As an important basic supporting industry for China's economic construction, manufacturing is widely used in all areas of the national economy, and accounts for a quarter of the output value of the Chinese electrical industry, which has exceeded a trillion yuan in terms of output value. It is the industry with the largest output value in more than 20 subdivided industries in the electrical machinery and equipment manufacturing industry.
With the deepening of the 13th Five-Year Plan and the Belt and Road Strategy, China's cable and cable industry will usher in new opportunities, and the wire and cable industry will continue to improve in the long run. In the face of huge historical opportunities, Chinese cable companies have also grasped the layout and walked out of different strategic paths.
The future is in sight
With the start of major projects such as smart power grids, the significant increase in investment in clean energy construction, the investment in track construction, and the gradual upgrading of domestic industry technology, import substitution has continued to expand. It is expected that the future market size of the power transmission and distribution industry will increase by 15 % -20 % annually, and the sales volume is expected to exceed 6 trillion by 2023. In the future, China's wire and cable industry has a bright future:
First, the market demand is vast, and the industry has a large space for development. In the next five years, urbanization in China will still be in a rapid development stage. High-voltage and ultra-high-voltage power cable markets, railways and urban rail transit areas are in strong demand. Wide market space, there are opportunities for domestic cable enterprises to bring great opportunities for transformation and upgrading.
Second, technology research and development has continued to improve, helping to break the high-end barrier in the industry: With the "Made in China 2025", consumer upgrades, and the demand for cable supporting industries in the downstream industry, leading companies in the industry have already increased R&D investment and improved R&D systems. Technological innovation has strengthened its core competitive strength, gradually eliminated backward production capacity and achieved industrial restructuring, thus promoting the overall technological upgrading of the industry.
For example, as early as 2009, the "500 kV ultra-high voltage cable and nuclear power cable project" with a total investment of 500 million yuan was launched. The project was put into operation in April 2013 and the production capacity reached 5 billion yuan. At the same time, in view of the current situation of China's aluminum rich and poor copper and the International Development trend of aluminum alloy cable products, the Gold Cup Electrician has developed the "Environmental Protection High-Performance Rare Earth Aluminum Aluminum Aluminum Cable" project with a total investment of 140 million. In 2015, The new aluminum alloy cable developed by the gold cup electrician and other leaders has been designated as the latest national standard for the cable industry.
Third, new trends in development will provide new growth points for the industry: the upgrading of the industrial structure of the cable industry and the development of emerging industries. New trends such as green environment protection, low-carbon energy conservation, intelligentization, and interconnectivity will provide new growth points for the cable industry.
Development-oriented, three major challenges to break through
However, needless to say, as a new China after the founding of the basic industry, the cable industry is still facing many challenges.
Challenge 1: The domestic industrial concentration is low, and the product and technology trend is serious: At present, the concentration of the cable and cable industry in China is extremely low. According to data, domestic cable production enterprises are mostly small and medium-sized enterprises, accounting for more than 95 % of the total. The top 10 companies account for only 7 % to 10 % of the domestic market share, which is much lower than the 70 % in the United States, showing a highly differentiated competitive pattern.
Many small and medium-sized enterprises, due to their weak technological power and insufficient capacity for independent innovation, have serious convergences in product categories and technologies, lack core competitiveness, and form industry homogenization competition, resulting in low overall economic benefits for the industry. Overcapacity and excessive market competition are exacerbated.
The second challenge: structural development is unbalanced, and there are barriers in the high-end area: In the cable industry, foreign companies such as Nexen, Sumitomo, Furukawa and other international giants, with their own financial and technical advantages, control the high-end market and maintain a high share. Most domestic cable companies are concentrated in low-end markets with low profit margins.
Compared with large international cable companies, domestic cable companies are still weak in high-end cable research and development. For high-tech and value-added products with high technical requirements, high thresholds, and strong financial support, the domestic cable industry has not formed a batch of products. For example, in the field of high-voltage, ultra-high(special) high-voltage cross-linked cables, the 500 kV and above cross-linked cables are currently mainly dependent on imports and are provided by leading domestic large cable companies.
Challenge 3: The market environment is complex and the image of the company is weak: The cable industry in China, in the context of rapid economic development, the market growth rate is too fast, extensive development, weak technical strength and other factors, resulting in complex and chaotic market environment of the industry. In addition to the high cost of cable production raw materials, high price fluctuations, and the quality problems that have occurred one after another, the image of cable companies has a negative impact.
Scale OR specialization, cable giant busy transformation
Opportunities and challenges coexist, for the Chinese cable giant, a decisive victory over the future is a comprehensive ability to contest, and the determination and then move, the situation under a good strategic game of chess is crucial.
This point from the development of cable enterprises in Europe and the United States can draw lessons. Compared with the Chinese cable industry, the development of cable companies in Europe and the United States started earlier. Looking at the development history of its industry, it basically experienced three major stages of development: early rapid development, large-scale expansion, specialization, and large-scale upgrading. At present, the development direction of European and American cable companies is basically the two major paths of specialization and scale.
Focus on specialization such as Nexson, take the lead in the layout of high-end special markets, expand high-tech requirements products, and transform into professional cable production and service providers; Large-scale expansion such as Pirelli, fully launched the acquisition, by 2001, Piruili owned 75 cable factories, distributed in 24 countries.
With reference to the development direction of cable companies in Europe and the United States, a comprehensive analysis shows that the possible development path of cable companies in China is:
In-depth specialization: increase technology research and development, enhance technical strength, quickly break through the dilemma of homogeneity in the domestic cable industry, break through to the high-end market, and strengthen the core competitiveness of the company;
Scale expansion: through the acquisition and reorganization of enterprises, the concentration of domestic cable industry is increased, and the production costs are reduced and production efficiency is improved through scale economy and resource integration. Optimize the industrial structure and eventually promote the upgrading of the industry.
According to the industrial chain layout of domestic cable listed companies, the domestic cable giant is to choose the path of specialization and scale to complete the transformation and development of the company:
Far East Cable:
Around the main industry cable industry, the business is positioned as a "global energy efficiency management expert." At the same time, it also strives to create five major business sectors: wire and cable, buying and selling Baobao Network Technology, EPC, smart systems and energy management, and attacks global leaders.
Gold cup electrician:
Gold cup electricians set their development strategy as a "one main and two wings" route, that is, the cable industry is the main industry, supplemented by new energy vehicles and cold chain logistics industries.
Deep plowing cable industry: Gold Cup two-pronged, on the one hand, industrial extension, involving wind power equipment, power transmission equipment and other areas; On the one hand, it is technological innovation, focusing on ultra-high voltage cables, special cables, etc., to seize the technical commanding heights, continuously increase R&D investment, and maintain the core competitiveness and continuous advantages of the company; At the same time, the market takes root, build a gold cup home decoration service limited company, become a water and electricity decoration system solution service provider. Stepping up the vertical extension of the cable industry.
Building Flank Industries: We have strengthened the top-level strategic design of technological innovation, grasped the opportunity of the country to revitalize emerging industries, and built a new energy vehicle development path with the strategic positioning of "core component manufacturing + new energy vehicle operation". And "warehouse + distribution + marketing" warehouse distribution integrated cold chain ecosystem.
At present, the main business of gold cup electrician wires and cables has steadily increased, and the new energy automotive field has initially formed an industrial development pattern of "new energy vehicle core parts + car operation + charging facility operation"; The cold chain logistics business is also steadily advancing. The main project of the Yunleng Smart Cold Chain Logistics Integrated Service Center has been capped, and it is expected to contribute benefits in 2018.