Five Challenges Faced by the Hardware Industry Changing the Development Mode is Imperative

The global adjustment and re-distribution of manufacturing industries are proceeding quietly. The management of economic globalization has brought us opportunities for industrial transfer and manufacturing of large countries. The country’s measures to maintain growth and expand domestic demand and adjust the structure since 2009 have given the industry development and expansion. The vast market space, and hardware products are the necessities of people's daily life, the market demand potential is large, the key is how to further improve product quality, continue to meet people's growing material and cultural needs, and promote the industry demand continues to grow. Although the domestic market has the support of policy support for expanding domestic demand, it still needs long-term efforts to truly occupy the domestic high-end market. Luo Baihui, head of the International Die & Metals and Plastics Industry Suppliers Association, said that after undergoing structural adjustments in recent years, the industry has paid more attention to appropriately expanding production capacity, gradually increasing investment in R&D and technological transformation, gradually increasing the added value of products, and further establishing its own brand. The status in the domestic and foreign markets. It lays a solid foundation for the next step, but at the same time, the hardware industry is also faced with multiple challenges. The industry must resolve to change the mode of development, from the expansion of the quantity to the improvement of quality, and make up its mind to adjust the structure and increase the proportion of medium and high-grade products. , Adjust the proportion of domestic and foreign sales, and adjust the proportion of self-owned brands and brands. Establish a high standard, high quality, high efficiency development concept, use advanced technology to transform traditional industries, increase investment in science and technology and R&D, increase product added value, and truly achieve a change from big to strong.

Hardware industry faces five major challenges

1. Labor costs continue to rise

According to data obtained from the National Bureau of Statistics, even after deducting inflation, the price of China's migrant workers has increased by 10% to 15% in 2008, and this trend will further increase in the future. Although from some data point of view, China's manufacturing industry has indeed realized a miracle of large-capacity growth, but this is conditional on the massive investment in labor. If the prices of Chinese manufacturing products have risen, and there is no sufficient brand concept to attract consumers, Chinese goods will gradually lose their position in the international market.

2. Raw material prices continue to rise and fluctuate

Nickel and chromium are important raw materials for stainless steel. Taking nickel metal as an example, the fluctuation has increased from 10,000 US dollars per ton to more than 50,000 US dollars over a period of time, resulting in the domestic stainless steel price rising from 16,000 yuan/ton to 43,600 yuan/ton. Although affected by the global financial crisis, the price of stainless steel fell back to about 20,000 yuan/ton in 2009, but as the economy improves, stainless steel prices will continue to trend higher in the future.

Copper price: From the end of 2008 to the end of 2010, it has been growing from 21,000 yuan/ton, and it has recently reached a high of 73,000 yuan/ton.

The price of aluminum metal consumes a lot of electricity during the production process, while the electricity price is rising sharply, and demand in China and other places will absorb excess supply. After falling back to the low point in early 2009, the current aluminum price has risen sharply to about 17,000 yuan/ton, and is expected to continue to rise.

3. Accelerated appreciation of the exchange rate of ***

China’s market leadership as the second-largest economy continues to increase, but the pressure for revaluation will gradually increase, which will have a negative impact on exports. *** The exchange rate of the U.S. dollar has been adjusted from 8.27 to about 6.58, and the cumulative appreciation has exceeded 20%. It has recently approached the highest point of 6.57. On June 21, 2010, the Central Bank announced that it had started the reform of the exchange rate formation mechanism. With the continuous development of China and its rising international status, the continued appreciation of the currency will become inevitable. The sharp appreciation of *** directly deducted the profits of enterprises, and the competitiveness of enterprises was seriously affected.

4. Decline in Export Tax Rebate Brings New Pressure

The reduction and cancellation of export tax rebates implemented on July 1, 2007 have had a significant impact on the cooking industry, further narrowing corporate profitability. The current situation is 13-14% of valves, 14% of faucets, 5% of wire mesh, 9% of hand tools, 5% of garden tools, 9% of stainless steel vessels, 11% of lighters, 9% of cooking utensils, 9% of locks, 13% of zippers, and showers Room 11%, knife and scissors 5%, safe 5%, gas water heater 9%, stove 5%, export tax rebate rate was generally reduced to 5% on July 1, 2007, although some export tax rebate rates were withdrawn in 2008 and 2009, However, there are still many products still maintained at the level of 5%, which will inevitably affect the profitability of enterprises.

Under the premise that the export tax rebate rate has been lowered, we will continue to face pressure from non-tariff barriers such as anti-dumping and countervailing measures in the international market, especially the upgrade of protectionism in some developed countries, ie, frequency, intensity, means, content, etc. The upgrading in four aspects not only hinders the export of my products, but also directly hinders the upgrading of my industry.

5. Increased pressure on corporate funds and technical requirements

With the advent of the interest rate hike cycle and the continuous improvement of the society and the improvement of consumer power, consumers are paying more and more attention to the beauty, practicality, safety, and health of products. Enterprises need to spend more effort to solve financial pressure and technology. Claim. This aspect is reflected in the rapid improvement of the material quality of the company, continuous research on new material applications, the introduction of new product manufacturing, which means more working capital; on the other hand, the company's processing technology is also undergoing major changes, such as polishing Automatic lines, stamping processes and equipment, surface treatment processes and equipment, and automatic packaging lines also require a large amount of technical research and equipment investment.

In the domestic market, we are still faced with difficulties such as non-standard competition, changes in consumption patterns, and differences between urban and rural areas and regions. There is still homogenous competition and low-price competition in the domestic market. Product capacity is still in excess, and various cost increase factors and price increases will also be faced. pressure.

Opportunities and challenges coexist, and the industry must resolve to change the mode of development, from the expansion of the quantity to the improvement of quality. It is determined to adjust the structure, increase the proportion of medium and high-grade products, adjust the ratio of domestic and foreign sales, and adjust the proportion of OEMs and self-owned brands. Establish a high standard, high quality, high efficiency development concept, use advanced technology to transform traditional industries, increase investment in science and technology and R & D, increase product added value, and truly achieve the transition from big to strong, this is the only way for the development of the industry.

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