"As the economic development enters the new normal of the medium and high speed and the strategic adjustment of China's economic structure, the actual consumption of steel has entered a period of low growth or even negative growth." In 2015, co-sponsored by the Metallurgical Industry Planning Institute and the China Institute of Metals At the 4th China High-end Forum on Steel Technology and Economy, Li Xinchuang, deputy secretary general of China Iron and Steel Industry Association and president of the Metallurgical Industry Planning and Research Institute, said that at present, China's steel industry is facing a slowdown in domestic and international economic growth and a weakening demand for steel consumption. Double extrusion, it is expected that steel production and consumption will enter the peak arc down zone in the “13th Five-Year Planâ€.
steel industry
Face five risks
Li Xinchuang pointed out that China's crude steel production has been in the peak arc down zone. From the medium and long term and overall perspective, it has already shown the trend of “arc top†+ “declining channelâ€. At the same time, domestic steel prices fell, and business operating efficiency was significantly different. In early September 2015, China Steel Industry Association's CSPI steel price index fell to 62.28, down 20.81 points from the beginning of 2015, down 25.9 points from the same period of 2014; steel companies' losses increased, and the loss from January to July was 46.53%. The loss amounted to 27.217 billion yuan, an increase of 181.95% year-on-year. After analyzing the current state of the steel industry from various aspects, Li Xinchuang believes that the operation of the steel industry faces the following five risks.
Production and consumption are entering the downside. Li Xinchuang said that in the next few years, the production and consumption of steel will enter the peak arc-down zone. As the market demand increases, users will put forward higher requirements for steel enterprises in terms of quality and service. The attraction of the steel industry to local development, capital and quality labor tends to decline, and the environment for survival and development is not optimistic.
From the perspective of the proportion of steel consumption in the major downstream industries, the construction industry and the machinery industry are still among the top two in terms of steel consumption, of which the construction industry accounts for more than half, and the machinery industry accounts for nearly 20%. From the perspective of long-term trend changes, the proportion of steel consumption in the construction industry has gradually declined, and the proportion of machinery and automobile steel consumption has gradually increased.
Resolving the serious overcapacity of production capacity into the deep water area, the task is more arduous. Li Xinchuang said that with the advancement of resolving the contradiction of overcapacity, the space for the reduction of existing measures has become smaller and smaller, and the difficulty is increasing. The risk of accumulation of debt handling and staff placement has gradually increased. In addition, the market-based exit mechanism for steel production capacity is imperfect, and the chaos of superiority and inferiority has not changed fundamentally. The policy-based efforts to reduce regional pressures need to be further strengthened and strengthened.
Business operations are difficult and differentiated, and the risk of capital chain scission increases. Since the "Twelfth Five-Year Plan", the iron and steel enterprises have been very difficult to operate. The sales profit rate of the steel association statistical enterprises has always been at the downstream level of the industrial industry. The data shows that from the "Guiding Opinions of the State Council on Resolving the Severe Overcapacity of Production Capacity" (Guo Fa [2013] No. 41), the total amount of accounts receivable and payables of steel enterprises increased from 525 billion yuan to 581.8 billion yuan. , an increase of 10.8%. Among them, accounts receivable increased from 112.7 billion yuan to 132.7 billion yuan, an increase of 17.8%. Li Xinchuang believes that under the condition that the output scale is basically the same, the increase in accounts receivable and accounts payable is obviously too fast, indicating that the debt risk of the steel industry is accumulating rapidly.
Not only that, the average flow ratio and quick ratio of steel listed companies are only 0.69 and 0.19, respectively, far below the normal level. The solvency of steel companies is already on the verge of risk. Some steel companies have been forced to shut down due to the break of the capital chain.
Environmental protection has maintained a high pressure, and corporate pressure is high. Li Xinchuang said that due to the high environmental debts of China's iron and steel enterprises, a considerable number of steel companies can not meet the new requirements of environmental protection, and they need to increase environmental protection investment, and production and operation costs will further increase. Especially in areas such as Beijing-Tianjin-Hebei, Yangtze River Delta and the Pearl River Delta that implement special emission limits for atmospheric pollutants, the environmental protection supervision faced by steel companies will be more stringent, and some steel companies will be forced to shut down due to environmental protection.
International competition is becoming increasingly fierce. At present, the global steel industry competition pattern is undergoing profound changes and adjustments. The new technological revolution characterized by the deep integration of the new generation of information technology and manufacturing industry is triggering far-reaching industrial changes, forming new production methods, industrial forms, and business models. It will definitely greatly enhance the competitiveness of the steel industry in the old powers. Some developing countries have also seized the opportunity of global industry division of labor, using local steel demand to accelerate growth, labor and resource advantages, etc., actively participate in undertaking industry and capital transfer, and expand international market space. China's steel industry is facing the severe challenge of “double extrusion†between developed countries and other developing countries.
Steel enterprise transformation focuses on five elements
Despite the grim situation faced by steel companies, some steel companies have achieved better development. Drawing on the successful experience of outstanding enterprises, Li Xinchuang proposed the five major innovation and transformation strategies of steel enterprises in terms of product structure, financing and debt reduction, technological innovation, management effectiveness and diversified development.
Products are specialized. At present, companies with higher profitability have formed product structures with their own characteristics and occupy a high market share. Li Xin created a proposal. In order to optimize the product structure, iron and steel enterprises should use production and application standards to upgrade and eliminate backward products, strictly implement industrial policies to eliminate outdated equipment, increase the production of large-scale products, and establish a life-cycle concept for steel use.
At the same time, enterprises should promote lean production, improve product quality and stability; extend the industrial chain, improve service levels; optimize processes and reduce operating costs. In addition, we must implement specialized production to achieve differentiated competition; develop high-end products, accelerate the construction of independent R&D systems, and intervene in advance to track downstream industrial upgrading.
Financing and debt reduction. Li Xinchuang said that reducing financing costs can use multi-faceted financing channels, including notes payable, bank credit, trade financing, capital increase and share expansion, loan guarantees, entrusted loans, overseas financing, corporate bonds, and financial leasing. He believes that financial capital should be used to support the development of the steel industry. From a strategic perspective, supporting the acquisition and sale of corporate assets can enhance industrial capital liquidity and enhance the overall market value of the enterprise; from an operational perspective, it can improve internal capital use efficiency and optimize external financing environment; from a business perspective, it can promote Product sales and market share expansion.
Li Xinchuang said that steel companies can optimize debt structure and reduce the proportion of long-term debt through debt restructuring; continue to reduce financing costs through overseas financing and syndicated loans, and revitalize existing assets; adopt equity investment with limited potential for asset appreciation Measures such as the sale of idle assets and the revitalization of assets.
Technological innovation. Li Xin created a proposal to establish a major environment that emphasizes technological innovation at the industry level, increase R&D investment, build R&D institutions, research institutes, and institutions to form technological innovation alliances, and promote the integration of production, education, and research, and the transformation of scientific and technological achievements. For enterprises, we must pay attention to the construction of technological innovation system, promote the enterprise culture of respecting knowledge and attaching importance to talents through the introduction and cultivation of talents, improve the mechanism of employing people, retaining people, establishing channels for the development of technicians, and cultivating enterprise technology. Innovative ability to enhance the core competitiveness of enterprises.
Management effectiveness. Li Xinchuang believes that to achieve management efficiency, we must first rationalize the corporate governance structure, establish a modern cost optimization system, scientifically analyze the cost structure, sort out controllable and uncontrollable costs, and adhere to structural optimization, technological innovation, and management effectiveness. Perform a system cost reduction.
Li Xin created a proposal to establish an internal simulation legal person operation mechanism and a rapid linkage reaction mechanism for production, supply and marketing, to decompose the operational indicators of various departments, give full play to the promotion of informationization to enterprise upgrading, and promote the comprehensive ERP (Enterprise Resource Planning). Application, highlight supply chain management, promote MES (manufacturing enterprise production process execution management) system, promote lean production, and play the role of energy management center at a higher level. Through the above measures, lean production based on intelligent manufacturing and "Internet + Steel" is realized.
Diversified development. Li Xinchuang said that the development of diversified industries must master the law of enterprise development, follow the rules of the smile curve, and grasp the value-added links of design, research and development, and service, with the goal of making superior increments and adjusting stocks, horizontally coupling, and vertically extending the industrial chain. .
He suggested that enterprises can actively participate in the “Belt and Road†strategy and strengthen mutually beneficial cooperation with countries around the world; use the “Internet +†concept to achieve deep integration with traditional industries; focus on development priorities and fully consider the development base of various steel enterprise groups And regional characteristics, the development of diverse industries with industry, resource advantages and regional characteristics. He also pointed out that in the "going out" aspect, it is necessary to seize opportunities as well as prevent risks.
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