From about 86 million tons at the peak of demand to about 35 million tons today, the demand for cement in Japan has almost "dived" from the 1990s to today. After
experiencing the "roller coaster" of demand, Japan's cement industry has finally achieved steady development through a series of measures to reduce production capacity, some of which are worth learning from.
From 1983 to 1991, the fastest stage
of capacity reduction in the history of Japan's cement industry. In 1983, the capacity utilization rate of Japan's cement industry was about 68%, and the operating profit margin of the whole industry was 0.4%. In 1991, the capacity utilization rate of the whole industry was about 90%, and the operating profit margin recovered to 6.4%. How did Japan achieve such a large increase?
In 1983, the Ministry of International Trade and Industry of Japan passed the Law on the Improvement of Temporary Measures for the Improvement of Specific Industrial Structure, which exempted the restrictions on centralized operation and gave certain tax relief and economic incentives for the elimination of equipment.
In 1984, the Basic Plan for Promoting the Structure of the Cement Industry was released, and the cement industry carried out drastic reforms, mainly including two aspects:
1. Capacity coordination: The Ministry of International Trade and Industry of Japan negotiated with cement enterprises to determine the capacity quotas to be reduced by each enterprise. In order to alleviate the problem of uneven capacity quota, monetary subsidy measures have been introduced.
2、, cement enterprises were integrated into 5 companies: At that time, there were 23 enterprises in the cement industry in Japan. In order to coordinate the production capacity smoothly, these 23 enterprises jointly established 5 joint ventures to promote the joint operation of enterprises within the group.
Under the system of five major common undertakings, the specific measures to optimize competition include:
production optimization: centralizing or delegating production to factories with higher production efficiency;
logistics optimization: canceling or integrating overlapping freight routes, merging or resetting sales and shipping stations;
Collaborative purchase: collaborative and joint purchase of raw materials, auxiliary materials and fuels required for cement production;
others: optimization of brand and trademark, optimization of business policy and main business structure, etc. In April
1987, the Ministry of International Trade and Industry of Japan promulgated the Law on Promoting the Transformation of Industrial Structure to further eliminate excess capacity.
In this way, the Japanese cement industry has completed the task of capacity reduction at this stage.
From 1991 to 1994, under the background of
"Heisei bubble" in the 1990s, Japan's domestic demand for cement increased sharply, and cement production capacity expanded again. Since 1991, five joint ventures have been dissolved and production capacity has been expanded again. In 1994, the production capacity increased by more than 10 million tons compared with 1991, but the operating profit of the whole industry was only 35% of that in 1991.
From 1994 to 1998, after the "bubble" of fierce competition and merger and reorganization
burst, the demand for cement began to decline, and the fierce competition among cement enterprises forced large-scale merger and reorganization. At this stage, the cement industry in Japan underwent the second major integration. By 1998, the whole industry in Japan was integrated into 12 cement groups, the industry concentration was greatly increased, and a relatively stable pattern was basically formed. Since
1998, after the formation of a stable pattern, market forces have gradually formed, with large enterprises leading and small enterprises following, and capacity removal has begun to accelerate.
Generally speaking, there are three experiences in Japan's capacity reduction:
First, the government intervenes and introduces relevant policies to clarify the capacity quotas that enterprises need to reduce and introduce monetary subsidies.
The second is to improve industry concentration, promote mergers and reorganizations, and integrate production capacity.
Third, large enterprises should play a leading role and take the initiative and resolutely reduce production capacity.
