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However, overly concentrated blind investment has made PVC low-end product production excess, and its malignant effect has started to show. At present, China's PVC pipe fittings products are still concentrated in urban and rural supply and drainage pipes and fittings, rainwater drainage pipes and fittings, and other low-end products, due to excess capacity resulting in its market capacity tends to be saturated, exacerbating the degree of intense competition. In order to compete for the market, some companies adopt price-driven strategies. In particular, some small-scale enterprises use low-quality products to carry out low-priced dumping. The price war has intensified and the entire industry is in a position of vicious price competition.
At the same time, as the international crude oil prices have soared, the price of plastic raw materials in the international market has risen across the board. Affected by the international market, the price of PVC is also rising. Although this year has dropped slightly, coupled with restrictions on heat stabilizers, some weak SMEs still have difficulties in operating, even at the edge of losses, PVC pipe. The entire enterprise is facing severe challenges.
For a long time, the PVC pipe industry has the problem of low product technology content and single product type. The original competitive advantage is that the price is lower than that of polyethylene and polypropylene pipe materials, and the rising price of raw materials makes it in a passive situation and provides an entrance for competitors. The sudden emergence of the emergence of polyethylene pipe market in addition to the original gas pipe, heating pipe, etc., in recent years began to enter the urban and rural supply and drainage pipe and fittings market.
From the trend of the world plastics market, high prices of raw materials will continue for some time. However, due to its consumption characteristics, plastic pipes have a relatively small space for price increase, and they hope that the price of raw materials will fall. It is not easy to solve the problem of PVC pipes, and it is difficult to fundamentally get rid of the passive situation. Therefore, it must move from passive to active “self-helpâ€. , Quickly adjust business ideas.
First, we must shift from product price competitiveness to brand competitiveness, strengthen the ability to respond to emergencies, and build our own competitive bastion. All indications indicate that domestic PVC pipe manufacturers have entered the era of low profit. In order to win a sustainable and stable development space, enterprises should establish a brand image as soon as possible. Large-scale enterprises can increase the cost caused by the increase in raw material prices by optimizing production management. For small and medium-sized enterprises, they may wish to unite and reduce production costs by centralizing the procurement of raw materials.
Second, we must strengthen international trade and expand the international market. Compared with the domestic PVC pipe market, domestic plastic pipe products have a price advantage in the international market and have relatively high profits.
Third, we must increase new product development efforts and open up new profit points. The application of domestic PVC pipe has many blank areas compared with advanced countries. This is the new market space, such as PVC hose. At present, the production of domestic plastic pipe enterprises is mainly concentrated in the PVC hard pipe, and relatively few companies involved in PVC hose.
Fourth, we must improve marketing innovation capabilities. In the past, domestic PVC pipe companies adopted industrial marketing promotion strategies. In fact, from the perspective of the essential characteristics of PVC pipe, it will be more and more directly oriented to consumers. Consumers may wish to adopt marketing promotion strategies and build brand names. According to the current sales channels of domestic PVC pipe enterprises, the construction of marketing network should be accelerated, and the promotion of market terminals should be strengthened, such as cooperation with large building materials supermarkets.
According to statistics from the China Plastics Industry Association, the current annual growth rate of China's plastic pipe market is 15%, ranking first in the world. With huge market capacity and low entry barriers, plastic pipes, especially PVC pipes, have been a hot spot for domestic investment in the past few years. At present, China's plastic pipe production capacity has exceeded 3 million tons. Among them, PVC pipe production is the largest, accounting for about 70% of the pipe market share. In China, there are more than 30 PVC pipe enterprises with an annual production capacity of more than 10,000 tons, and there are more than 1,600 PVC pipe production lines in all regions with an annual production capacity of over 2.5 million tons and an annual output of over 1.2 million tons.
December 16, 2022