Why can't Conch Cement occupy the market share?

2024-04-11 14:04:43

Several years later, the capacity was effectively removed through market shuffling, and the capacity utilization rate of the cement industry returned reasonably. Perhaps it is the golden sentence of the cement industry, the world cement looks at China, China cement looks at conch!

At present, the complex situation of the cement industry is ups and downs, with serious overcapacity, and there is no sign of improvement. At a time when the industry is in a downturn, some people in the industry have pointed their finger at Conch Cement , saying that it is Conch Cement that has begun to compete for market share, which has led to a rise in the industry's anger and complaints.

Can Conch Cement really "interfere" with the sustainable and healthy development of the industry on its own? Over

capacity is becoming more and more serious, and Conch Cement has not added fuel

to the flames. From the basic point of view, the relationship between supply and demand is like an invisible baton, which plays a decisive role in the long-term development trend of the industry. In the cement industry, the current situation of increasing overcapacity and increasingly acute contradiction between supply and demand has basically formed a consensus. On the

demand side, with the downward trend of the real estate industry and the slowdown of infrastructure growth, the long-term downward trend of cement demand has become a foregone conclusion, and the demand for cement will drop to 1 billion tons in the next decade or become a big probability event. On

the supply side, in the years when the industry has enjoyed high profits due to the normalization of off-peak production, it is undeniable that it has also stimulated a sharp increase in cement "old for new" production capacity, and a large number of new production lines have "sprung up". According to the data of China Cement Network Cement Big Data Research Institute, in 2021-2023, 61 new production lines were put into operation in China, with a total annual clinker production capacity of nearly 97 million tons.

In the past three years, only four new production lines such as Conch Cement have been put into operation, with a total annual clinker production capacity of 7.6 million tons, accounting for 6.6% and 7.8% respectively, which is much lower than the 13% of Conch clinker production capacity in China.

From the data, we can see that some cement enterprises use capacity replacement as a "cover" to accelerate the "shotgun replacement". Conch Cement is still relatively sober and has not participated too much in the wave of new construction. The weakness of

market demand can not be easily intervened by manpower, while the excessive "transformation and upgrading" of the supply side, many backward production capacity, low competitiveness of production capacity turned into effective production capacity, and even the so-called "dead" production capacity was revived. This phenomenon has been reported by the Central Second Eco-environmental Protection Supervision Group to a province as a document to avoid capacity replacement, weakening the requirement of capacity reduction substitution of new cement clinker production lines to equivalent substitution. How can those enterprises that have exploited the loopholes of capacity replacement and have a high proportion of new production lines have the courage and qualifications to ask Conch Cement to "spare your hands" and "give up" market share to advance and retreat together?

Market-oriented competition is an effective way

to reduce production capacity. The Company Law stipulates that a company shall operate independently and be responsible for its own profits and losses with all its corporate property. The company shall independently organize production and operation according to market demand for the purpose of improving economic efficiency, labor productivity and realizing the preservation and appreciation of assets. It is illegal to exclude or restrict competition

in the market. This determines that in the market, competition among enterprises is normal. It is reasonable and legal for enterprises to occupy market share through fair competition. When the

industry is in a downturn, market share reflects whether the enterprise can survive steadily in the predicament, whether it can maintain competitiveness, and whether it has the advantage of seizing the first opportunity in the recovery stage.

Relying on the "T-shaped strategy", Conch Cement has an advantage in the three core issues of market, cost and sales. When the demand is high, the price is moderately raised to increase efficiency, and when the demand is low, the price is reasonably reduced to stabilize the quantity. This mode makes Conch Cement appear calm and calm in the changing market.

Since it has the strength and strength to "grab" share, and conforms to the law of market economy, and coincides with the industry in the imminent situation of capacity removal, the market share of Conch Cement is legitimate and reasonable, which is beyond reproach. Besides, there is no reason to blame the normal change of market share!

Historical experience tells us that we should keep pace with the times and constantly change. Inevitably, some people's cheese will be moved in the process of change, and the pattern of interests will be adjusted, which will inevitably lead to "bloody storms". It will take some time to withdraw inefficient production capacity through market competition and give full play to the advantages of superior enterprises, but it is the general trend for the market to play a decisive role in the allocation of resources, and no one can stop it. Even if the cement enterprises that have experienced a period of high profits generally have bulging pockets, the enterprises with low competitiveness will eventually withdraw from the market because of sitting idle.

Some experts pointed out that in order to solve the current cement overcapacity, only by playing and relying on the market mechanism, let the market play a decisive role in the allocation of resources.

From this point of view, those enterprises that blindly increase production capacity and aggravate the situation of overcapacity, as well as those enterprises that still have illusions and desire to muddle through when overcapacity is so serious, should face up to the reality that "lying down to earn" in the cement industry is no longer possible.

Several years later, the capacity was effectively removed through market shuffling, and the capacity utilization rate of the cement industry returned reasonably. Perhaps it is the golden sentence of the cement industry, the world cement looks at China, China cement looks at conch!

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