On March 25, 2014, the radial tire of the first project of the Zazo project of a tire company in Guizhou was officially vulcanized out;
On April 9, a privately-owned tire listed company issued a non-public stock issuance plan, plans to raise no more than 1.2 billion yuan in funds, all of which are used to annually produce 15 million large-capacity high-performance radial tire tire projects;
On April 10th, the first product of a 10 million semi-steel radial tire project of a tire company in Shandong was successfully rolled out;
On April 20, a tire company in Jilin Province broke ground with an annual output of 15 million semi-steel radial tires.
In May, Anhui's semi-steel radial tire project was put into production...
In the first half of the year, various projects in the tire industry in China were started and put into production. The development of the industry was 'red fire'. However, on the other side, the average operating rate of tire companies in China is below 75%, and the overall profit growth rate of the industry is even more pronounced. This contrasts with the aforementioned 'Red Fire'.
The development of the tire industry in China today, the expansion of production capacity or control, not only test the ability of the government sector and the overall situation, but also test the wisdom of the industry companies.
Is the investment overheated?
In the tire rubber industry, Dawang Town, which is located in Guangrao County, Shandong Province, is unknown to all. It is the gathering place for China's tire production. After rapid development in recent years, the production capacity of Dawang Town's tires has rapidly doubled, and local land and environmental resources have reached the limit.
After the Spring Festival last year, a new tire production base in Linyi City, Shandong Province, gradually showed itself in the eyes of people in the industry. It not only attracted the expansion project of tire companies in Guangrao area, many new companies settled in Linyi, and several related companies discussed. Or consider. Many people in the industry believe that Linyi is very likely to become the second 'Dawang Town' of Chinese tires.
The investment in other old tire companies outside of these two regions is also very high. Exquisite, triangular, Yinbao, Double Star, Bayi, Sai Wan, Wanda, Wanxin, Luohe, and Sen Qilin are all expanding. Steel production capacity or new semi-steel project. According to preliminary statistics, there are more than 20 new and expanded tire projects in Shandong recently. According to Zhuo Chuang Information Monitoring, since last year, Shandong has expanded 30 million sets of steel tires, and has expanded more than 280 million semi-steel tires.
Tire plant investment tires in other parts of the country are not weak. It is difficult for the whole country to find a radial tire enterprise that does not expand production. At the same time, five or six companies that have new projects have emerged. Hangzhou Zhongce Rubber Co., Ltd. has recently been developing at a rate of 2 million sets of all-steel tires and 5 million sets of semi-steel tires each year.
Shandong Rubber Industry Association statistics on its 39 member units, in 2013 produced 24229.24 million radial tires, an increase of 42.61% over the previous year. Among them, 33 all-steel radial tire production enterprises produced 62,289,700 full-steel tires, an increase of 18.66%; 24 semi-steel tire production enterprises produced a total of 17,977,200 semi-steel tires, an increase of 53.39%.
According to statistics from the Rubber Machinery Professional Committee of China National Chemical Equipment Association, from the current status of tire equipment purchases, China will add 15 million sets of steel tire production capacity and 150 million pairs of semi-steel tires in 2014.
China's tire investment is overheating, which is almost the consensus of all people including tire investors. Deng Yalu, president of the China Rubber Industry Association, believes that at this pace of development, tire investment will seriously overdraw the potential of China's tires in the future, which is not conducive to the long-term healthy and stable development of the industry.
Excessive capacity
As to whether China's tire production capacity is surplus or not, to what extent it is surplus, the industry has no unified conclusion yet. Deng Yalu believes that the structural overcapacity of China's tires is certain. The overcapacity of low-end homogenized tires is serious, and the high-end and green tires still have much room for development.
According to the statistics of the China Rubber Industry Association, in 2013, the cumulative production of all-steel tires in China was 107 million and 369 million semi-steel tires. However, from the equipment export statistics, the China National Chemical Equipment Association’s rubber machinery professional committee reported that by the end of 2013, China’s total steel tire production capacity will exceed 150 million, and semi-steel tire production capacity will exceed 450 million; by the end of 2014, China’s all-steel tire production capacity Will reach more than 165 million, semi-steel tire production capacity will reach more than 600 million. The gap between actual production capacity and demand is large, and the overall surplus of tire production capacity is indisputable.
Moreover, at present, the operating rate of China's tire companies is about 80%, and the operating rate of most small and medium-sized tire enterprises is below 70%. Faced with such a low operating rate and the rapid development of the automotive industry, even those who are optimistic about the future of the industry have to admit that the current tire production capacity is indeed excess, and the industry is 'beating'.
'Especially for medium and low-end products, even if no new capacity is added in the next few years, I am afraid it will not be able to slow down. "The deputy general manager of Shandong Haoyu Rubber Co., Ltd., who has been dealing with tires for decades, said Li Jingquan, executive deputy general manager.
However, Chairman Li Enfa of Shandong Hengfeng Rubber & Plastic Co., Ltd. has another opinion: 'From the current difference between China's tire production capacity and actual production, there is indeed a suspicion of surplus, but from the tire development and global perspective, the tire may not be surplus. Our country has implemented policies such as urbanization. The demand for vehicles in rural areas may be like that of mobile phones, and the market is rapidly increasing. And now that China's tires are being globalized, a good price/performance ratio may increase the competitiveness of China's tires in the international market. At present, China's tires have a global market share of about 25%. If the global market share is calculated at 50%, there is still room for China's tire development. '
A considerable number of companies in the industry believe that in the domestic market, semi-steel tires are currently domestically owned 30% and foreign investment 70%. China's semi-steel tire development can follow the development of all-steel tires and there is still ample room for development.
Should not stop or limit
In January this year, the Shandong Provincial Government’s executive meeting in principle passed the “Implementation Opinions on Resolving the Contradiction of Serious Overcapacityâ€. According to this document, in the future, Shandong Province will no longer approve and record new capacity projects in industries with serious overcapacity, and will strive to effectively eliminate excess production capacity including tires within five years.
As soon as the document was published, some domestic media applauded this idea, believing that it is conducive to rational investment in the industry and healthy development; it will help the industry to eliminate backwardness and transform and upgrade; it will facilitate mergers and reorganizations of the industry and become bigger and stronger; and it will help inhibit excess capacity in the industry. New projects will be reduced.
However, Shandong's major tire companies are almost unanimously opposed. Shandong Rubber Industry Association also believes that the suspension is not appropriate. Associations and enterprises have repeatedly reported to the Provincial Development and Reform Commission that, at the end of March in Shandong Province, to resolve the overcapacity deployment meeting, the tire industry investment stopped and restrictions were hardly mentioned, and the suspension of documents became a dead letter.
Zhang Hongmin, chairman of Shandong Rubber Industry Association, told reporters that at present, Shandong tire investment is indeed suspected of overheating, proper control and guidance should be appropriate, but stopping is not desirable. Tires are labor-intensive economies of scale. Stopping is not conducive to the expansion of Shandong tire companies, which is not conducive to the adjustment of product structure by Shandong tire companies. At the same time, the suspension or restriction of tires should not be limited to Shandong, but should be a national chess game, or Shandong enterprises to invest in other provinces, this will not be effective.
Shandong's small tire companies are firmly opposed to stopping investment in tires, but support the government to take measures to restrict, in particular, restrictions on new tire entry; Some large tire companies also oppose the suspension of tires, that this is not conducive to corporate development, will expand and other countries Big tire factory gap.
How to resolve conflicts
On the one hand, it is the fact that there is excess production capacity. On the other hand, there is a demand for investment expansion in enterprises. How can the contradiction be resolved? The views and actions of companies in the industry are bright.
Feng Wang, chairman of Henan Fengshen Co., Ltd., believes that the imperative is to speed up the "tire industry access conditions" and "green tire industry self-discipline" implementation. The focus of Henan Fengshen’s development in recent years is to promote tire green manufacturing, becoming the only company in China that promotes green tires globally. The radial tire products that are sold globally include all-steel tires, all-steel tires and passenger vehicle tires are all made in green. .
Delta Group's approach is product upgrades. 'We resolutely eliminated 3.5 million traditional bias tire production lines and stopped 3 million low-end passenger car radial tire production lines. 'Ding Yuhua, chairman of the Triangle Group, said, 'Instead, the triangle is building a new high-tech, low-carbon green product line, the development of ice and snow tires, commercial vehicle tires and other wear-resistant products, the income prospects are good. '
The focus of Linglong Group and Xingyuan Tire Group is on innovation. In the new 12 million high-performance semi-steel radial tire project, the Linglong Group first adopted the pre-curing technology of the carcass electron radiation meter. This technology can reduce the weight of the carcass by 1.5%. This alone can save more than 540 tons of rubber material each year and create more than 2000 million yuan of profits. Xingyuan Tire Group has developed a series of all-steel radial tires with more than 130 varieties of more than 80 specifications and more than 80 varieties, and has established more than 100 sales points throughout the country, forming a sales network covering more than 30 provinces in China; last year Xingyuan Tire also signed a technical cooperation agreement with Yokohama Rubber Co., Ltd., and will jointly develop products with a size of 25 inches or more, and incorporate the advanced technology of Yokohama into Hingyuan's R&D and production processes.
Double Star Tire invests 3.5 billion yuan to build an intelligent demonstration base for green tires. The project is based on environmental relocation, transformation and upgrading, and builds a tire project with an annual output of 10 million sets of high-performance radial passenger car tires and 5 million sets of high-performance radial passenger car tires and automatic rubber and plastics. 1300 sets of machinery / year, 600 sets of automatic casting machinery / year equipment manufacturing projects.
Race Wheels and Shuangqin Group placed major investment on mergers and acquisitions. Race Wheels has acquired Shenyang Peace Tire and Shandong Jinyu Tire. The company's sales revenue has grown rapidly and it has become China's Tire 1st echelon; Shuangqin Group has successfully acquired Xinjiang Kunlun Co., Ltd., and is negotiating with a tire company in the north for the acquisition.
Zhang Hongmin believes that the acquisition and reorganization is an effective way to increase industry concentration and resolve excess production capacity. 'The total number of domestic tire companies is more than 500, Shandong has about 300, and small tire factories with an annual output of 500,000 or less account for nearly half of the total. At present, the tire industry in Shandong is characterized by a large but not strong, extensive, and not refined. In 2013, Bridgestone, one of the world's three tire giants, achieved sales revenue of US$28.6 billion, equivalent to 60% of the total tire industry revenue in Shandong. This shows that the industrial concentration of the tire industry in our province needs to be improved. 'Zhang Hongmin said.
Chen Yuguang, director-general of the Taiwan Rubber Industry Union, said that from the development experience of the tire industry in Taiwan, the government should pay more attention to the social and environmental benefits of the region and strictly implement the energy conservation and environmental protection policies. This will ensure fair competition and create an institutional environment for the survival of the fittest.
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