Where will the profit space disappear?

The year 2011 was the worst period for the Foshan ceramics business environment. The consequences of foreign anti-dumping and slowdown in domestic real estate growth caused a reduction in orders and sales. For the situation of the next year, a number of industry sources interviewed by the reporter said that due to the tight control of domestic real estate, sales of ceramics are not optimistic, and business may be more difficult than this year.

It is understood that some ceramic enterprises in Foshan have orders of more than 10 million yuan in foreign trade orders. According to the person in charge of the Asgargoff Ceramics, the “western cowboy” tile that the company launched has already received orders of tens of millions of euros, which is a big increase compared to last year. In addition, at the Tao Bo conference held in October, companies such as Andrew Building Materials, Wesson Ceramics, Jinyu Tiancheng Ceramics and Liangjian Ceramics all achieved over 10 million intentions.

Relative to foreign trade orders, it is difficult for enterprises to have accurate statistics on domestic sales next year. However, the responsible persons of brands such as Mona Lisa and New Pearl Ceramics believe that sales may be more difficult this year than this year.

Dai Yimin, chairman of the Foshan Ceramics Industry Association, also believes that the ceramic industry has entered the adjustment period due to the sluggish world economy, the effects of anti-dumping, and poor domestic sales caused by real estate regulation. “According to the current situation, the world’s anti-dumping force is continuously increasing. The central government will continue to increase regulation of the real estate industry. It is expected that the domestic ceramics industry market will still face various difficulties in sales in the next year or more.”

Of course, some companies are optimistic about the situation next year. Lin Wei, president of Eagle Ceramics, told reporters that although the local government "energy conservation and consumption reduction" and the market environment, Eagle Ceramics Heyuan production base has stopped a production line, "but I remain optimistic about the market next year, appropriate Warm clothing can help enterprises tide over the difficulties. Currently, the third and fourth tier cities are relatively less affected by the property market regulation policies. If the sales network is properly sank, a broader market can be developed.”

"Grassroots" pottery enterprises are even more "difficult to do" overcapacity. Inventory can be used for a whole year by a pottery company owner Liu Tao told reporters. In her impression, the wholesale center runs from morning to night, trucks from all over the country always keep She is busy loading and unloading goods, and she needs to keep selling to local bosses. However, from this year onwards, it has suddenly become quiet. "In the past few days, no one has come to the door, the production line at the factory has stopped, the warehouse has exploded, and workers have been on holiday." She said.

According to incomplete statistics, as of October 2011, the national ceramic production capacity has reached 7.5 billion square meters, which has exceeded the annual production capacity last year. The actual domestic annual demand is only about 4 billion square meters, "a serious excess capacity, the product can not sell out in the warehouse, inventory is saturated, can only stop production." Hongyu Group Co., Ltd. Marketing Director Wang Yong said.

He said: "The backlog of products may not be sold in 1 year next year. Next, there will be discounts, concessions, and other measures, and they will be sold at a loss." Yihua Ceramics Sanitary World on Jihua Road was once popular with Foshan. Wang's ceramics store, and into December, where the flow of people less and less. A salesperson at a store told the reporter that compared to the past, the store’s sales this year were half of what it used to be, and there was a lot of goods in the warehouse, and they had to sell 3.5% off some products with outdated models.

Product output range narrows Foshan is China's largest ceramic producing area. Since the beginning of this year, the market's slump has caused many business owners to use the phrase “business is hard to do and sales are not good” as a mantra.

Yesterday morning, the reporter saw in the Shagang Ceramics Warehouse and Wholesale Center A and B. The huge wholesale market was empty and there was no big truck. Many shopkeepers either bored their playing cards or chatted in groups and complained to each other. The bleak business. “There have been a lot of trucks that have come here to wholesale ceramic products, and sometimes they can't get to the road, but now the road is smooth,” said one business owner.

Liu Tao told reporters: "Originally we have a dominant price, and our customers are many in Guangxi, Hunan, and Hubei. Now these places have their own production lines, and they don't need to spend money on road and oil to get goods from Foshan. This also greatly weakens Foshan. The output range of ceramic products. Now that the products cannot be sold, the funds are all put in the warehouse. Many companies that run businesses must have only one way, that is, they will stop production, otherwise the capital will not be able to turn around."

Liu Tao also worried that even if there is capital turnover, the products produced will face the situation of no local resettlement. According to reports, the reasonable range of inventory is 20% to 30%. However, the inventory of many companies has exceeded this range. According to the industry's general statement, the ceramics company's product inventory cycle is normal from 30 days to 45 days, 45 days to 60 days for the adjustment period, and more than 60 days, the manufacturers will face the risk of collapse. According to incomplete statistics, at present in the Foshan ceramics production area, there are not many companies that have a product inventory cycle of more than 60 days.

What is the fate of the “privately-run factory” after the profit space disappears after such a quiet period? “Now there are too many companies in production lines across the country, and our core strength in price warfare has now bottomed out. If we fail to do so, we will fail and soon die.” During the interview, many companies The bosses all lamented that the products of grassroots ceramics factories now have serious homogenization, which has led to a fiercer price war and a dismal market.

Tao Wei, a senior person in the pottery industry, believes that after the recession this year, enterprises will make some adjustments to change the pattern in the next year. For example, to establish a production-oriented factory, to transform itself from a privately-owned factory into an all-round model, such as an entire line of production, sales, and service, to establish and consolidate its core strengths and comprehensive capabilities; in addition, a group of uncompetitive “private- The factory gradually faded out of the arena and was eliminated.

Wang Yong also believes that the local “privately throwing factories” will become increasingly difficult because the major sales regions have their own companies, and with the introduction of policies such as the promotion of government industries, their profit margins are shrinking. "A brick is a profit of 0.5 yuan to 1 yuan, and now this profit is almost gone." He said.

Prediction: The living space will shrink in the face of tremendous pressure. The first to stand still is definitely the enterprise. According to industry insiders, many ceramic companies started to offer promotions after August to boost sales. But most tile dealers believe that price wars are not the root of the solution. Wang Yong believes that the severe situation will eliminate some of the companies, the "privately throwing factories" will greatly reduce their living space, their proportion in the Foshan ceramics industry will also decline; some small businesses will have to be transferred to other places. In general, "this will be beneficial to the sound development of the industry."