Being "hated" is also a skill @ Conch Cement

According to China Cement Net, in the Guangdong market, China Resources Cement and " have been affected by the downward trend of the real estate industry this year. Domestic cement demand continues to be sluggish, and the price is running in the doldrums. Since the beginning of the year, the national cement price index CEMPI has fallen by 36.65, or 25. In terms of price, the national cement price has hit a new low in the past five years, and the cement price in East China has returned to the level of 2009. While the price

of

conch cement is falling, more and more voices in China begin to criticize conch cement, believing that conch cement has not played the responsibility of large enterprises. They should not seize market share in the downward period of the market.

In fact, in response to questions from investors, Conch Cement has made it clear that "in the later period, the company will continue to focus on market construction, implement policies according to time and situation, and strive to improve operating efficiency on the basis of stabilizing market share" . At the conference held by Conch Cement Hong Kong in

August, when talking about the problem of peak staggering production, Conch executives also said that in terms of business strategy, they supported peak staggering to maintain industry profits, but share was the bottom line, and they pursued the m aximization of enterprise benefits on the premise of ensuring market share. Give full play to the cost advantage of conch.

Judging from the performance of the first half of this year, Conch has indeed realized its strategic plan. On the evening of August

21, Conch Cement announced its semi-annual report for 2023, with operating income of 65.436 billion yuan, an increase of 16.28% over the same period last year; The net profit attributable to shareholders of listed companies was 6.468 billion yuan, down 34 from the same period last year.

Although the net profit declined by a large margin, it far outperformed the market , which was in sharp contrast to the 50% decline in profits of enterprises in the industry. The total profit of enterprises is 8.5 billion yuan. It accounts for 51% of the profits of the whole industry.

the outstanding performance in the first half of the year." It also shows the correctness of Conch strategy, at least for Conch Cement, "share is the foundation, profit is the purpose" is correct, as for other enterprises, from the perspective of Conch Cement, is it really important?

Being "hated" is also a kind of skill

. Conch cement is "hated" by a large number of enterprises in the industry and scolded by the industry, which just proves the strength of conch and the responsibility of conch cement to itself and investors.

When a person is good enough, it is inevitable to be "hated" by others, and the excellence of conch cement is reflected in many aspects.

The first natural thing to mention is the "T-shaped strategy" that Conch is proud of. To be honest, the more the market goes down, the more we can feel the uniqueness of the "T-shaped strategy".

Simply speaking, the horizontal of "T" represents the coast and the vertical represents the river. The T-shaped strategy refers to the construction of large, The Medium " T-Strategy "addresses three core issues. Namely: market, cost, inventory, and these three points are related to the survival of cement enterprises.

First of all, in economically developed coastal areas such as Jiangsu, Shanghai, Zhejiang and Fujian, cement consumption is strong, but the resource endowment is not as good as Anhui. Conch Cement has successfully integrated the eastern market and the resources along the Yangtze River through water transportation. While controlling the core market by using the grinding stations, transit depots and marketing departments widely distributed along the eastern coast, Conch Cement perceives market trends, coordinates sales scheduling, raises prices to increase efficiency when the demand is good, and reduces prices to stabilize the volume when the demand is poor, so as to firmly control the market initiative.

In terms of cost, Conch has a large number of high-quality and low-cost limestone resources along the Yangtze River, and has built a large number of large-scale clinker production bases. Combining with the technological advantages of the production side, Conch Cement can produce high-quality clinker at a very low cost by realizing the advantages of resources, scale and technology; In the transportation link, the way of Yangtze River + sea solves the problem of transportation cost; in the cement grinding link, it is close to the market, near the power plant, wharf and other supporting facilities, the market response is fast, and the cost of admixture is low.

Finally, inventory, cement needs continuous production, otherwise the kiln will be full. The advantages of "T-shaped strategy" have emerged again. Make use of the large clinker warehouse in the clinker base to increase the storage capacity; make use of the time difference of water transportation to disperse the inventory pressure; make use of the grinding stations and transit warehouses widely distributed in the coastal market to digest the inventory, which can be described as "interlocking, watertight".

If the "T-shaped strategy" provides wings for the strength of conch, then the high efficiency of management provides a strong "core" for conch. The standardization construction of Conch

Cement started very early, and it is a benchmark enterprise for the standardization construction of domestic cement enterprises, which greatly improves the production, operation and management efficiency of enterprises. There is a very interesting situation

in Conch Cement. All subsidiary leaders, even some middle-level leaders, will be deployed to other enterprises after staying in one enterprise for several years. The advantage of this is to prevent nepotism and other problems, which is very effective in ensuring the competitiveness of enterprises.

Thanks to excellent management, advanced equipment, cheap mines, good layout, ultra-low debt ratio and strong market control , "the world cement looks at China, China cement looks at conch", the strength of conch cement is worthy of the name.

Of course, from another point of view, conch also takes advantage of the industry. In the case of strict implementation of peak staggering production by enterprises in the industry, if Conch Cement does not stagger the peak, it is equivalent to not very decent to seize the original share of other enterprises. In addition, due to the inconsistency of peak-staggering production policies in provinces and cities across the country and the weak peak-staggering requirements in Anhui, a large number of production capacity of Conch Cement along the Yangtze River can be concentrated, which will also have a greater impact on other markets along the Yangtze River and coastal areas that implement peak-staggering production.

However, generally speaking, the author believes that being "hated" and "scolded" is also a kind of skill. Conch Cement has a cost advantage of more than 30 yuan/ton lower than industry average. Simply put, even if Conch Cement earns only 20 yuan per ton of cement, many domestic cement enterprises will fall into serious losses , and the cement production capacity of Conch Cement is 3.

In the context of knowing that the downward trend of the market is difficult to resist, should we choose to maintain "balance" and "make money in harmony", or should we earn less, guarantee our share and "kill" a group of competitors?