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Miao Bin Interpreted The Trends Of Bathroom Industry In 2021 And The Direction Of Development In 2022
The following article is from China Building and Sanitary Ceramics Association Author in building ceramic association
In 2021, many enterprises in the building ceramic and sanitary industry have experienced ” frozen and fire “. Because of the macro-control of real estate and double carbon, double control policy, in the past 2021, the mood of the majority of the industry in the building ceramic sanitary ware industry is mixed. These are very vague about the next development situation of the industry.
In the past 2021, what changes in the ceramic industry has experienced? In 2022, what is the next development of the industry? At the end of the year, China Building Ceramic Sanitary Ware Industry Media Center, in conjunction with China Building Materials, made an interview with Miao Bin, president of the China Building and Sanitary Ceramics Association. He explained the operation of the industry in 2021 and the direction of development in 2022.
One, In 2021, The Industry’s Development Is Stable, Stable And Worrying
2021 is the first year after China entered a moderately prosperous society, and is also the “14th Five-Year Plan” the first year. China Building and Sanitary Ceramics Association issued a guide to the development of building ceramics and sanitary ware industry during the “14th Five-Year Plan”. This opinion made a general assessment of the industry development in the “Thirteenth Five-Year” period. In the thirteenth five-year period, the industry has made great progress in transforming the development mode, activating endogenous power, promoting structural adjustment, making up for the shortcomings of development, promoting scientific and technological innovation and technological progress, accelerating energy conservation and emission reduction and green development, accelerating the pace of going out, and enhancing international competitiveness. The industry has undergone profound changes in the layout of production areas, technical equipment levels, enterprise-scale structure, product structure, sales channels and other aspects. However, along with the development of the industry, they also exposed the following problems: insufficient efforts to eliminate backward production capacity, R & D innovation capacity to be improved, the ability to respond to market changes is weak, etc. In the Central Economic Work Conference just held, the judgment of the current situation put forward fits well with the actual situation facing the industry.
FIRST, DEMAND CONTRACTION. The demand for building ceramic products in the “Thirteenth Five-Year” period reached its peak. The development of the building ceramic bathroom industry and real estate is closely related. For so many years, more than 90% of the national production of ceramic tile products are applied in the domestic market. From 2018 onwards, the national demand for ceramic tiles quickly entered the downward channel, falling to less than nine billion square meters. It hovered around eight billion square meters in the past few years. From the perspective of the application market of ceramic tiles, it is clear that the national real estate market demand is contracting. The national production of sanitary ware has remained basically stable. Strong demand from foreign markets partially compensated for the impact of the decline in the domestic demand market.
THE SECOND, IS THE SUPPLY SHOCK. A supply shock is involved many areas, not only the building ceramic sanitary ware industry. Of course, our industry feels very strong, bearing the brunt of the rise in energy prices. Before, the gas price is cheap when it is about two. At the time of high prices, some areas reached more than seven yuan! The price of coal went from seven to eight hundred dollars per ton at low prices to more than three thousand dollars at the highest. And of course, there were power cuts and restrictions. The impact of supply shock on the industry is very huge, resulting in many enterprises’ profits decline or even losses.
THIRD, THE FORECAST TURNED WEAK, WHICH IS THE INDUSTRY’S MOST DISTRESSING PROBLEM. The first two problems are already happening. The third affects everyone’s confidence in next year and future development. Confidence is more important than gold. Given the weakening forecast, many entrepreneurs are worried about the development prospect and don’t know what to do. But they are very clear that the expected decline means that the future demand of the market will shrink and the share of the cake to be reduced.
Recently, there has been a “lightning” incident in which “Evergrande” and some real estate companies paid off their funds, which hurt the industry. Many companies and dealers have been affected. Our industry may be affected by the loss of more than ten billion. Some people are in a panic and worried: will this be the “title song of the storm”?
For most companies, 2021 is not a quiet year. The rapid changes in the market – that is, there has been a flurry of orders to receive the joy and excitement, but also experienced anxieties about the future uncertainty when sales are in the doldrums. Before the end of the year, most of the construction of ceramic enterprises have been shut down, reflecting the confusion and wait-and-see mood of many enterprises for the coming year.
From the time dimension, the industry’s operating situation in 2021 presents the characteristics of the former hot and then cold. In the first half of the year, the industry’s operating situation was quite good, with three factors. The first factor is that in the first half of the year, the domestic epidemic situation was clear, plus it was the traditional season of high demand. Second, 2021 is the opening year of the 14th Five-Year Plan. In general, according to the law of China’s political and economic development, the economy will have a small climax in the opening year of each five-year plan. Thirdly, as the global economy recovers, foreign demand is particularly active. Many enterprises doing foreign trade are bursting with orders. Of course, foreign trade enterprises also have hardships: the price of raw materials, an increase in transport costs, a sharp contraction in profit margins, etc.
After the Spring Festival this year, market demand is strong across the country. The off-season also came relatively quickly. In the market in May and June, sales were significantly weaker. After entering the third quarter, especially by the impact of the Evergrande incident, market sales gradually entered the “cooling off period”. After entering the fourth quarter, sales were even more sluggish, and enterprises in various production areas began to stop kiln production.
In the fluctuating market situation, the leading enterprises have generally performed well in dealing with the market impact, and are still seeking to expand production capacity and expand market share. Their competitiveness is increasing, showing the advantages of large enterprises in technology, capital, anti-risk capacity, etc.
This year, sanitary ware enterprises are relatively less affected by the market changes than ceramic tile enterprises. The main reason is that the overall demand for the sanitary ware market continues to remain stable, or even a small increase, especially the international market has a strong demand for Chinese sanitary ware products. Along with the gradual recovery of the world economy from the impact of the COVID-19 epidemic, the foreign trade situation of Chinese sanitary ware enterprises in 2021 is very good.
In general, the overall operating situation of the whole industry in 2021 is steady with progress and steady with worries.
Second, How Will Companies Develop In 2022? Cover The Money Bag, Accelerate The Pace Of Innovation And Find Your Place
Despite all the difficulties, China has the world’s largest demand market. China’s economy has strong resilience. In the context of China’s sustained economic development, the industry’s development prospects are still promising, but certainly, not all companies will survive. In the next few years, the competitive environment of “survival of the fittest” may be more “cruel”.
For the work of the Association, we need to do a better job of service, go deep into the enterprise and the production area to understand the development trend of the industry, carefully study and understand the government’s policy guidelines, guide the enterprise scientific decision-making, and lead the healthy development of the industry.
In the “Thirteenth Five-Year Plan” period, nearly a quarter of the pottery industry enterprises exited. In the “Fourteenth Five-Year” period, the proportion of withdrawal may be higher. Especially in the context of the double carbon, it will accelerate the reshuffle of the industry, but also means that the concentration of the industry will rapidly increase. The industry will appear more tens of billions of large enterprises.
The future is bright, the road is winding. This truth seems to be known to everyone. How will the market be next year? How to survive difficult times? This is the question mark in the minds of many people and the answer they want to know.
First, cover the money bag in order to ensure the safety of business cash flow. This is perhaps more important than anything else at the moment. The word “stability” is the general tone of the country’s economic work next year. With many uncertainties in the development environment, enterprises should operate steadily and develop steadily, especially to avoid blind impulses and reduce unnecessary losses.
Second, we should increase innovation, whether it is technological innovation, product innovation, or model innovation. The association has been encouraging and advocating technological innovation for many years. Since 2015, it has been organized every year in the industry to declare and evaluate the Science and Technology Innovation Award, to guide enterprises to accelerate the pace of innovation, increase innovation and promote the high-quality development of the industry.
The ceramic sanitary industry belongs to the field of a large home. The extension of product lines and the extension of the industrial chain to the “home” development is an important way for enterprises to become bigger and stronger. In the past, consumers are used to buying and using a single product. Now and the future development trend is to take the whole space as a product. If companies do not adapt to this shift to better meet the needs of future consumers, they will fall into passivity. Now, we all notice that leading companies are extending the concept of “big home” in different ways. Some try to enter the whole installation, assembly, and some start to do no-burn materials, etc.. This requires technological innovation, product innovation, and business model innovation. Without innovation, the enterprise will have no soul, no development momentum, and lose the source of life.
Third, improve as much as possible the level of digital, intelligent production. As a traditional industry, ceramic sanitary ware enterprises face difficulties in recruiting workers and the cost of labor has increased significantly. These problems are increasingly restricting the development of the industry. Although in the “Thirteenth Five-Year Plan”, the per capita labor productivity of ceramic tile enterprises increased by 50% and the per capita labor productivity of sanitary ceramics enterprises increased by 30%, it is still difficult to keep up with the pace of national economic development, far from meeting the needs of employees to improve the working environment. According to the “14th Five-Year Plan”, the per capita labor productivity of the whole staff of the ceramic (including rock slabs) enterprises should exceed 1.2 million yuan. The per capita labor productivity of sanitary ceramics enterprises exceeded 600,000 yuan, an increase of 50% on the basis of the “Thirteenth Five-Year Plan”.
Machine replacement is the path to the development of architectural ceramics and the sanitary ware industry. A few years ago, it required 200 to 300 workers for a ceramic tile production line, but now the most advanced domestic ceramic tile production line only needs 50 people. The latest domestic sanitary ceramics production line with more than 50% less labor than in the past. The labor conditions of employees greatly improved, and labor productivity increased significantly. Of course, the cost of investment in new production lines is also much higher. In the “13th Five-Year Plan” period, the industry has made great progress in digitalization and intelligence, further reducing the gap with foreign advanced levels.
Over the years, the industry has made a lot of progress, but we are also conscious of the large gap that still exists compared to advanced countries. The most prominent is reflected in the innovation capability, especially in the original and basic research of major key technologies. On the other hand, the gap in design. Ceramic sanitary products are both functional products, but also have strong decorative attributes, and decorative attributes give the product a higher added value. In the field of product decoration design, it is still the European and American design concepts and styles dominate. We are more in learning and following.
Many enterprises face a very big problem – that is, the added value of the product is not high, and the brand power is not enough. Compared with others, there is a gap in product quality and workmanship details. In many aspects, the details determine success or failure, so we have to promote the spirit of craftsmanship. We have to settle down and do a good job with our products. We have to do a good job of service and polish the brand. This can not be done overnight. Now the state encourages “specialization and special new”, and advocates the cultivation of the industry’s single champion, which requires solid work to get the details right.
The year 2022 is an important year for China to embark on a new journey of building a modern socialist country and marching towards the second-century goal. In the new year, we will continue to take technological innovation and brand building as the driving force, focus on high-quality development, take “carbon peak, carbon-neutral” as the direction, take industrial restructuring, extend the industrial chain and “Internet+” application and promotion as the way, focus on Value-added services, promote energy saving and comprehensive utilization, and promote the industry to green cycle low-carbon, innovation-driven and high-quality and efficient development and upgrading. China Building and Sanitary Ceramics Association will continue to play a leading, coordinating, service role in empowering enterprises and escorting the sustainable scientific development of the industry.