of high-tech, information-based means to transform and upgrade traditional industries, change the original low-end route, high, refined, sharp products as the focus of future development, no longer repeat low profits, low efficiency, high pollution, high energy consumption of the old road.
", however, in the future, China's elimination of backward production capacity to further strengthen there is no doubt that the elimination of backward production capacity means that will free up some space, just to provide opportunities for high-quality enterprises to replenish production capacity. It is worth noting that this will also bring about the restructuring of coating enterprises, and ultimately will be 'strong Hengqiang'. Mr Li said.