At present,more than 30 valve enterprises have been listed in China.According to the disclosed annual report,there are 18 large-scale enterprises which account of sale is more than 100 million RMB,account for 60% of the total.There are 10 enterprises in positive growth sales,account for 33% of the total.There are 20 enterprises in nagative growth sales,account for 67% of the total.In terms of net profit growth,eleven of them are in positive net profit growth, accounting for 37%, another 19 companies in negative growth, account for 63%.
In terms of the whole industry,the annual sales of Chinese valves is nearly 300 billion,but the profit is only more than 16 billion, the profit margin is only about 5.3%.And our country imports valve more than 16 billion every year,its profit has more than 8 billion,the profit margin is reached 50%, the gap is obvious.The market is expanding,but valve companies have not gained more benefits from it.What is the reason for this? In the overall scale expansion market trend,how can we grasp new opportunities?
1,Current difficulties--The Limitation and Resistance from traditional industrial environment.
The increase of production cost leads to the decrease of profit.As a traditional manufacturing industry,It has certainly requirements on raw materials, labor, management efficiency of supply chain management,and belongs to the labor-intensive production mode,but it remains the high labor costs in recent years,especially the artificial wage does not match with technology level,and the relatively industrial chain of jiangsu and zhejiang area,the land management cost rapidly increased,that was directly impact on profits and development.
The lack of innovation slowed the promet globalization of valves enterprises.There is still a gap between the chinese manufacturer and the advanced international manufacturer,the technological basis,the innovation research alibity are relatively weak. As present,Chinese valve industry has always a disadvantage of the technical competition in the high-level market, so that in the whole industrial chain,domestic market are more inclined to import products.For example,some large-caliber high temperature and high pressure valves,high parameters,strong corrosion resistant and other high technology valves,have always been dependent on imports.At present,almost of chinese valve company are low level,small scale,small cottage and medium-sized industry,their funds and the technical ability is not enough to support them to research and development innovation,tend to cheap copy another products,rely on low price competition.The rate return of innovation is very low for most valve companies,which reduces the enthusiasm and motivation for innovation and quality improvement.
Low market concentration and weak brand influence.According to statistics,there are about 3000 valve manufacturers in China, the quantities ranks the first of the world.However,the total market share of the top 10 enterprises is only 8% to 9%,indicates the low market concentration and weak brand influence of domestic valve enterprises.That's why many enterprises adopt "PROFIT FOR MARKET" to win more market share place,it lead to form a vicious circle in industry competition,also result in the market environment of expansion but small profits.