Recently, according to the announcement of the People's Court of Weiyang District of Xi'an City, the property of Shaanxi Qinling Cement Group Xi'an Co., Ltd. is insufficient to pay off the bankruptcy expenses, and there is no bankruptcy property available for distribution. After liquidation by the administrator, the assets of Shaanxi Qinling Cement Group Xi'an Co., Ltd. are insufficient to pay off the bankruptcy expenses.
In accordance with the relevant provisions, it shall adjudicate its bankruptcy and terminate the bankruptcy liquidation procedure.
Guangdong Province, declared the bankruptcy of Yunfu Cement Plant in Guangdong Province. The Court holds that, according to the existing evidence materials, Yunfu Cement Plant in Guangdong Province has been unable to pay off its debts due for a long time, and its asset-liability ratio has reached 243.
In June, the People's Court of Huili City, Liangshan Yi Autonomous Prefecture, Sichuan Province, announced that Huili Chuancheng Cement Company in Liangshan Prefecture was insolvent and had no possibility of restructuring and reconciliation. Meet the conditions for declaring bankruptcy. On June 26 , 2023, the Court decided to declare the bankruptcy of Liangshan Huili Chuancheng Cement Co., Ltd. Cement plants across the country will inevitably be involved in a life-and-death battle in the
future, so which enterprises are likely to survive?
From the perspective of population flow, the core one or two cities still have a stronger attraction for young people. The 10 cities with the largest population growth in 2022 are Changsha, Hangzhou, Hefei, Xi'an, Guiyang, Nanchang, Kunming, Wuhan, Zhengzhou and Qingdao, and the provincial capitals in the central and western regions are in the forefront of the growth.
2. Mining resources bring natural competitiveness differences
. Cement is a resource-consuming industry in the final analysis, so mining is considered to be the lifeline of cement enterprises.
In the past stage of rapid expansion of industry scale, there have been many enterprises with poor mine resources or even without their own mines in the industry. These enterprises are naturally inferior in the market competition, and it is difficult for them to survive under the background of the continuous downward trend of the follow-up market demand.
Of course, owning mine resources should also consider factors such as ore quality, ore cost, transportation distance and so on. The competitiveness of some enterprises with high ore cost and long transportation distance will also be limited.
3. Market coverage is particularly important
as a large industrial product, cement has always been a "short leg", so the regional characteristics are very obvious, but there is no lack of some special cases in the industry, relying on convenient transport conditions and freight transit resources, greatly expanding the scope of market radiation. The best of them include Conch, Oriental Hope and so on.
At that time, even if it does not make money, as long as it can guarantee cash flow, or "disgusting" (affect) competitors, it will be enough to laugh proudly in the face of the severe market situation.
4. Cost is the core
of winning competitive advantage. The core of market competition is always cost. There are many ways and channels for cement enterprises to reduce costs. In terms of
innate advantages, in addition to the mine conditions mentioned above, the size of the production line is as critical as the old and new. Usually, under the same conditions, the new production line has more competitive advantages than old production line, and the large production line has more competitive advantages than small production line.
The day after tomorrow, enterprises can reduce production costs in all aspects through continuous technological upgrading, reducing energy consumption, improving resource utilization, and reducing personnel input.
In recent years, domestic cement enterprises have also begun to try alternative fuels. Although this technology will adversely affect the working conditions and output of enterprises in the short term, it can effectively reduce carbon emissions in the long run. With the opening of the carbon emissions trading market, these enterprises using alternative fuels may have more advantages.
As for intelligent technology, domestic cement enterprises have started a lot of attempts, but the input-output ratio of some technologies is not good. Of course , from the perspective of the future, it will be the world of intelligent factories.
5. High asset-liability ratio will be very passive
. High asset-liability ratio not only means that enterprises need to bear high financial costs, but also means that enterprises lack confidence in market competition and are difficult to fight for a long time.
Taking some production lines put into operation in recent years as an example, although these production lines are not bad in terms of cost competitiveness, due to the debt construction line, the debt pressure of enterprises is high, and the liquidity requirements are high. In the market competition, on the one hand, in order to ensure cash flow, it is difficult to stop kilns and limit production synchronously with regional enterprises, which leads to the increase of market instability; on the other hand, in the low-price competition, it will also face the dilemma that the more it sells, the more it loses, and it is difficult to persist in long-term combat.
6. Environmental protection is a hard indicator
. Compared with the competitiveness of enterprises and other conditions, environmental protection requirements are hard indicators. Under the guidance of national policies, enterprises with low level of environmental protection governance not only face differences in policy support, but also may be shut down directly because of environmental protection problems.
However, it should be pointed out that the high cost of environmental protection in cement plants requires a large amount of capital. In the current market situation, enterprises also need to consider whether the investment is worthwhile. If the investment in environmental protection upgrading is too high, it will be difficult to recover the investment cost in a short time in the future. Then, shutting down the production line may be a good choice.
7. Don't put all your eggs in one basket
. The demand trend of the cement industry has been relatively clear for a long time. In recent years, many cement enterprises have begun to take sand and gravel aggregates, commercial mixing, new materials, environmental protection and other industries as breakthroughs , and have made good profits.
Taking Huaxin Cement as an example, in 2022, the aggregate business of Huaxin Cement realized a revenue of about 3.065 billion yuan, with a gross profit of 55. The annual output of aggregate was 99.8 million tons, an increase of 112.25% over the previous year; Huaxin Cement pointed out that with the Yangxin 100 million tons of machine-made sand and gravel project (Phase I), Zigui, Yichang, Quxian Phase II, Honghe and other 20 aggregate production lines put into operation successively, the company's aggregate production capacity has reached 2.
From the perspective of the development logic of foreign cement enterprises, most of them, including Lahao, are widely involved in upstream and downstream industries besides cement. It is believed that in the future, domestic cement enterprises, especially large cement enterprises, will strengthen the expansion of related industries.
Of course, "not putting eggs in one basket" also includes another dimension, that is, promoting overseas development strategy. However, attention needs to be paid to investment risks, especially geopolitics and local economic potential and stability.
Which enterprises can survive?
In addition, in view of the future economic development trend, the cement industry will inevitably enter the era of regional oligopoly in the future, eventually forming a regional core market divided by multiple enterprises, forming a balanced situation.
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