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Rubber industry: why are some happy and sad
Release time:
2014-06-09
In 2013, the rubber industry achieved good economic benefits. According to statistics from the China Rubber Industry Association, the industry's sales revenue margin was 5.57%, an increase of 0.74 percentage points from the previous year; the profit of 364 key enterprises increased by 18%. But some people are happy and some are worried. No matter how good the market is, there will be loss-making companies. No matter how bad the situation is, there will be operators who buck the trend. So, what are the factors that cause the completely different operating conditions of rubber and its upstream and downstream enterprises?
In 2013, the rubber industry achieved good economic benefits. According to statistics from the China Rubber Industry Association, the industry's sales revenue margin was 5.57%, an increase of 0.74 percentage points from the previous year; the profit of 364 key enterprises increased by 18%. But some people are happy and some are worried. No matter how good the market is, there will be loss-making companies. No matter how bad the situation is, there will be operators who buck the trend. So, what are the factors that cause the completely different operating conditions of rubber and its upstream and downstream enterprises?
Carbon black: Different quality grades, different benefits
Although the rubber industry achieved good results in 2013, this year, the carbon black industry entered a difficult position, especially since the profit in the first quarter was negative. Entering the second quarter, corporate profitability rebounded slightly, and the overall profit of the industry turned losses It was profitable, but corporate profits fell sharply throughout the year. The growth rate of the carbon black industry, which survives in the cracks, has slowed down and entered the era of micro growth. Data show that the carbon black industry's sales revenue profit margin in 2013 was only 0.16%, while profits were negative growth, and many companies fell into losses. However, when the China Chemical Industry News reporter interviewed, they encountered several carbon black companies that were doing well. Their situation aroused the reporter's thinking.
Sun Xiurong, deputy general manager of Shandong Yinbao Carbon Black Co., Ltd., told China Chemical Industry News that despite the bad market situation last year, the company's carbon black business was basically flat and there was no loss. Asked why, Sun Xiurong said that the carbon black plant built in 2003 was actually used for the tire factory at that time. Every year, one-fifth of the carbon black is used by its own company, while the rest is sold domestically and some is exported. The DCS used in the company's production process is imported from the United States, which can automatically control and adjust parameters, and has safety interlock control, so that the quality of the product is guaranteed. For many years, the company's products have been mainly used in all-steel and semi-steel radial tires. In recent years, the radial tire market has gradually expanded. Although the competition for carbon black homogeneity is fierce, the stability and high quality of the company's product quality ensure the stability of customers , So it's still manageable, and there is no price war like small businesses. At the same time, the steam generated in the production of carbon black can be used in the vulcanization process of tire companies, realizing a circular economy and reducing costs.
Similarly, Hongte Chemical (Group) Co., Ltd. has withstood the test in the competition in the carbon black market. Xu Zhenxing, who is in charge of sales of the company, told the China Chemical Industry News that the company selected asphaltene and free anthracene oil, medium anthracene oil, and light anthracene oil as the raw materials for the production of carbon black, and various brands of carbon black ash content and 45 micron sieve has less residue, high quality and high quality. It is suitable for rubber products such as tires with better performance and higher requirements for raw materials. One-third of the products are exported.
Xu Zhenxing said: "Despite the overcapacity of domestic carbon black, many small companies are taking advantage of price to seize the market, but we have not done so. We send the exhaust gas generated during the carbon black production process to the exhaust gas boiler for combustion for power generation. , While ensuring its own electricity consumption, there is still a large amount of surplus electricity supplied to the grid and outside, reducing the production cost of carbon black."
Industry insiders pointed out that there are not a few industries like carbon black in China. There are many repeated constructions of low-level equipment in the industry. The homogeneity of enterprise products is serious, the brand effect is lacking, and sales are not smooth, resulting in poor profitability and product utilization. Low. Under this circumstance, once the market changes, it is difficult for companies to resist and it is easy to disappear in the wave of market integration. Therefore, no matter what the market situation is, only by mastering technological advantages, producing high value-added products, and ensuring the stability and quality of the source of customers, can we gain a foothold in the market and experience various waves.
Tire: Different marketing methods have different benefits
In recent years, the market and profit margins brought about by the development of e-commerce have attracted more and more traditional industries to join, changing the traditional marketing methods and the profitability of enterprises. Tire is one of them.
Xiao Weizhong, president of Beijing Maitel Information Technology Co., Ltd., told the China Chemical Industry News that for a long time, the sales model of the tire industry has been from manufacturers to wholesalers (provincial and prefecture-level) to retailers, and finally into thousands of households. However, this model needs to be supported by high gross profit, and each level of agents needs to be profitable, so consumers have to pay high transaction costs for this, and it is difficult for consumers to feed back their consumption information to manufacturers, leading to industry information transmission distortion. However, with the increase in production capacity of the tire industry, the market has entered a stage of full competition. The profit of tire wholesalers may only be 2%. Coupled with the increase in the purchase channels of consumers and the increase in bargaining power, the existing sales model must be changed. Many tire companies have begun to explore and try.
According to Xiao Weizhong, there are currently three main types of online transactions for tire manufacturers in my country: the first is to leverage third-party e-commerce platforms-Tmall, JD, etc., such as Bridgestone and Zhongce Chaoyang to try to open stores on Tmall , This is a B2C model, mainly to increase the exposure of the brand and provide a certain source of customers for dealers. The second is that manufacturers have their own independent online business platforms, such as Michelin's Chijia system. This is also a B2C model. E-commerce is relatively easy, but development requires strong brand support. The third is to leverage the third-party tire industry e-commerce platform transaction service center, such as Mytire.com. This is the M2S model, mainly for new brands to realize the docking of manufacturers and terminal dealers.
"However, compared with foreign countries, the online transaction volume of my country's tire industry is still very small. At present, foreign tire e-commerce accounts for about 10% of the overall market, while domestic tires may not reach 5%." Xiao Weizhong told China Chemical Industry News reporter. For example, Delticom, the leading online tire trader in Europe, was founded in 1999. It has 128 online stores, 7663 service points, 100 brands, 25,000 models and specifications in 42 countries, and its sales in 2013 exceeded 5 billion euros. According to this trend, the domestic tire e-commerce market can reach more than 40 billion yuan in the next five years.
In addition to the development on the Internet, a reporter from China Chemical Industry News found that some influential domestic tire companies, distributors and forward-thinking retailers are also constantly exploring the marketing of emerging communication tools such as WeChat. The leading company Goodyear is an example, and Chen Bin, the founder of the private enterprise Shandong Dongda Tire Chain, is also one of them.
In the field of truck and bus tires, Goodyear is the first brand that attaches importance to WeChat marketing. Since its launch in August 2013, Goodyear has accumulated a large number of fans. At the same time, Goodyear has also continued to innovate on WeChat content and set up content and functional modules. There are 7 modules including membership registration, star products, retail store information inquiry, tire use certificate letter, Goodyear tire classroom, brand activities, and point redemption. For example, in the Goodyear Tire Classroom module, the user's trust in the Goodyear brand is enhanced by spreading some knowledge about tire usage and maintenance.
Entrepreneur Chen Bin uses QQ groups and WeChat as work and marketing tools. Now he has several big QQ groups including China Tire Super Group, China Tire Alliance Group, Shandong Tire Industry Association Group, which has already included the tire industry. Nearly 10,000 people, and he also operates WeChat public platforms such as China Tire, Tire Studio, Dongda Tire Chain, China Tire Alliance, and has accumulated tens of thousands of fans in the tire industry.
Liu Yishi, executive director of Beijing Solar Eclipse Advertising Co., Ltd., told China Chemical Industry News that in the future, the concept of regionalization will be gradually broken in tire sales. There is no concept of regional agents in the tire industry in the United States.
Xiao Weizhong also predicts that the channel level of big brands will be further reduced in the future, and the value of retailers will be further enhanced. Thanks to the brand's strong appeal among consumers and the support of distribution and installation services in many brand dealerships across the country, the e-commerce platform led by strong manufacturers will develop rapidly. At the same time, tire trading service type platforms will also have great development opportunities. Because there are many brands of Chinese tire manufacturers, weak brands can survive and develop only by greatly shortening the channel links, which provides opportunities for intermediary platforms.
Natural rubber: different production and sales links have different benefits
In 2013, the trend of natural rubber also really surprised many people in the industry. The price of crazy rubber fell below the line of 17,000 yuan/ton from its highest point in February 2013 at 27,040 yuan/ton, and the price per ton fell more than 10,000 yuan. Traditional rubber traders (referring to only one-sided stocks) complained again and again. However, rubber manufacturers frankly admitted that despite the decline in profit margins, profits are generally good and have little impact, because rubber prices are low, and their receipt prices are also low.
Li Shiqiang, general manager of Shanghai Shidong Trading Co., Ltd., told the China Chemical Industry News that for the upstream, midstream, and downstream of natural rubber, when rubber prices rise, intermediate traders make the most profit, and downstream tire and other manufacturing companies are under pressure, while rubber prices fall. At that time, the traditional trader in the middle was also the most injured.
According to a reporter from China Chemical Industry News, one or two months before the Spring Festival each year is the stocking period of domestic tire manufacturers, and demand will rise significantly. Therefore, many traditional traders increased their import efforts at the end of 2013, hoping to make a fortune in the stock market at the end of the year. This practice directly led to a sharp increase in my country's natural rubber imports in the fourth quarter of 2013.
What traders did not expect was that the stock market at the end of 2013 was extremely bleak, and tire manufacturers’ willingness to purchase raw materials fell to the bottom. Inventories in Qingdao Free Trade Zone rose sharply.
"For the entire year last year, under the suppression of financial arbitrage trade, the traditional trader's profit model of relying on channels and the difference between purchase and sale prices failed. Every time they make a profit, they have to continue to import for the purpose of lowering costs and maintaining capital operations. This not only pushed up the inventory, but also made the traditional traders have been completely defeated by the financial arbitrage trade, and they were on the verge of survival." Li Xiangou, chairman of Qingdao International Rubber Trading Market Co., Ltd. pointed out.
Li Shiqiang also holds the same view. He said that traditional rubber traders are facing survival problems in the current trading environment. The market rule is the survival of the fittest. How to realize their own value and vitality in the cruel baptism is fundamental. At the same time, it reminds the current trading risks with small traders and beware of them. Extreme behavior before bankruptcy.
At the same time, Li Shiqiang reminded that we should pay attention to the feedback of rubber farmers after the start of the new harvest season. Yunnan rubber farmers have issued strong voices of dissatisfaction and must boycott short-sale rubber behavior. Although it is invalid, we need to consider the impact of current prices on the lives of rubber farmers. In addition, we need to pay attention to whether overseas rubber manufacturers will reduce their operating rates in the following months.
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