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The threshold of cable industry needs to be improved


Release time:

2012-06-28

China has included wire and cable products in the scope of production license management, thus forming a certain industrial barrier, but this threshold is very low, many enterprises are flocking to it, although the market demand is growing at a rate of more than 10% per year, but overcapacity has led to excessive competition in the industry, and the average equipment operating rate of the whole industry is less than 40%.

 

China has included wire and cable products in the scope of production license management, thus forming a certain industrial barrier, but this threshold is very low, many enterprises are flocking to it, although the market demand is growing at a rate of more than 10% per year, but overcapacity has led to excessive competition in the industry, and the average equipment operating rate of the whole industry is less than 40%.

According to statistics, at present, there are tens of thousands of wire and cable enterprises in China, which have become the largest wire and cable manufacturing country in the world, but the market concentration of the top 5 is only 8.43, and the total share of the top 65 is only 30%. The 12 companies in the UK have carved up more than 95% of the country's wire and cable market, the top 10 companies in the United States have a market share of 67%, the seven largest companies in Japan account for 86% of sales, and the five largest companies account for 90% of the turnover in the French market. Globally, 25% of the market share is held by eight representative oligopolistic manufacturers. Italy's Prysmian Group alone has annual sales of more than 5 billion euros. 

Due to the low entry threshold of China's wire and cable industry, the out-of-control investment in production scale, the serious phenomenon of low-level repeated construction and the low concentration, many "workshop enterprises" that do not have the necessary means of production capacity, quality control and testing are also mixed among them. Coupled with the operating pressure brought about by the rising raw materials, the phenomenon of fake and shoddy, shoddy and shoddy has been repeatedly banned, and "non-standard" non-standard "products" prevailed. This not only buried a huge security risks, but also made it difficult for enterprises and distributors produced in accordance with the law; at the same time, foreign-funded enterprises rushed to enter the Chinese market and occupied an absolute advantage in the high-end market share, while only a few cable varieties in China can reach the level acceptable to the international market and can participate in competition, there is still a big gap between high-performance, high-quality, high-value-added cable varieties and international brands. In addition, with the promulgation of the EU WEEE directive, ROHS directive, EUP directive, etc., a green wave has been set off in the world, and many Chinese wire and cable manufacturers have encountered trade barriers in the export process, and their competitiveness in the international market has been weakened. 

There is a famous "Gresham's Law" in economics, also known as the law of "bad money drives out good money. From the perspective of consumers, it is obvious that they do not want to see the proliferation of "bad money" in the wire and cable industry. In view of the development status of this industry, Zheng Yonghan, executive president of Shenzhen Jinlongyu Group, suggested strengthening consumption guidance, improving users' awareness of quality and safety, advocating the use of high-quality national standard authentic products, and teaching consumers to recognize fake and refuse to buy inferior products. Guo Tingke, president of the electrical industry of Shenzhen Bendakang Group, also holds the same view. He also called on companies to operate in good faith and ensure the quality and quantity of products. Regulatory departments should step up efforts to crack down on the manufacture and sale of fake and shoddy products and unlicensed production, so as to improve the efficiency of law enforcement. For cable enterprises, consider the implementation of safety level certification system, qualification assessment, and as a basis for the qualification conditions to participate in project bidding, so that "good money" prevails in the city.

It can be said that the current problems in the cable industry are common problems faced by many traditional manufacturing industries in our country. The barriers to entry are not high, companies are uneven, market concentration is low, products are similar, price wars, and market order is chaotic. Industry insiders believe that according to the actual experience of foreign industry development and the practice and lessons of other industries, China's wire and cable industry urgently needs to integrate large-scale production capacity, carry out industrial agglomeration in a certain area, and encourage enterprises to implement product differentiation, technological innovation and brand strategy.