Metal and plastic enterprises to change the future of a 10-year opportunity

While China's hardware and plastics foreign trade enterprises have experienced significant growth in export trade, they are facing a situation where profit margins are further squeezed. On the morning of April 15, the 109th Canton Fair was grandly opened at Guangzhou Pazhou International Exhibition Center. The current Canton Fair will continue to be held in three phases. The scale of the exhibition will increase steadily and the number of exhibitors and the scale of the exhibition will hit a record high. The total exhibition area reached 1.16 million square meters, with a total of 24,415 domestic and foreign companies exhibiting, an increase of 816 over the previous session. The number of booths is 58,699, an increase of 1563 over the previous session. The first phase will be April 15th to 19th, mainly for electromechanical products; the second phase will be April 23-27, mainly for consumer goods and gifts; and the third month will be May 1st to 5th for textiles and apparel, Medicine and health care, food, and style are the mainstays. The import exhibition was set up in the first and third phases.

"International Hardware & Plastics Industry" reporter found that in order to deal with the pressure of shrinking profits, many hardware and plastic companies take the initiative to seek changes in product structure adjustments, brand building, sales channels and other aspects to make a lot of efforts. According to Luo Baihui, head of the International Mould and Metals and Plastics Industry Suppliers Association, from January to February this year, the total import and export volume of China's hardware and plastics industry was US$156.2 billion, and that of the total imports and exports of the country was 31.5%, up 34.8%, of which exports were 441.9. Billion U.S. dollars, 17.9% of the country’s total exports, an increase of 25%. At present, the international market has a huge demand for China's hardware and plastic products. Coupled with the increase in export prices, the transaction amount has increased significantly. Wang Jinling, deputy secretary-general of the association, said that the main reason for the significant increase in import and export volume was the sharp increase in prices. However, under the multiple pressures of rising raw material prices, increasing labor costs, and renminbi appreciation, most small and medium-sized enterprises, including their own companies, are generally faced with increasing cost pressures and tests of profits being eroded.

Electromechanical products are the highlight of Cixi companies. With the rising price of raw materials and rising prices of raw materials and human resources, how companies in Cixi in Ningbo respond to these challenges has attracted attention. As a large proportion of the export-oriented economy in Cixi, how did the exhibitors perform? As the leading industry of Cixi's foreign trade export, electromechanical products accounted for 75% of Cixi's foreign trade exports, and it also became the most concerned industry in the Canton Fair. At this year's Canton Fair, a total of 142 mechanical and electrical products companies participated in the Canton Fair. The total number of booths reached 380, and the cumulative export turnover was 308 million US dollars, a year-on-year increase of 6.5%. According to the survey results, 2/3 of home appliances and electronics companies reflected that the number of merchants attending the current Canton Fair was the same as last year's, more than expected. Cixi's exports of electromechanical products have achieved steady growth this year, and it is predicted that it will maintain an increase of 25% by the end of the year. From January to September, the export of mechanical and electrical products in Cixi City was US$3.895 billion, an increase of 39% year-on-year, which was 2% higher than the average level of the city. Among them, household appliances exported 1.8 billion U.S. dollars, up 40.9% year-on-year; bearing exports were 303 million U.S. dollars, up 61.3% year-on-year.

Taizhou's hardware mold enterprises gathered in the Canton Fair. Foreign trade enterprises in Taizhou City enthusiastically registered for the exhibition. A total of 535 companies made appearances, including 374 production companies, 55 foreign trade companies, and 106 foreign-funded enterprises. There were 1,473 booths, with 634, 493, and 346 booths in the first, second, and third phases, including 534 brand booths, 26 more than the previous one. Participating companies involved in automobile and motorcycle accessories, home appliances, plastic molds, sewing equipment, leading valves, furniture, handicrafts, shoes and hats, and other leading industries in Taizhou, fully demonstrated the strong lineup of the Taizhou Foreign Trade Corps.

The development of Hebei's products towards high added value The current bargaining power of enterprises is relatively weak, and it will take time to improve the product export structure. Luo Baihui said that at present, foreign customers of domestic enterprises are concentrated in emerging markets such as Southeast Asia, and the difficulties and risks of expanding markets in Europe and the United States are too great. On the other hand, product prices are quite comparable at home and abroad, so it is also necessary to actively explore the domestic market.

Gaisheng Nan, manager of Hebei Minmetals Imp. & Exp. Co., Ltd., stated that under the background of rising raw material prices, labor shortage, and increasingly stringent national policies for energy conservation and emission reduction, the foreign trade situation as a high-energy-consuming enterprise is not optimistic. He frankly stated that the old development model has been difficult to sustain and that the current production of products will work towards high added value. At the same time, the company visits overseas every year to meet customers, and formulate production market plans according to the needs of customers.

Shandong Linyi hardware manufacturing output value or over 12 billion Linyi City hardware manufacturing industry has a long history, early in the production of scissors, hammers, sanding famous. According to Luo Baihui from Linyi City, Shandong Province, the letter by the Committee and the Hedong District Economic and Trade Bureau understands that in 2012 the Linfen City hardware manufacturing industry cumulative development of large-scale enterprises will reach more than 60, achieve output value of over 12 billion yuan, an average annual growth of more than 30%, full force Build China's hardware machinery processing base. At present, Hedong District hardware manufacturing industry has developed to 590, nearly 20,000 employees, was awarded the "China Hardware Industry and Trade City" honorary title by the Chinese Hardware Product Processing Association. In the next step, Linyi City will regard the development of the brand economy as an important starting point for the optimization and upgrading of the industrial structure and encourage companies to create their own brands. Take the cultivation and development of characteristic industrial clusters as the main form of regional industrial development, plan well according to local conditions, and focus on planning nine towns of Jiuqu, Xianggong, Fenghuangling and Taiping, and plan for Jiuqu Gaozhuang, Xianggongxi Shenyang, and Fenghuanglingshan. Taiping large Xuzhai and other industrial parks.

Some hardware and plastic companies that started to adjust their structure and plastic brands at an earlier time have already started to pay off. According to Zhang Xinyun, the trade manager of Shandong Shenli Rigging Co., Ltd., the company attaches importance to the optimization and upgrading of product export structure, continuously eliminates low-end products, and develops new products based on its own technical team. The product quality is in the upper reaches of the international market, and the brand is recognized by European and American consumers. The overall competitiveness is relatively strong. Zhang Xinyun said that his company wins with quality and does not fight price war. Although the price is high, it does not affect the transaction amount. He disclosed that the company’s export volume in the first quarter of the year was as high as 90 million yuan***, a 60% increase compared to the same period last year, and the profit was also considerable. This year's foreign trade quota target is 360 million yuan***.

The surprising opportunity for Chinese companies to meet the 10-year opportunity period is that the business opportunities in the Japanese market, which were thought to have been “shocked” by the earthquake, have not risen or risen. There were 1,239 Japanese buyers in the two days before the opening ceremony. The same period grew by 16.89%. Among them, the Canton Fair’s large-scale multinational procurement recommendation meeting ushered in the first TRIAL, a procurement company from Japan. This large-scale supermarket chain, which ranks among the top sales in Japan, sent a procurement team of about 100 people. The purchase amount is expected to reach 3 million U.S. dollars. According to the company’s overseas development, it is said that at present, Japan’s domestic supplies are in short supply and demand is extremely high, and future purchases will only increase and will not decrease. "Especially in the next six months, with the redevelopment, our procurement scale will be greatly improved."

"There are too many commodities needed after the earthquake in Japan." Arakawa Chunchi, head of the company's China office, said: "Japan's post-earthquake reconstruction has only just begun. The growth in demand for various commodities, especially building materials, will last at least 5-10. year."

Japan's Gangnam Trading Co., Ltd. is famous for DIY construction hardware supermarkets in Japan. After this earthquake, its business grew at least 10%. "In the same period, only our family alone has purchased at least 30 million yen, of which about 90% is from China." Arakawa Haruko said that after the earthquake in Japan, the sales volume of poplar plywood even turned up one hundred times. . ”

According to Arakawa Haruki, it is not just the earthquake that caused Japan's retail companies to enter Chinese procurement. In fact, after the global financial crisis, the share of retailers’ direct purchases has been constantly increasing. It is true that various types of Japanese retailers, such as the Quixote and Trial at the Canton Fair, have all come to China for gold rushing. High-quality and inexpensive Chinese goods have great advantages. "We hope that the proportion of sales of direct imports will increase from 30% to 50% in the near future, reaching a level of 1.5 billion U.S. dollars. The vast majority of these goods will also come from China," said Arakawa Haruko.

Since Japan’s multinational procurement giants have shown great enthusiasm for purchasing Chinese products, for foreign trade companies in China, what they need to make clear first is: What products do Japan need most at present? What issues need to pay attention to exports to Japan?

Delivery time is more important than price "At present, Japan's most urgent need for blankets, flashlights, batteries, food, etc., these materials will be our focus of procurement of the Canton Fair." TRIAL overseas development charge told reporters. In particular, he emphasized that in view of the shortage of goods in Japan, more consideration is given to the delivery time at the time of purchase, and the price has become secondary. “Although some orders were previously suspended in China, the delay in delivery due to transportation problems was not cancelled.”

Zhu Qiumei, head of the Don Quixote Corporation of Japan, expressed the same view. He said that at present, orders for some ordinary small appliances may be cancelled, but the amount of daily necessities purchased will increase. “As solar flashlights, emergency lights and other items are urgently needed in Japan, we need a lot of procurement in the near future.” said Zhu Qiumei.

Yao Wenping, vice president of the China Chamber of Commerce and Industry, also told reporters that according to a survey conducted by the Electrical and Mechanical Chamber of Commerce at the Canton Fair, a substantial portion of orders from Japan are currently cancelled, but at the same time, domestic diesel generators, water pumps, solar flashlights, and electric Japanese orders for bicycles, hardware products and other categories are very strong.

The reporter also learned that Japanese buyers, who have always been extremely demanding on the quality of their products, have been considerably relaxed in their quality standards (especially for disaster relief materials) in light of the current shortage of materials.

Chinese products meet Japanese standards. Reporters discovered during the visit that many companies are aware of the opportunities brought about by the Japanese earthquake, but they are not familiar with Japanese standards. “We don’t want to do it. The key is not to understand the market and access standards. All do not know." A number of hardware suppliers told reporters.

"A lot of companies' products are very good, but they do not meet the Japanese standards." Arakawa Haruko told reporters.

A buyer also told reporters that many of the products of Chinese companies have fully met the quality standards, but there is a lack of understanding of Japanese standards. “But it does not matter, we still have 1 year preparation time, the reconstruction of Japan has only just started, I believe at least to last 5 to 10 years, this is a rare opportunity period for the majority of companies.” Arakawa Chunzi said.

However, many companies are already gearing up and are planning to use the opportunity of Japan’s reconstruction to enter the Japanese market. Chongqing Maxim Group is a leading company in the domestic construction industry. The group's vice president, Yoshihide, stated that after the earthquake in Japan, the company had started to develop products for the earthquake area in Japan.

The continuous escalation of Libya's ** led to a sharp rise in crude oil prices. WTI rose from US$84.32/tonne (closed on February 14) to US$112.79/barrel (closed on April 8th), with an increase of 33.8% in less than two months. The cost of goods has risen significantly; however, the domestic PP market has experienced a difficult recovery. Compared with the increase in crude oil prices over the same period, the increase in domestic wire drawing materials is only 4.5%.

From the supply point of view, Yanshan Petrochemical, which was originally scheduled to stop for maintenance in April, postponed the inspection and repair time to the 7th to August quarter of the third quarter. So far, the production capacity of the shutdown and overhaul devices has not been large (see the table below), and the impact on the overall PP supply has been affected. Smaller; it is also worth noting that the newly added 300,000 t/y PP plant in Sanyuan, Shaoxing, was originally scheduled to be put into production in April, but considering the price hike in propylene monomer, it remains to be seen whether the device can be put into operation smoothly; on the import side: From March to March, several sets of production facilities in Korea were overhauled. At the same time, the scarcity of propylene monomer also made some PP units have to reduce the operating rate. The supply of PP in Asia has tightened, the situation in the Middle East has been tense, or it has affected the resources from the Middle East. On the whole, although there is little pressure from imports, the supply of domestically produced materials is still abundant.