Expert Analysis of Cable Industry Integration Imperative

“China's wire and cable industry consolidation is imperative.” Zhang Wei, a senior expert in the international copper industry, said in the “macro-market analysis and copper-aluminum conductor research” theme report that the theme report was held in mid-March, 2013 • Made on the Technical Forum for the Development of the Wire and Cable Industry in Transition. During the meeting, he said that China's cable industry is the main force of copper consumption in China, and China's copper consumption in 2013 will increase by 6%-7%, which indicates that China's cable industry still has room for growth, on the other hand, It shows that there is no possibility of a substantial drop in the price of copper, and the cost of cable companies will not drop. Under this background, Chinese cable companies have entered 2013 with both opportunities and challenges.

opportunity:

1. Development of new energy markets: The “Twelfth Five-Year Plan” encourages the support of new energy construction. With the establishment of a large number of new energy projects such as nuclear power, photovoltaics, wind power, offshore wind power, special cables and submarine cables have ushered in new developments. opportunity;

2. Increase in the demand for cables from urban rail transit: In 2012, the National Development and Reform Commission approved rail transit construction plans for many cities across the country, with a total investment of over 800 billion yuan. The content of the approval involved 19 cities in the country, two regions and one line. The National Development and Reform Commission has intensively approved urban rail transit projects. The scale and investment are rare. It is reported that the wire and cable used in urban rail locomotives is mainly flame-retardant, which is determined by its safety and working environment. This provides a broad market for all types of flame-retardant wire and cable. The strong demand for rail transit has brought opportunities for the development of the wire and cable market;

3, electric cars and supporting: the country is encouraging the use of new energy vehicles, especially charging technology is more mature, but it has been greatly promoted. Therefore, the demand for charging station cables and automobile wiring harnesses will surely increase, which will strongly promote the development of automotive cables.

challenge:

1. Impact of macro adverse factors: Since the global financial crisis of 2007-2009, the world economy has not been able to recover fully. The growth rate of GDP in various countries has slowed down. Developed countries are returning to high-end manufacturing, and other developing countries are lower. The cost of competition for low-end manufacturing. The construction real estate industry, which is closely related to the cable industry, is even more severely injured. It is also the main direction for China to begin economic restructuring and accelerate the transformation of economic development methods. Focusing on improving the demand structure, optimizing the industrial structure, promoting regional coordinated development, and promoting urbanization, we will focus on solving major structural problems that constrain the sustainable and healthy economic development. The original industry is bound to be greatly impacted, and these industries must also include the cable industry;

2. Internal and external problems in the cable industry: China's cable companies are mixed, and many companies have insufficient production and management. As a result, the quality of their products is low, and they do not attach importance to scientific research and development. The average investment in R&D expenditure is less than 1% of sales. As a result, the cable market is full of low-price competition and disorderly competition, resulting in the phenomenon of “defective expulsion of good products”. On the other hand, high-end products such as aerospace rely mainly on imports, and the entry of foreign brands further weakens the Chinese line. Cable company's living space.

Therefore, Zhang Wei said: The integration of the cable industry is imperative. Only in this way will China's cable companies find a way out of the way.