In recent years, the concentration of the ceramic industry has increased rapidly, and many enterprises with similar scale in the past few years have opened an order of magnitude gap in these two years. The boundary line of head, waist, bottom enterprise is increasingly clear, according to incomplete statistics, the production enterprise that disappears in the industry in recent three years is as many as hundreds, the mainstream brand of annual sales value of more than 300 million is reduced 80% or so, and this kind of differentiation trend not only cannot see an end, is accelerating ceaselessly even.
According to the new trend of national policy, this trend of accelerated differentiation and elimination is irreversible, which means that in the next few years, about half of the enterprises will be eliminated. There are two main ways to get out of business: one is to close the factory directly, and the outdated production capacity without transformation value is eliminated directly; The other is that the factory is still in use, but it is no longer operated by the original production enterprise, but is integrated by other enterprises in the way of merger, contract factory or contract line. The process of eliminating outdated production capacity and poorly run enterprises is bound to be accompanied by some pain or small shocks, but it is also beneficial to the healthy development of the industry in general.
Now there are a lot of ceramic enterprises originally in the survival, but not willing to completely quit, in order to maintain survival, even at lower than the reasonable cost of sales products. From the perspective of financial accounting, the cost price of an enterprise should take into account all kinds of expenses. However, if the sales price is lower than the reasonable cost price, only the cash flow of direct investment is calculated. As long as the cash balance is in surplus, the company dares to sell at a low price. And part of the cash surplus came from chronic arrears to suppliers.
As the national industrial policy and policy tightening of ceramic industry in different region, similar to kill these type of low cost management will be more and more unsustainable, tax, environmental protection is more and more standard and strict, fuel and power supply of basic resources such as the price also gradually implemented differently, especially carbon emissions targets of rigid constraints, is likely to be the last straw, This will begin to happen in 20022. The mass withdrawal of enterprises suffering from domestic and diplomatic difficulties will actually be more conducive to the sound development of the industry. In particular, after those disruptive enterprises are eliminated, the industry will achieve a new balance between supply and demand, greatly alleviating the adverse situation of serious oversupply, surviving pottery enterprises can regain control of pricing power to a certain extent. A more optimistic estimate is that in the next few years, the whole industry reduces half of production capacity and output, but the average price also doubled, then the overall output value of the industry is still basically unchanged, but the industry will be more standardized and healthy.
There is a big catalyst for increased industry concentration: capital. With the support of capital, the integration force of enterprises is greatly improved, which includes both introduction and withdrawal. This introduction and exit mechanism can make the leading enterprises bigger and stronger and accelerate the improvement of industry concentration.
Driven by capital means, the process of organizational evolution will accelerate a lot. On the one hand, capital provides a fairer, more convenient and more quantifiable way of interest exchange. Some old shareholders who cannot keep up with the pace of enterprise development can exit in the form of cash or shareholding, which can take into account the interests of all parties and avoid intensifying conflicts. On the other hand, the exit also means that the company can make room to introduce more talents that meet the development needs of the enterprise, especially professional technical personnel and management personnel from other fields. Capital can also promote a lot of horizontal integration and union, such as pottery enterprises and pan-home furnishing industry, merger and so on. Over the past year, the speed of mergers in the ceramic industry is very fast, such as Mona Lisa, Dongpeng, Eagle brand and other enterprises are a lot of action. Acquire the future will be more and more obvious, and this trend phenomenon will be more and more common, the head enterprise need to perfect the strategic layout and rapidly expanding scale, m&a is the way of the most fast and the cost is relatively low, in alone difficult business conditions, seller also have relatively strong cash out or back the desire of the great trees are good for nothing but shade, Because the parties involved in the merger have this need, it is easier to hit it off and industry concentration will increase at an extraordinary pace.
It is worth paying attention to that mergers and acquisitions between enterprises do not necessarily take the way of outright buyout, but are often more willing to adopt the holding merger, which is easier to achieve win-win in theory. The reason is very simple, because some enterprises still maintain their own competitive characteristics and local advantages, but it may be their own business elements are not sound, comprehensive strength is not strong, resulting in the overall development of the bottleneck, so they need to find a rely on, their competitive advantages grafted into a larger system. This kind of merger and acquisition is actually a kind of horizontal combination, no matter big or small, but they are not out of the game. In fact, they are co-existing in the form of unity and warmth. However, after all, the two parties have formed a relationship of control and controlled, so the business direction of the acquired party needs to obey the overall strategy of the controlling party.
What cannot be ignored is that the way of merger and acquisition with capital as the bond also has its negative effect. One is goal-directed. Capital tends to pursue high returns when entering the market. In this case, capital may take the direction of the enterprise. Mostly like to seek a tuyere, especially the capital and the other side of the tuyere is risk, so although capital will lead to greater resources integration including financing and the ability to resist risks, but capital leading enterprise, may be more likely to overestimate the enterprise has the capability of system, the management risk is usually not reduced, but more increase. Secondly, an enterprise has its own unique resources and ability endowment. It is certainly professional and skilled in the original scope, but it may not be matched with a new path and new target. Even successful enterprises in the industry also have such failure cases.
What’s more, given the industry’s trends in the past two years, quick success may be harder to achieve. Why is that? Because there is no experience to follow, regardless of the international situation, national policy, market competition pattern, technology, consumer demand, the great changes in thirty years before, good do have tried, the success has also succeeded, ceramic industry has replaced the track now, everyone in the lighting), the static cling to old no. The blind pursuit of innovation is not good, after the plan to move, do what one can, is the steady and progressive way.
From the development course of ceramic industry in recent years, the head enterprises to rapidly expand the volume is mainly to rely on engineering channels, especially to do mining. This unconventional mode of rapid expansion, simple and crude stimulation, although the short-term effect is obvious, but also the most likely to hurt itself, is actually unsustainable. DaTiLiang ceramic enterprises, I believe, want to do, but not obese, cannot excessive reliance on simple and brutal war channels, more practical ways of capital as the link do transverse joint and integrated delivery, to really improve the system capacity and service value, everybody all fit the market capacity in the field of ambition ambitions.
Predict a few changes that may occur in the concentration of ceramic industry.
The trend of rapid expansion through real estate acquisition will be significantly curbed, but b-end companies will continue to dominate. Because not only is the service system, channel system, brand qualification as well as the supply chain system and so on, the head brand has already formed the obvious advantage, even more importantly, the head enterprises in terms of cost is to reverse the previous disadvantage, because the head company is the industry most capable of doing new production line technological transformation, the new base, order and highly concentrated, Can strengthen the scale effect of production, quality stability and production management costs will also be reduced.
In addition, industry policy guidance in the increase of concentration of reversed transmission industry, under the more stringent industry policy, head companies tend to have more resources, qualifications and funds, including the capital, after the superposition of all kinds of favorable factors will further establish a cost advantage, and the backward enterprise want to maintain the original level of cost would be very difficult.
The improvement of industry concentration, monomer an enlargement of the scale, the most important breakthrough is the horizontal development, horizontal development barriers, especially need to break the boundaries and enterprises may be the most effective tools for the broken capital intervention, and play a leading role in the capital, with good capital strength, while avoiding the side effects of capital, the more likely to have to break the industry boundaries, It includes breaking some conservative ideas or rigid systems in the original enterprise, as well as some unspoken rules and so on.
Ceramic industry most like imitation, product imitation, channel imitation, management structure also like imitation. In organizational innovation, management innovation, ceramic enterprises have been relatively weak, but now have to adjust the stage.
One important reason is increased concentration, which has led to the creation of larger companies. It turns out that everyone is about the same, you live a very good life, I also passable. After the survival of the fittest, now the big are bigger, the strong are stronger, some small and weak will not survive. In addition, the catalytic effect of capital, the trend of industrial integration, including the relevant national policy orientation, and other factors are promoting the upgrading of enterprise organizations.
There will be many new requirements for organizational upgrading, such as market research and securities related departments are becoming more and more important. There are external public opinion control, public opinion understanding, before a simple terminal advertising is done, now many large companies will have public opinion control, because public opinion will have a greater impact on this kind of public company, more negative news will directly affect the operation.
And in terms of supply chain management, because there are many now in a rising enterprise has its own production capacity is insufficient, need to increase the proportion of outsourcing production capacity, in order to ensure quality of outsourcing and supply level, it is necessary to strengthen capacity control and layout, especially some adopts the envelope bag factory method, will ask partners in strict accordance with the enterprise’s own management requirements and quality standards, They will even directly send out teams to strengthen constraints, which need to strengthen the organizational capacity and talent team building of the enterprise. In the process of enterprise organization upgrading, talent is the most critical link. For a long time, the ceramic industry has been a relatively closed industry, the most professional talents may still come from Buddha pottery and pottery institute, two units known as the Huangpu of the ceramic industry, but the ceramic industry has developed for 30 years, and the first generation of ceramic people have to gradually withdraw or retire to the second stage. And now the organization of some ceramic enterprises is much larger than the original, facing a different competitive environment, need more professional talents in different fields, including those with cross-border experience, such as the Internet and home appliances, everyone in the field. Generally speaking, ceramic enterprises in addition to production technical personnel, other professional talents from other fields will be more and more obvious trend.
Another clear trend is that a large number of ceramic industry workers will quit, but not because of age, but because of the skills of the job.
One of the reasons is that as a large number of enterprises are eliminated, it means that a large number of employees will lose their original jobs, and they will face more fierce competition when they return to work. The only thing they can rely on is their job skills to keep pace with The Times and surpass those of their peers. The second reason is that the degree of automation in the ceramic industry is getting higher and higher in recent years. For example, robots carrying bricks and automatic packaging lines are becoming more and more popular. In fact, there are almost no people in the advanced factories demonstrated in Italy a few years ago. With the domestic artificial more and more expensive, more and more cheap machine, data chain, control technology is more and more advanced, the intelligent ceramic industry will also blowout development, machine to replace the trend of artificial is very obvious. Things are like rowing upstream, not to advance is to drop back. In the face of adapting to the new competitive situation, the excellent in the industry will pay more attention to training and learning. From the enterprise itself, there will be more emphasis on training, and targeted training. Through training, employees can better learn some new ideas, new knowledge, new models, new skills. From the perspective of individuals, those who can stay and even advance in the great changes of the industry in the future must be a group of people with learning awareness and learning ability. Self-charging, self-upgrading, I think will be the new trend in the industry.
Post time: Jan-07-2022