Cement prices have fallen by more than 50% and a new era has begun.

In recent years, affected by the decline in demand, the domestic cement market has continued to decline.

According to the National Cement Price Index (CEMPI) of China Cement Network, the current index has fallen 105 points, or 49.42%, from its high in 2021. Cement prices have reached the lowest point in five years, and for the changes in the market situation, the feelings of the relevant industry are undoubtedly the most obvious.

Thanks to the early start of the economy, superior geographical location, large market demand and other factors, Zhejiang building materials industry cluster formed earlier and experienced a long period of brilliance.

According to Xia Hailiang, the founder of Yuzhigan Building Materials Co., Ltd., the history created by the infrastructure and real estate market in the past decades has also given building materials practitioners a long and steady runway. When the market is good, the downstream demand is very large, all urging cement, almost how much money can be done on a large scale.

"The characteristic of this industry is that it is very difficult to start a business in the early stage, and the capital gap is relatively large.". Upstream requires payment and delivery, and downstream requires you to advance funds first. Once a stable customer relationship has been built up, the business becomes simple.

Xia Hailiang: "It is very important to guarantee the supply. Sometimes I have to guarantee the supply of customers even if I lose money." In this mode, Xia Hailiang has established a solid business relationship with the demand side, and has been growing steadily.

But in recent years, Xia Hailiang has clearly felt some difficulty in business.

"Last year, the overall sales of cement dropped by 10%, originally thought it would be better after the epidemic, but this year there is about 30% decline, a little more than expected.". Cement prices have dropped by more than 50% from the highest level in 2021 to the present, and there has been no increase in cement prices in the first half of this year, which has not happened in my career for more than 20 years.

As the bottom of the smile curve, Xia Hailiang is striving to extend to both ends of the industrial chain to achieve integration and cooperation.

Xia Hailiang's strategy is divided into two steps, first with the industry's peers to warm up, through cooperation to reduce costs and increase efficiency, such as centralized warehousing to share rent. But what he ultimately wants to accomplish is the second step: to enhance the brand value by improving the service.

Xia Hailiang believes that in the golden period of the market, the industry is mixed, even if some enterprises do not have a strong sense of service, but with the dividends brought by the rising market, they can still get good returns; But when the market enters a downward period, the practitioners who make up the number will be gradually eliminated, only for the sake of users, and constantly improve the level of service enterprises can become the last survivors in this "big wave of sand".

At the same time, Xia Hailiang also pointed out that due to the downturn of the real estate industry, the difficulty of downstream repayment has increased, the receivables of enterprises have been increasing, and the financing capacity has become the key to the competitiveness of enterprises. In recent years, Weizhong Bank has alleviated the financial difficulties, broadened the financing channels and solved the cash flow problems of enterprises; At the same time, with the help of the "enterprise + promotion" rights and interests of Weizhong Bank Weizhong Enterprise +, Xia Hailiang's entrepreneurship story and enterprise brand are made into industry stories, and brought to the public in the form of feature films, so that more people can understand his and Yuzhigan's development experience in the cement industry; Help corporate brands gain greater exposure and open up more business opportunities.

Over the past few decades, numerous large and small building materials enterprises have been bred in this vibrant soil of Zhejiang, which together constitute the whole industry ecosystem. Nowadays, the times are changing, shuffling is coming, and those enterprises that really cultivate this land will eventually usher in their dawn.