In recent years, with the increasingly fierce competition in the domestic cement market, many domestic cement enterprises have turned their attention to overseas markets, hoping to open up new growth space through the "going out" strategy.
At present, there are two main ways for domestic cement enterprises to go overseas: one is to directly acquire enterprises or build factories overseas to carry out localized production and sales; the other is to produce in China and then export products to overseas markets through international trade. These two ways of going to sea have their own merits, but also face different challenges, which way is more suitable for domestic cement enterprises? Cement products have the characteristics of large volume and heavy weight. Long-distance transportation is not only expensive, but also may face many uncertainties, such as the loss during transportation and the instability of transportation cycle. With " 2. Enjoy preferential policies and integrate into the local industrial chain: To promote domestic infrastructure construction and economic development, a series of preferential policies will be given to enterprises investing and building factories locally, such as tax relief, land preferences, subsidies, etc. It is conducive to helping enterprises successfully integrate into the local industrial chain, and from raw material procurement to product sales, forming a relatively complete industrial closed-loop, further enhancing the profitability and market position of enterprises.
3. Enhance brand influence and achieve long-term stable development: Establishing its own production base overseas will help enterprises to deeply understand the local market demand, cultural differences and consumption habits, so as to better carry out product research and development, brand building and market promotion for the local market. Through long-term and stable production and operation activities, enterprises can establish a good brand image, win the trust and recognition of local consumers, and lay a solid foundation for long-term and stable development.
Challenges:
1. Large investment scale and long capital recovery cycle: Overseas direct acquisition or investment in building factories requires huge investment in land acquisition, plant construction, equipment procurement and installation, personnel recruitment and training, etc. This puts forward extremely high requirements for the capital strength and financing ability of enterprises. In the process of rapid expansion of overseas production capacity of Western Cement, capital expenditure has increased substantially, and the asset-liability ratio has increased. Although the debt pressure is expected to ease with the gradual release of overseas profits, the financial pressure is undoubtedly one of the great challenges faced by enterprises in the early stage of investment.
2. Facing the complex political, economic and cultural environment: There are great differences in the political system, economic policies, laws and regulations, and cultural traditions of different countries, which brings many uncertainties and risks to the enterprises that invest and build factories overseas. The instability of political situation may lead to policy changes and social unrest, affecting the normal production and operation of enterprises; the adjustment of economic policies, such as exchange rate fluctuations and interest rate changes, may increase the financial costs and operational risks of enterprises; cultural differences may cause enterprises to encounter obstacles in management communication and market promotion. For example, the political situation in some African countries is not stable enough, the policy continuity is poor, and enterprises may face the risk of sudden policy changes in the process of investing and building factories.
3. Shortage of technical and managerial talents: Talents with professional technical knowledge and rich management experience are needed to build and operate factories overseas. However, there may be a lack of sufficient high-quality technical and managerial personnel in the local area, and enterprises are facing problems such as high cost and difficult adaptation of talents when dispatching talents from home. In addition, how to combine the domestic advanced production technology and management mode with the local actual situation is also a difficult problem that enterprises need to solve. If the problem of talents can not be effectively solved, it may affect the production efficiency, product quality and management level of the factory.
Product export: Short-term strategic
advantages of flexible attack:
1. Investment risk is relatively low: through the way of product export, enterprises do not need to invest in large-scale fixed assets overseas, but only need to pay attention to the production and sales of products. The capital investment is relatively small and the risk is relatively controllable. This is a more appropriate choice for those enterprises with limited financial strength, lack of in-depth understanding of overseas markets, and hope to explore the market in the early stage of going to sea.
2. Be able to quickly respond to market changes: Under the product export mode, enterprises can flexibly adjust production plans and export strategies according to changes in international market demand. When the demand for cement products in an overseas market suddenly increases, the enterprise can quickly organize production, increase export efforts and seize market opportunities; when the market demand fluctuates or shrinks, the enterprise can also reduce export volume in time to avoid excessive inventory backlog. This flexibility enables enterprises to better cope with the complex and changeable international market environment.
3. Make full use of domestic industrial advantages: After years of development, China's cement industry has formed a complete industrial chain and strong industrial supporting capacity, and has obvious advantages in production technology, equipment manufacturing, raw material supply, etc. Through the export of products, enterprises can give full play to the advantages of domestic industry, push high-quality cement products to the international market, and improve the competitiveness of China's cement products in the international market.
Disadvantages:
1. Facing trade barriers and market competition: In international trade, cement products often face various trade barriers, such as tariffs, quotas, technical standards, etc. These trade barriers increase the export cost of products and weaken the price competitiveness of products. At the same time, the competition in the international cement market is fierce. Cement enterprises in developed countries such as Europe and the United States have strong advantages in technology, brand and market share. Local cement enterprises in emerging market countries are also growing. Domestic cement enterprises are facing various competitive pressures in the process of product export.
2. The transportation cost is high and restricted by logistics conditions: As mentioned above, the characteristics of cement products determine that the transportation cost is high. Especially for long-distance exports, transportation costs account for a large proportion of the total cost of products. In addition, logistics conditions also have an important impact on the export of products. If the port facilities of the country where the target market is located are not perfect and the transportation network is not developed, it may lead to delays in cargo transportation, difficulties in loading and unloading, and further increase export costs and risks.
3. It is difficult to establish a long-term and stable market share: the export of products mainly depends on customer orders, the connection between enterprises and overseas markets is relatively loose, and there is a lack of deep penetration and long-term layout of the local market. In the fierce market competition, once price fluctuations, product quality problems or the impact of competitors occur, enterprises are easy to lose customers and market share, and it is difficult to establish a long-term stable market position in overseas markets.
Comprehensive consideration: adjust measures to local conditions, diversify the development
of overseas direct investment to build factories and export products. These two ways of going to sea have their own advantages and disadvantages. When choosing the way of going to sea, domestic cement enterprises should not generalize, but should consider their own strength, market objectives, resource conditions and international market environment.
For large cement enterprise groups, such as For some cement enterprises with smaller scale, limited capital and less understanding of overseas markets, product export is a more flexible and less risky way to go to sea. Enterprises can first export products, accumulate overseas market experience, understand the target market demand and competitive situation, and gradually enhance their competitiveness in the international market. When conditions are ripe, we will consider whether to further increase overseas investment and establish localized production bases. In addition, some enterprises can also try to adopt a diversified strategy of going to sea and combine the two ways organically. For example, in some areas with great market potential but unstable investment environment, we should first open up the market situation through product export, accumulate a certain market share and brand awareness, and then consider investing and building factories; Or in areas where production bases have been established, the proportion of product export and localized production should be adjusted in time according to the local market demand, so as to achieve the optimal allocation of resources and maximize the benefits of enterprises. In a word, in the process of going to sea, domestic cement enterprises should fully recognize the advantages and disadvantages of different ways of going to sea, adjust measures to local conditions, and formulate strategic plans suitable for their own development. At the same time, enterprises need to pay close attention to the international market dynamics, strengthen risk management, and constantly enhance their core competitiveness in order to gain a firm foothold in the overseas market and achieve sustainable development. At present, the competition in the domestic cement market is fierce. In order to accelerate the upgrading of the industry and enhance the comprehensive competitiveness of domestic cement enterprises, China Cement Network is scheduled for September 23-24. Held in Zibo, Shandong " conference.
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