On March 28, the "Cement Economy 50 People Forum" hosted by China Cement Network was successfully held in Hangzhou. The theme of the forum was: Understanding the Changing Situation, Solving the Difficult Situation and Seeking Development. Zhuge Wenda, chairman of
Hubei Century Xinf eng Leishan Cement Co., Ltd., said that there is an industry view that backward production capacity should be eliminated through price war, but this idea is unrealistic. After these years of capacity replacement, there is not much backward capacity, and the industry is ultimately the competition between advanced capacity and advanced capacity.
Zhuge Wenda also cited as an example that if a small business has accumulated 500 million yuan in history, even if it loses 20 million yuan a year now, it will take 25 years to exhaust the accumulation of funds, and the biggest loss in the price war is precisely the enterprises with good benefits.
At the same time, Zhuge Wenda proposed that the cement industry should eventually move towards "harmony". Large enterprises should not think about price war, but should take advantage of the relatively cheap assets, acquire, integrate and shut down part of the production capacity, integrate the market structure, compete in an orderly manner, and realize the reasonable value of the industry.
From the experience of developed countries, it is often after a long period or even decades of competition that overcapacity is finally resolved through mergers and acquisitions, restructuring and closure. There is no need for the domestic cement industry to go through the road that foreign countries have already gone through.
