On June 26, the "2024 Conference on High Quality Development of Cement Industry" was held in Wuhan. Wang Jianchao, Vice General Manager of Anhui Conch Group and Vice Chairman of Conch Cement , attended the conference and made an important speech.
Wang Jianchao said that during the "13th Five-Year" period, the domestic cement industry has achieved good benefits. The main reasons are: 1, the overall demand remains strong; 2, the government's macro-control, the industry's implementation of off-peak production; 3, technological innovation and technological progress have also improved the level of industry efficiency.
Wang Jianchao believes that there are objective and subjective reasons for the current predicament of the cement industry.
Objectively, the impact of the three-year epidemic, especially the downturn of real estate, has a great impact on the industry. Over the past three years, the area of new real estate construction has declined substantially, and a large part of the domestic public finance budget is land finance. The downturn of real estate not only affects the demand for cement in real estate, but also affects local finance and infrastructure.
Subjectively, the increase of new production capacity in the industry has broken the original good competition and cooperation ecology. Since the 13th Five-Year Plan, the industry has built more than 140 production lines, and the new production capacity is more small and large, 6000 tons can achieve 10000 tons. In addition, many enterprises carry out production upgrading in the name of technological transformation, which also seriously damages the industry ecology.
Wang Jianchao put forward several suggestions for the industry:
1. Improve political standing, enhance confidence, restructure the industry ecology, and make contributions to economic development. The decline in industry efficiency not only affects the development of enterprises, but also affects local tax revenue, employee income, and even employment reduction. For the cement industry, it should fulfill the corresponding corporate responsibility and social responsibility. At the same time, in the short run, off-peak production is still one of the effective means to cope with the current market situation. The industry should consciously reduce production capacity through off-peak production, promote differentiated off-peak production in combination with regional market differences, and implement off-peak production well. In addition, the top 50 enterprises should take the lead and work together to maintain the industry ecology and improve the industry efficiency.
2. Unify ideas and control increments. A large number of production lines have been built in the 13th Five-Year Plan, which is an important factor leading to the downturn of the industry. In the downward period of the market, the impact of putting a new line into operation will be further magnified, affecting market stability, and the industry should strictly control new production capacity. Enterprises should also realize that the construction of large-scale production lines is actually a high-quality non-performing asset. Because of the low operating rate, the investment is 2.5-3 times that of the past, and the cost of capital interest plus various amortization is very high, so it is not competitive in the market.
3. Digital transformation, green empowerment, and accelerating the development of new quality productivity. Wang Jianchao believes that under the new situation, the cement industry should promote digital transformation and green development, and digital technology will become the key to promote the development of the industry in the future. The cement industry needs to upgrade intelligently with the help of Internet of Things, big data and cloud computing, optimize the industrial structure and improve the quality of operation. At present, we should focus on energy saving and carbon reduction, upgrade and transform equipment technology, and promote the application of photovoltaic power generation, biomass fuel and other technologies.
4. Make concerted efforts, strengthen confidence and overcome industry difficulties. Wang Jianchao believes that to strengthen industry self-discipline and break through industry difficulties, enterprises in the industry need to share responsibility. Cement enterprises should jointly maintain the ecology, strengthen confidence, eliminate internal friction, continuously improve the concentration of production capacity, carry out resource integration, merger and reorganization, and promote the high-quality development of the industry.
