Chapter 33 8. Industrial materials and equipment industry - the king of the manufacturing industry wandering forward

We have to make a pessimistic estimate. In the next ten years, China's industrial materials and equipment industry will not simply disappear or encounter large-scale failures, but the problems are also enough to make it fall into trouble. This sense of urgency is becoming clearer with the layout of the industry. In the next ten years, if one or two companies in China's industrial materials and equipment industry can successfully complete large-scale operations and industrial integration, then their development prospects still deserve our attention given China's unique situation.

Introduction to the theme: Industry within industry - Separation and integration of an industry For many people, the industrial materials and equipment industry is a very unfamiliar concept. The reason for this is that this industry has little direct relationship with our lives, but if this industry disappears from the world, the impact on us is unpredictable. The core content of the so-called industrial equipment industry is to manufacture necessary materials and equipment for other enterprises, which means that it is the upstream of almost all industries, and it is also the "engine" of a country's industrialization and modernization, and it is a well-deserved manufacturing King of business.

Although this industry is the leading industry in industrialized or post-industrialized countries, its proportion in China's manufacturing industry only accounts for a pitiful 30%, which is not only far lower than the proportion of developed countries in Europe and the United States. It is even inferior to India, which is also a developing country, and this is also the reason why we are unfamiliar with it. Whether we are familiar with it or not, this industry has existed in this world for many years. However, although this industry has a long history, its profit model is as simple as the newly established industry.

For this industry, there are very few competitive advantages that can be developed. The main reason is that a large part of the products produced by this industry are raw materials to be used. Therefore, if you want to create lasting competition in this field Advantages, there is only one way to continue to reduce costs. So we can see that in the past ten years, many industrial materials companies in China have tried to keep their costs down to the greatest extent. The cost will be lower than that of competitors. One of the most typical examples occurs in the coal chemical industry all over the west of China. Due to the adoption of the business model of blooming everywhere and the most primitive production conditions, these enterprises can increase prices less than state-owned competitors and obtain higher profits. In an industry, if there are no policy protection measures, after long-term efforts, these low-cost enterprises are enough to drive those inefficient producers out of the market and allow the market to be consolidated to the greatest extent.

However, the actual situation is not as optimistic as we described, because there are not too high barriers to entry in this industry, which allows many investors to enter the industry, resulting in excessive prices Competition, which makes many businesses in the industry, only able to earn very low profits. In addition, since the industry has entered a mature stage, there is not much room for growth, so the only way to improve the return on profitability is to invest more in technology to improve production efficiency. It is precisely the existence of this point that makes the majority of Chinese enterprises unsustainable.

It is a well-known fact that innovation is not an easy job. Even in world-class large enterprises with strong technological advantages, the failure rate of their R&D projects is quite high, and our shortcoming is precisely the lack of sufficient technology reserves. Therefore, we have to make a pessimistic estimate. In the next ten years, China's industrial materials and equipment industry will not simply disappear or encounter large-scale failures, but the problems are also enough to make it fall into trouble. Looking at the pattern distribution of the whole industry, this sense of urgency becomes more and more clear.

Looking at the current industry, its market conditions have bid farewell to the old era of separatist regimes. In the past ten years, the continuous industrial reshuffle and industrial integration have made this industry a trend of oligopoly. In the process of fighting against being eaten, merging and being merged, all enterprises have no choice—either to acquire others, or to be acquired by others. When we change our perspective and observe this industry from the perspective of the market, You will find that in the next 10 years, there are two factors that will determine the success or failure of an enterprise.

These two factors are - scale, integration. Let’s talk about the former first. For customers in the industrial equipment industry, with the further improvement of the industrialization process and the intensification of production gradually becoming an inevitable trend in the manufacturing industry, the requirements for equipment must also tend to be stable for the entire system. And efficiency, and only when the enterprise forms a large-scale production, can it be possible to meet this standard. Secondly, product integration is also the kingly way of future development. In the industrial equipment industry, the era of subdividing products and leading the way has quietly passed away. For the market, the customer's demand is to allow multiple links and multiple systems of equipment to be perfectly connected together. This is the future. Therefore, regardless of whether these enterprises are willing or not, and regardless of whether they are active or passive, they will eventually form a situation of intra-enterprise integration and inter-enterprise merger.

Although such a situation is bleak, it does not represent a bleak prospect. In the next ten years, if one or two companies in China's industrial materials and equipment industry can successfully complete large-scale operations and industrial integration, then with China's unique However, its development prospects still deserve our attention. Under the premise of the transfer of manufacturing industries in developed countries, China's manufacturing industry has obtained many opportunities that it has never had before. This shows that the manufacturing industry has already surpassed the content of an industry itself, and the industrial materials and equipment industry, which is located in the upper reaches of the manufacturing industry, is shrouded in brilliance representing strength, which cannot but make people dazzled and daydreamed no matter what.