“On the surface, the international financial crisis is a drag on the growth rate of the dye industry, and it is essentially an impact on the extensive development model that simply depends on capacity expansion.†Tian Liming, secretary general of China Dye Industry Association, held a post-crisis last week At the time of the International Staining Pigments Industry Forum. From the perspective of the current development of the dye industry, this impact has already been demonstrated in real terms - the industry's profit rate continues to be low.
High-value-added industries suffer from low profit margins
According to Wang Yu, director of the China Dyestuff Industry Association, the two major dyestuffs in China are reactive dyes and disperse dyes. Among them, the profitability of reactive dyes is particularly low, since the second half of 2008, the net profit of the company is only 3% to 5%. This is because the previous export of reactive dyes accounted for 30%. The continuous decline in foreign sales in the past two years has led to an excess of domestic production capacity, which has led to vicious competition among companies. At the moment, big companies may still be in for quite some time, and SMEs can't speak. Although the situation of disperse dyes is slightly better, the long-term trend is not optimistic.
Zhifeng Zhi, general manager of Zhejiang Longsheng Dyestuffs Chemical Co., Ltd., stated during the forum that due to the generally low profit margins, domestic dyestuff companies have been working hard in recent years. As a high-value-added, high-tech product, the profit of a dye with only a few points is not normal. This situation not only affects the development of the dyestuff industry itself, but also drags down the production, operation, and profitability of the upstream intermediate companies. As a result, the funds in the entire industry chain are tight, and investment in the company’s normal production safety and environmental governance is difficult to guarantee and may form A vicious circle.
Due to the high concentration of production of upstream intermediates, basically a few companies dominate the market supply. If accidents lead to production cuts or production suspension, they will directly impact the dye industry. Some time ago, there had been such a situation that an intermediate factory exploded and the raw material prices rose immediately, and the dye enterprises became passive. “What I am most worried about now is not the direction of the market, but the dyes industry chain is too fragile. Because the economy is in a recession, people are required to wear clothes. If there is a problem in the industry chain, it will impact the dye market in the whole country and even the world. Xiang Zhifeng said.
Tian Liming is also worried about this situation. He pointed out that product similarities, high-end shortages and bad prices are the main reasons for the low profitability of the dye industry. This situation must change. Dyestuffs were originally high-value-added, high-margin, high-price fine chemical products and played an important role in the development and expansion of many chemical multinational companies. However, in the past two years, the dye market is in a situation where production exceeds sales, leading to irrational competition among peers.
Strengthen market coordination and seek reasonable interests
Xiang Zhifeng stated that Longsheng, the leader in the dye industry, has tried to coordinate with several major dye companies in China in the past few years, hoping to change the situation of simple price warfare, and achieved certain results in the early days. , but in the end it failed to last because of conflicts of interest. Therefore, it is also necessary for the association to do more coordination among them, end the disorderly competition and promote industrial progress, and at the same time eliminate potential concerns in the downstream printing and dyeing industry in this regard.
Another company representative pointed out that the competition in the domestic dye market is often based on price, which is unfavorable to the development of the industry. Dye enterprise's technological innovation, new product development, energy saving and emission reduction, going out of the country, etc., all require corresponding capital investment, and it is naturally difficult to achieve without reasonable profits. He suggested that the association should join even the market coordination among leading dyestuff enterprises. It is best to set up a special coordination group and invite professionals from all sectors to join in and jointly promote the healthy development of the industry.
In response, Tian Liming made it clear that the added value, profitability, and price of dyes are now relatively low. This situation is certainly unreasonable and needs to be actively taken to end the situation. There is nothing wrong with the general direction of the industry's joint development, and the association is willing to play a coordinating role in it. However, there is an important premise that it is impossible to pursue profiteering by monopolization and then affect the interests of the downstream. The goal of the industry should be to strive for reasonable profit margins under costs and profits.
He said that the past two years of dyeing companies are really bad. In the first half of the year, the performance of some large companies improved, not because the overall space of the industry could be expanded, but the shutdown of some small companies released the market. On the whole, the downstream companies should have a certain level of affordability for dyestuff enterprises to increase their profit margins, because dye products account for a lower proportion of the downstream printing and dyeing industry's costs and a lower proportion in the apparel industry. It can be said that the dye industry has the basic conditions for improving profitability.
Structural adjustment industrial upgrading is fundamental
Wang Hao proposed that it is necessary to increase mergers and acquisitions among enterprises, take the path of group development, realize the compression and adjustment of excess capacity through industry reshuffling, increase the development of middle-to-high-end products, and expand profit margins by improving product quality. Enterprises need to communicate more information, strengthen the coordination and change the situation of disorderly competition; seize the opportunity of the international dye market to recover, although in the short term the developed countries have not yet emerged from the crisis, but the prospects are still worth the wait.
Tian Liming emphasized that we should speed up the creation of the world famous brand of Chinese dyes, establish a brand development plan, and reduce the scale of branded products. The brand effect can bring about significant economic benefits. In recent years, domestic enterprises have paid more attention to the brand effect, but the progress is not obvious enough. There are several products in reactive dyes that have become China's famous brands, but the number is still far from enough. Compared with the 60% of global production, China has too few brands.
Dye as a product with high added value and high technological content still has promising development prospects. In particular, the market demand for green products and branded products will continue to expand. It is necessary to strive to improve independent innovation capabilities and constantly develop new products and technologies with independent intellectual property rights. . "We must have confidence in raising profit margins. With everyone's common recognition and efforts, the dye industry is not far away from the era of high profit margins," Tian Liming said.