Plastic building materials industry shifts to the center of gravity

"From January to September, the company's production and sales volume of plastic pipes and profiles increased by 27.5% and 33% respectively year-on-year, and sales revenue and profits increased by approximately 30% year-on-year." On October 11, Guo Runmin, general manager of Xi'an Hi-Tech Building Materials Technology Co., Ltd., reported to the reporter. He said that despite the unfavorable factors such as rising raw material prices and the slowdown in the growth of the real estate industry, sales of plastic pipes and profiles in the first-tier cities have been significantly reduced this year. However, due to the better development of cities in the second, third and even fourth-line (county towns), closely tracking government-supported housing and affordable housing, as well as irrigation and water conservancy construction projects, and successfully obtaining qualifications for "qualified suppliers" for these projects, The results have achieved good results.

And Guo Runmin is also in a good mood as well as the deputy general manager of Xinjiang Tianye Water-saving Irrigation Equipment Co., Ltd. Chen Jun. He said that benefiting from the Central "No. 1 Document" and the benefits that water-saving irrigation equipment has brought to farmers, this year, Tianye, the world's largest water-saving irrigation equipment manufacturer, has all production lines at full capacity. Even the holidays did not stop, but still unable to meet the downstream needs. Rough statistics: From January to September, the company's production and sales of plastic water-saving irrigation equipment increased by more than 50% year-on-year.

However, contrary to the above two companies, Wuhu Conch Profile Co., Ltd. has issued an announcement a few days ago: It is expected that from January to September, the company's performance will drop by 65% ​​to 70% year-on-year.

Reporters interviewed or searched for related corporate financial reports on plastic pipes and profiles and found an interesting phenomenon: plastic building materials enterprises located south of the Yangtze River, this year's performance generally declined; while northern enterprises showed strong growth.

For example, Hebei Zhuozhou Mingzhu Stock Co., Ltd., which manufactures plastic pipes, has seen its net profit increase to 42.21 million yuan in the first half of the year. The Gansu Daxie Water-saving Equipment Co., Ltd., which manufactures water-saving irrigation equipment and water-saving construction projects, had a new signing of 323 million yuan in the first half of the year, an increase of 55% year-on-year. Jinde Pipe Group, the largest plastic pipe manufacturer in Asia, saw an increase of 63% in the production and sales volume of plastic pipes from January to September.

The situation of the southern enterprises is generally unsatisfactory. Excluding the decline in the performance of Conch Profiles, Fujian Yatong New Materials Co., Ltd. recorded a loss of 20.38 million yuan in the first half of the year. Sichuan Huasu Holdings Co., Ltd. lost 53.03 million yuan in the first half of the year, and Anhui Guotong Hi-tech Industrial Co., Ltd. recorded a loss for the first half of the same period of last year. More than 2 times.

For this difference between North and South, Guo Runmin believes that there are five reasons: First, in the past few years, PVC, PE, and PP production capacity have increased rapidly in the north, and in particular, a large number of PVC projects have been put into operation, providing local companies with sufficient and relatively inexpensive prices. raw material. Second, most northern provinces are rich in energy, resources, and labor. Electricity prices and labor costs are relatively low in the south, and the overall cost advantage is obvious. Third, most of the northern regions are underdeveloped, urban gas supply, heating and water supply and drainage networks, and construction of farmland water conservancy facilities are lagging behind. Historical accounts are overdue, and now they need to be improved and compensated. The demand for plastic pipe materials is relatively large. The northern companies that have gotten the moon have business opportunities. Fourth, the pace of urbanization in the northern areas and the development of the real estate industry lags behind that of the southeastern provinces and cities. The real estate industry in some places has just begun and the development space is relatively large. This has brought a rare opportunity for plastic pipe and profile enterprises. Fifth, the amount of reconstruction projects for shanty towns in coal mines and mining enterprises in the northern region is huge, and there are no more households. The introduction of a series of national policies has accelerated the pace of transformation of affordable housing and shanty towns. Since nearly 70% of the affordable housing and shantytown reconstruction tasks are concentrated in the central and western regions and the northeast region, they have brought rare opportunities for development to northern enterprises. The gap between North and South presented by plastic building materials companies indicates that the industry's center of gravity is shifting to the north. The opportunities faced by the northern enterprises in the future may be better than those of the southern enterprises.

Chen Jun believes that many years of experimental promotion has proved that after the use of water-saving irrigation equipment, crops in dry regions such as northwest and northeast can increase production by 30% to 50%, and production in some areas can even double. However, the first-time input of water-saving irrigation equipment was large (the drip irrigation system cost about 600 yuan per mu), which restricted its application. However, benefiting from the “No. 1 Document” of the Central Government, the first-phase investments made by local governments for users of water-saving irrigation equipment are generally subsidized by the government or directly subsidized. After that, the annual maintenance and replacement costs can also enjoy the government’s subsidy policy for agricultural machinery. Farmers actually Did not spend a few dollars, but increased production by more than 30%, and this system is generally available for more than 25 years. As a result, the area for the promotion of water-saving irrigation equipment has expanded rapidly, and related companies including Xinjiang Tianye have naturally benefited greatly.

Guo Runmin believes that both southern and northern enterprises should change their business philosophy of focusing on big cities in the past, and make great efforts to develop third- and fourth-tier cities and rural markets according to changes in the market. Only then can the "Oriental not shine brighter in the West." According to statistics, from January to August this year, the trading volume of commercial housing in first-tier cities generally decreased by more than 30%. From the fourth quarter to the first quarter of next year and even longer, it is difficult for the first and second tier cities to have much improvement in the real estate industry. However, the growth of the real estate industry in the third and fourth tier cities is very strong. The construction of affordable housing and the transformation of shantytowns have been widely promoted by the government and will constitute a long-term favorable for the plastic building materials market. Xi'an Hi-Tech Co., Ltd. is aiming at the transformation project of affordable housing and shanty towns, and set up a special “leader group” to track projects, strengthen communication and coordination, do a good job of all service coordination and supporting work, and timely adjust product structure, production and The products supporting the transformation of affordable housing and shanty towns have benefited from China University of Science and Technology and achieved rapid growth.