Famous experts and experts gathered to express their views from different perspectives. China Cement Network recently opened a column entitled "Talking about Cement Cold and Warm", interviewing many enterprise leaders and industry experts in the cement industry. He Kunhuang, general manager of Tapai Group, was invited in this issue. He Kunhuang, general manager
of Tapai Group (data map)
, is affected by factors such as insufficient market demand and intensified contradiction between supply and demand. The current cement industry as a whole presents the operational characteristics of "weakening demand, high storage and low price, and declining efficiency". Under the severe situation, cement enterprises have been tested, and most of them have experienced different degrees of profit decline and loss. How can
cement industry get out of the current predicament? What will the future development be like? He Kunhuang shared his views with us.
First, what is the reason why the overcapacity of the industry is still serious?
In the past ten years, although the cement industry has continuously increased the speed of eliminating backward production capacity and low competitiveness, and through various attempts to alleviate the contradiction of excess capacity, the problem of excess capacity has not been fundamentally solved. Personally, I think the main reasons are as follows:
First, in the context of steady economic growth in the past, the real estate industry ushered in a wave of development boom. As one of the "troikas" driving cement demand, the prosperity of the real estate industry has strongly supported the domestic cement market demand, with its market share reaching about 35%. In some regional cement markets, the proportion even reaches about 50%. In order to meet the market demand, production lines and production capacity are increasing. According to the big data of China Cement Network, the number of production lines above 4500 t/d in China reached 676 in 2021, an increase of 51 compared with 2015, and the proportion increased from 35.86% in 2015 to 41.25% in 2021. In 2021, the national cement production capacity exceeded 3.5 billion tons, and the cement output was only 2.36 billion tons.
Secondly, some local governments lack reasonable layout and effective control over the development of the cement industry. Driven by the previous strong market demand and huge gross profit per ton, they blindly increase production capacity without considering the market capacity, hoping to continuously increase production capacity to drive economic growth, resulting in an increase in cement production capacity instead of a decrease. According to incomplete statistics, in the past five years, the newly increased capacity in Guangxi is the largest, reaching 24.18 million tons/year, accounting for 20.9% of the total newly increased capacity; the second is Guizhou, with 14.849 million tons/year, accounting for 12.8% of the total newly increased capacity.
Third, although the policy side has increased its efforts to reduce and replace capacity year by year, in fact, in the process of capacity replacement, many "zombie capacity" has revived and has been replaced as effective capacity. In addition, some cement plants "build small and large" or increase production wantonly by expanding kiln diameter transformation, resulting in the increasingly serious situation of overcapacity in the cement industry.
2. How can cement industry get out of the current predicament?
From the perspective of the industry, it is necessary to strictly implement peak staggering production. The leading role of leading enterprises and large enterprises and the leading role of the market are the "anchor" for the high-quality development of the industry, leading the industry to a development path of orderly competition, stable prices, full of vitality and healthy operation. Under the background of serious overcapacity and overall downward demand in the industry, it is suggested that we should continue to play the role of organization and coordination of industry associations and the leading role of large enterprises, adhere to the supply-side structural reform as the main line, and firmly promote peak staggering production and self-discipline production restriction. Large enterprises take the lead in implementing the requirements of peak staggering production, small and medium-sized enterprises actively integrate into the overall development of the industry, strengthen industry self-discipline, and work together to create a good industry ecology and orderly competition and cooperation relationship.
In a word, in order to highlight the tight encirclement of the current industry, we should realize that this is not a matter of overnight, nor a matter of one place and one enterprise, but a collective consciousness to work together. It is believed that as long as we regain consensus, regroup, enhance confidence, move forward steadily and jointly promote the transformation and upgrading of the industry, the cement industry will surely achieve a new round of high-quality development.
As far as enterprises themselves are concerned, they should accelerate the transformation of green intelligence. Green intelligence is the only way for sustainable development of cement industry. Enterprises should actively promote technological transformation and equipment upgrading, actively introduce new products and equipment, vigorously promote the green low-carbon transformation and digital intelligent upgrading of traditional cement industry, build green mines and digital mines, build green factories and intelligent factories, and promote the development of traditional cement industry. Construction of cement kiln co-processing solid waste project and resource comprehensive utilization project, construction of information control and management system for the whole process of cement production, etc., to enable enterprises to develop with high quality through greening, digitalization, intellectualization and informatization, and to form an economical, efficient and green industrial structure and production mode.
In addition, enterprises should look inward, lay a good foundation, practice internal skills, improve the level of fine management through deepening benchmarking, promote the integration of internal resources through management innovation, achieve transformation and upgrading through technological innovation, promote the realization of high product quality, strong brand effect, production technology, technological level or service level. Building first-class enterprises with excellent products, outstanding brands, leading innovation and modern governance will better meet the needs of local high-quality development and truly promote economic and social construction.
3. What are your views on the future development of the cement industry?
At present, our cement industry is facing an extremely difficult situation unprecedented in the past decade, with serious overcapacity, declining market demand, prominent contradiction between supply and demand, rapid decline in prices, difficulties in business operation, declining industry efficiency and difficulties in steady growth of the industry. It can be said that the development of the cement industry has entered a plateau. According to the UBS research report, real estate sales are expected to fall by 10% this year and another 5% to 10% next year; new construction will fall by 25% and 10% this year and next year, and real estate investment will fall by 10% and 5%. The next two or three years will be a period of turbulence and integration for the cement industry to rebuild a new balance and order under the circumstances of major changes in the supply and demand pattern.
With the slowdown of China's economic growth and the irreversible trend of the overall contraction of the real estate industry in the medium and long term, the overall demand for cement tends to decrease irreversibly. The cement industry will continue to shrink its production capacity on the basis of stable supply. According to a special research report of the industry association, by 2030, the total annual consumption of cement in China will be about 1.6 billion tons, and the output will be reduced by about 30%.
Although the overall demand for cement tends to decline dramatically, cement, as the main basic building material, has played an important role in our industrialization, urbanization and modernization. The society needs it and the people need it. We should have a positive view and attitude towards the development of the industry. As long as we actively promote transformation, upgrading and innovative development, we will be able to better integrate into and promote economic and social development.
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