Zhuge Wenda: Large Enterprises Should Lead the Orderly Development of the Industry

According to the market data of China Cement Network, the average price of P.O42.5 bulk cement in China last week was 374.09 yuan/ton, down 1.80% from the previous month. Since

this year, the cement market has been in a downturn, and the real estate market has not recovered as expected, which has led to the "low peak season" of the cement market, which is deeply tied up with it. After the end of the national cement peak staggering kiln shutdown and the collective opening of the production line, the fierce contradiction between supply and demand has led to the "bankruptcy" of cement prices in many parts of the country, and the volume of cement out of the warehouse has been declining. Zhuge Wenda, chairman of

Hubei Century Xinfeng Leishan Cement , was interviewed

by China Cement Network. Zhuge Wenda, chairman of Hubei Century Xinfeng Leishan Cement, pointed out that under the current steady growth situation. Large enterprises are more inclined to pursue the growth of output value, tax revenue and profit through the growth of sales, and price reduction seems to be the "best choice" to seize market share. However, in fact, the market demand is shrinking, which may lead to a slight increase in the sales of enterprises, but the price of cement has fallen sharply, and the efficiency of enterprises has also declined. According to the current situation, it is likely to cause losses in the whole industry.

Due to the considerable revenue of major cement enterprises in recent years, it is a common mentality to think that they have "the power of World War I" in the face of price war. Large enterprises want to stabilize their market share through price war, but in the long run, they still need to seek reasonable profits, and the final result of price war is only a lose-lose situation. The demand for

cement is rigid, and cement is necessary at different stages of development in a country. The only difference is that the demand is large and small. Ensuring the orderly and stable existence of the cement industry is the most important.

Zhuge Wenda said that reducing production capacity is an important measure to improve the cement market environment. Large enterprises should play a leading role in reducing production capacity. For example, if some enterprises want to withdraw from the cement market, large enterprises can jointly acquire these enterprises, and then dismantle their production lines directly. The remaining enterprises in the region will share the resulting costs, and the resources of the whole cement market will continue to be optimized.

Zhuge Wenda believes that in the near future, China's annual cement demand will fall to less than 1 billion tons. Cement enterprises should actively seek transformation, relying solely on a single technological innovation and market competition can not make cement enterprises survive, monopoly of the market and vicious competition are not the "way to break the situation".

Large enterprises occupy a dominant position in the industry, and every move will have an impact on the industry structure. Large enterprises should make correct decisions to give full play to the value of resources and lead the orderly development of the industry.

At present, the downward trend of cement demand is prominent, energy prices remain high, costs remain high for a long time, and profit compression has become the norm. Improving energy efficiency and reducing cost pressure have become the key breakthrough points for cement enterprises to enhance their comprehensive strength and market competitiveness.   

China Cement Network will hold the "2023 China Cement Energy Conservation and New Energy Development Conference" in Chongqing on July 6-7, 2023. Explore new ways of energy saving and consumption reduction in cement industry.

After the meeting, we will visit Oriental Hope Chongqing Cement .