On August 5, the Shandong Cement Industry Association issued the "Initiative to jointly resist the" vicious competition of involution "to promote the healthy and stable development of the industry", saying that since this year, with the continuous decline of market demand, the contradiction between supply and demand in the cement industry of Shandong Province has intensified, some enterprises have not changed their business thinking of "quantity, cost and profit", and the low-price rush has intensified. The overall product price and industry efficiency of the province have fallen to the lowest level in the past 10 years, ranking at the end of the country. If this "involution competition" continues, it will evolve into a disaster for the cement industry in Shandong Province.
In order to fully implement the decision made by the Political Bureau of the CPC Central Committee on July 30, 2024, we should strengthen industry self-discipline and prevent vicious competition. In order to strengthen the mechanism of survival of the fittest in the market, smooth the exit channels of backward and inefficient production capacity, jointly resist the "vicious competition of involution" and restore the fragile situation of ecological construction of cement industry in Shandong Province, the following proposals are issued to all member enterprises:
First, recognize the situation and maintain the strength. Under the situation of economic cyclical adjustment, the continuous decline of cement demand is irreversible. We should face it correctly and take the initiative to deal with it, strengthen our confidence in development and maintain our strategic strength, actively practice the concept of "industry interests outweigh enterprise interests, enterprise interests are pregnant with industry interests", purify industry ecology, strengthen industry self-discipline and avoid market trampling. Jointly create a fair and stable market competition environment.
Two, both ends of production and marketing, with subtraction. In his speech at the opening ceremony of the Summer Davos Forum held in June this year, Premier Li Qiang said that "the cake of the world economy is no longer so easy to make bigger". We should deeply understand the essence of the spirit and rationally view the current situation of cement industry reduction under the global economic downturn. We should abandon the Cold War mentality, properly control differences, actively control the quantity from both ends of production and marketing, reduce the quantity, refrain from price war and share competition, and maintain a healthy and orderly market order.
3. Accurate rigidity and efficient peak staggering. Under the current situation, peak staggering production is still the most effective way to promote supply-side structural reform and improve the serious contradiction of excess capacity in the industry. The Provincial Cement Association will strictly comply with the decision-making and deployment of "strengthening the output monitoring and early warning of building materials industry and promoting the normalization of cement peak staggering production" in the Action Plan for Energy Conservation and Carbon Reduction 2024-2025 issued by the State Council and the requirements of the Shandong Provincial Government and competent departments, formulate and implement specific plans for the normalization of peak staggering production, and all member enterprises should consciously and actively implement them. To achieve accurate, rigid and normalized peak staggering production in the whole province, reduce resource consumption, reduce ineffective supply, maintain a dynamic balance between supply and demand, and achieve quality operation and effective development of the industry.
Fourth, large enterprises lead and many enterprises work together. During his visit to Shandong in May this year, General Secretary Xi Jinping stressed that "Shandong should set a good position and take the lead in the overall development of the country". Shandong is a major province of cement industry. Leading enterprises in the province should continue to play a leading role in the elimination of inefficient production capacity, the development of off-peak production and the maintenance of market order. Small and medium-sized enterprises should actively follow up, consciously implement the requirements of off-peak production, actively practice self-discipline responsibility, abandon the thinking of "quantity, cost and profit" and firmly adhere to the concept of "price, cost and profit". All member enterprises concentrate on restoring the industry ecology, improving the market order, promoting the industry to return to a rational and healthy track as soon as possible, and making positive contributions to the steady economic development of the province.
5. Transformation and upgrading, innovation and development. In accordance with the requirements of "carbon reduction, pollution reduction, green expansion and growth" at the Third Plenary Session of the Twentieth Central Committee of the CPC, we should speed up the application of green intelligent technology, enhance the overall strength of environmental protection, energy saving, quality and safety of enterprises, and advocate the establishment of innovative ability, customer satisfaction, quality improvement, brand impact, employee growth and social contribution. Stimulate the internal motivation of enterprises, enhance the growth potential, and enhance the overall level of high-quality development of the industry. Thousands of sails pass by the side of
a sunken boat, and thousands of trees spring in front of a diseased tree. We firmly believe that under the strong policy guidance of the provincial and municipal governments and competent departments, through the joint efforts and active cooperation of all member enterprises, we will surely promote the healthy, stable and high-quality development of the cement industry in our province and make positive contributions to the economic and social development of the province.
