The hottest crisis comes to China's glass industry

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The crisis came to China's glass industry with challenges. At present, the once-in-a-century financial crisis triggered by the U.S. subprime mortgage crisis has caused severe turbulence in the international and domestic financial markets, and the stock market, futures market, foreign exchange market and insurance market have been seriously impacted. Due to the close linkage between the domestic glass market and the international glass market, the glass industry is obviously unable to survive the financial crisis. The impact and challenge of this storm on the development of China's glass industry can not be ignored

one of the challenges is the decline in growth rate. The financial crisis has led to a decline in the prosperity of the glass industry. At present, under the dual effects of economic cyclical adjustment and the impact of the 2 π financial crisis, the glass industry as a whole has accelerated its decline. In 2008, the annual output of flat glass was about 5. 700million weight boxes, a year-on-year increase of about 5. 1%。 This is the first time in the past 10 years that the growth rate of glass production has slipped to single digits. According to the statistics of the Information Department of China Building Materials Federation and China building glass and Industrial Glass Association, in 2009, the downward trend of national glass production growth was more obvious. Glass production in Hebei, Shandong, Henan, Guangdong and Zhejiang decreased. The growth rate of glass production in Henan fell

the second challenge is demand reduction. The main reason for the decline in the growth rate of China's glass production in 2008 is the reduction in market demand. In recent years, the three major engines driving the glass industry - real estate, automobile and export have declined significantly due to the impact of the international financial crisis, which has led to the synchronous response of the glass industry. In March this year, 60 key glass enterprises in China produced 31.26 million weight boxes of float glass, and 93.09 million weight boxes of float glass were produced from January to March. Compared with the same period in 2008, the cumulative output decreased by 7. 12%。 The provinces with the largest cumulative output are Hebei Province with 16.64 million weight boxes, Shandong Province with 10.25 million weight boxes, Jiangsu Province with 10.21 million weight boxes, Guangdong Province with 9.88 million weight boxes and Zhejiang Province with 8.95 million weight boxes

the third challenge is that the price decline is closely related to the glass industry. The real estate industry is facing a severe winter, and the glass market is also in a depression. In this financial turmoil, China's glass market, along with the fluctuation of the RMB exchange rate and the international financial market, glass prices have declined in line with the international market. After September last year, the glass price in Shandong fell back, and the glass price in the whole province continued to decline in October. After the price of flat glass fell to the lowest point in recent years in the fourth quarter of 2008, the overall price remains at the bottom

the fourth challenge is the shortage of funds. The financial crisis has led to a significant increase in enterprise inventory and capital risks. Since the beginning of this year, the glass production and sales rate has decreased, and the inventory has increased, which accounts for 20% of the capital. Although the sales volume of flat glass rebounded in October and the inventory at the end of the month decreased compared with the previous month, it still increased by 11.09 million weight boxes compared with the same month last year, mainly due to the backlog of common float glass. The current situation of market sales is still not optimistic for the flat glass industry with excess production capacity of ordinary float glass. The liquidity contraction caused by the financial crisis has affected the payment capacity of some enterprises. In terms of capital withdrawal, after the export of glass products, affected by the crisis, it is difficult for the purchaser to ensure the timely withdrawal of funds, and the increasing amount of arrears and delinquencies from abroad have affected the earnings of some export-oriented glass enterprises. According to the survey, due to the impact of the financial crisis, some glass enterprises have significantly increased their capital risks due to inventory and other factors

the fifth challenge is that the export is blocked. The financial crisis has led to a great impact on the export of enterprises. China's glass industry is mainly export-oriented enterprises that are impacted by the data. The financial crisis in the United States triggered the global economic crisis, resulting in the shrinking demand of countries around the world, which directly affected the export of China's glass products. As an export-oriented economy, China's main export markets are the United States and the European Union. At present, the financial storm has impacted on the real economy of the European Union, and the American economy is also sliding to the edge of recession. The trade surplus between China and the United States has decreased significantly, which has had some impact on the product export of China's glass enterprises. Some glass export enterprises complain endlessly. The financial crisis has led to a decrease in orders, and many enterprises are underemployed. In recent years, some glass enterprises in China have gone global. Although the assets of these enterprises abroad are not large compared with the total assets of the enterprises themselves, the financial crisis has led to a large proportion of losses of China's overseas glass enterprises, and the assets have gradually shrunk under the effect of the financial crisis

the sixth challenge is the difficult operation. The financial storm has further worsened the operating environment of glass enterprises, making them more and more difficult to survive. In general, the sharp rise in the prices of production cost components such as equipment spare parts, raw materials, auxiliary raw materials, logistics costs and human costs involved in the production and operation of glass enterprises has made the production costs of enterprises go up and eroded the profits of enterprises. After September last year, it was even more severely hit by the financial storm. By the end of March this year, more than 40 domestic float glass production lines had stopped production. Some small factories that rely on large enterprises to transfer orders or support large factories are even more difficult to sustain their business, and some have even been shut down. It is a common way for glass enterprises to carry out fatigue tests due to the double squeeze of rising costs and low product prices. The profit margin of glass enterprises has decreased significantly and the loss has increased. The glass industry started to lose money from the profit at the beginning of last year to the fourth quarter of last year, and it still hasn't recovered

the financial storm provides opportunities for the development of China's glass industry

however, it should be noted that the US financial storm not only brings challenges to China's glass industry, but also provides rare opportunities for the development of China's glass industry

one of the opportunities is industrial integration. The global financial crisis has led to low enterprise valuation, providing a good opportunity for domestic enterprises with relatively insufficient resource reserves to carry out mergers and acquisitions, but their prices are also high. Resource integration and international expansion can be completed. From the perspective of the prospects of the glass industry, the scale, liquidity and diversification will reappear, and companies with a high degree of diversification and large-scale enterprises will have more channels for external financing, while small enterprises will undoubtedly be eliminated. The glass industry will increasingly show the advantages of mass production. Crisis is also a good opportunity for glass industry integration

the second opportunity is that the policy is favorable. In response to the financial storm in the United States, the country has adopted various policies that benefit enterprises, such as reducing taxes, financing, encouraging exports and expanding consumption, which will bring benefits to glass enterprises. In particular, the 100billion yuan investment allocated by the state to further expand domestic demand is aimed at affordable housing projects, rural livelihood projects and agricultural infrastructure, infrastructure construction such as railways, highways and airports, social and public utilities such as education and health, ecological environment construction, accelerating independent innovation and structural adjustment of enterprises, and the recovery and reconstruction of earthquake stricken areas. More importantly, the 4trillion yuan economic stimulus plan is used for the recovery and reconstruction of the earthquake stricken areas, rural livelihood projects, rural infrastructure, ecological environment, affordable housing projects, etc. the major investments of these countries will stimulate China's glass market and play a huge role in promoting the development of China's glass industry

countermeasures for the future market

building confidence, overcoming difficulties and overcoming the crisis are powerful weapons to deal with the current world economic turmoil and financial crisis. Enterprises rely on confidence to stabilize market expectations, and rely on confidence to tide over difficulties. The once-in-a-century financial crisis has put forward higher requirements for enterprise leaders. Instead of considering problems with conventional thinking, we should soberly grasp market changes and seriously plan development strategies. At present, we should pay special attention to the four key factors: raw materials, technology, market and finance

reduce production and guarantee prices, speed up sales, and withdraw funds. The building materials industry, like the real estate industry, is an industry that relies heavily on funds. Many small and medium-sized enterprises operate in the mode of bank lending. Once 'money' is tightened, it will inevitably affect the cash flow of these enterprises. At present, 'reducing production and ensuring price and accelerating sales' has become the common choice of many glass enterprises. Some large glass enterprises have introduced measures to limit production. More and more small and medium-sized glass enterprises can not bear the pressure and choose to stop production and go out of business. In view of the fact that glass prices have fallen, some enterprises have set minimum prices to limit glass sales prices in order to obtain good benefits. We should strengthen the return and flow of funds. Export oriented glass enterprises should pay attention to preventing the risk of foreign exchange collection in export. According to the credit status of the other party, make corresponding export credit insurance; Ask for payment and deliver goods to new customers. Glass enterprises in the domestic market should also guard against the risk of capital withdrawal, prevent capital precipitation and speed up the flow

unswervingly 'going out' and actively looking for blank spots' going out 'has become an inevitable choice for enterprises to cope with the financial crisis and seek better development. Although the financial crisis will not hurt the current industry. However, if the short-term credit mechanism in the United States cannot be started soon, American consumption will continue to shrink, which will have a great impact on China's export market. This storm makes it possible for our glass enterprises to 'go global' better. Because the rapid decline of global enterprise value provides important opportunities for acquisition and creates conditions for strengthening internal management and reducing costs. At the same time, after the baptism of the storm, the real value of overseas assets will become increasingly apparent. At this time, our overseas investment may be worth the money, which brings opportunities to China's powerful glass enterprises

encourage superior enterprises to reorganize, merge and acquire inferior enterprises. The reorganization not only saves inferior enterprises, but also makes them bigger and stronger. Mergers and acquisitions have a great relationship with the glass market. The lower the glass market is, the more conducive it is to M & A. after M & A has become a hot spot in the industry, it can accelerate the reshuffle and integration of the market

adjust the structure and constantly innovate. At present, the glass deep processing rate in China is only 30%, while the world average is about 55%, and that in developed countries is 65%~85%. The value-added rate after processing in China is only 2% of that of the original film. 5 times that of developed countries, so there is a big gap in deep processing rate and processing depth. All these provide a broad market space for glass enterprises. Especially safety glass and energy-saving glass, the annual growth rate is more than 30%. The financial crisis has brought new opportunities for the structural adjustment of China's glass industry. Therefore, in order to cope with the financial crisis and develop better, we must adjust the industrial structure, save energy and reduce emissions, and eliminate enterprises with high pollution and high consumption

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