After the sturdy 2009-2014, China's corrugated board industry has ushered in a hard time. In the case of paper mills raising prices, peer competition, leap-forward boiler reforms, high social security costs, and high logistics costs, the hard-to-force index of the corrugated board industry bosses exploded.
First, the corrugated board industry is in a dilemma
In recent years, the rising wage standards, the rise of the original paper, high oil prices, high electricity prices, high tolls, etc. are like the blood vessels inserted in the corrugated cardboard industry in China. It is a miracle to survive.
It should be said that the turning point of the corrugated board industry began after the Spring Festival in 2015. Since the withdrawal of 57 paper mills in the water district of Dongguan caused the three consecutive rises in the Pearl River paper industry, the butterfly effect quickly caused resonance in the national paper industry, and the domestic paper industry resumed. Upswing. According to incomplete statistics, the price increase of the group initiated by the paper industry in the past two years is no less than fifteen times. The price increase of raw paper is fatal to the corrugated board industry, which relies entirely on raw paper to survive. According to a manager of the Pearl River Delta Corrugated Card Factory, the current industry gross profit has been reduced to 14-18%, which is a zero point. If the labor cost, the loss of the base paper, and the production capacity are slightly different, the company will fall into a loss.
The real frustration may not be the price increase of the original paper. After all, the price increase of the original paper can also be transmitted to the downstream carton enterprises through the price increase of the cardboard. Since 2012, there have been corporate closures and evacuation in areas where the corrugated packaging in the Pearl River Delta, the Yangtze River Delta, and the Bohai Sea have concentrated. Taking the Pearl River Delta as an example, the number of toy factories, furniture factories, shoe factories, garment factories, and electronics factories closed down or evacuated, causing thousands of carton factories to close down. In recent years, Guangzhou, Dongguan, Shenzhen, Foshan, Huizhou and other places have entered the old Lai black list of packaging companies more and more. On July 22, 2016, among the 10 “blacklists” of household units announced by the Dongguan Human Resources Bureau, three of them were packaging and printing enterprises. The bankruptcy of the downstream customers in the cardboard industry has closed down, and the arrears of arrears have reached the point where the owners of the paperboard factories are sleepy.
Of course, boiler renovation, labor costs, high rents, high oil prices, and high tolls are not fuel-efficient lights, and everyone is enough for the boss to drink a pot.
Second, forced to expand capacity expansion
It stands to reason that in the past few years, China’s economy has slowed down, the export market has shrunk, and domestic demand has become weaker. The corrugated board industry should “go to capacity”, but it’s hard to understand that cardboard for the past few years. In the industry, especially in the Pearl River Delta region, manufacturers are expanding their production capacity.
For example, Shengyuan Group, which entered the corrugated board industry in 2008, has introduced nearly 30 tiles in the short period of 8 years. Since 2012, the group has set up Heshan Shengyuan, Hanchuan Shengyuan, Kunshan Shengyuan, Jurong Shengyuan, and plans to add about 15 new tile lines. In recent years, the Pearl River Delta's revitalization, Huali, Huihua, Hongfu, Xinda and other types of paperboard factories have also replaced the width of the tile line or technical transformation. In addition, Guoteng, Yongfengtai, Huaye and other manufacturers are planning a new line.
Which one is this trouble?
Statistics show that as early as 2005, Dongguan already has more than 600 corrugated board production lines, but most of them are 1.6 meters wide domestic tile. Up to now, these production lines have been aging, and the capacity and efficiency cannot compete with other companies' high-speed tile lines of 2.2 meters or more. So some cardboard companies that are not willing to withdraw from the market have to clench their teeth and close the new line. As the new high-speed and high-width wide-watt lines are several times that of the old tile lines, the overcapacity of the Pearl River Delta tile line is becoming more and more serious, and the industry is in a red sea.
Third, the industry showdown is inevitable
For the future of the corrugated board industry, the opinions of people inside and outside the industry are quite different. Xiao Bian believes that the industry showdown is inevitable in the next few years. Most paperboard companies with backward production capacity but unable to update their equipment can only choose to quit, and a small number of well-equipped and well-managed enterprises will become survivors of the market's violent elimination.
In the past few years, although the industry profits have been declining year by year, it is good to provide strong support for the e-commerce packaging and the rapid growth of consumer goods packaging. In the case of the withdrawal of foreign-funded enterprises, the corrugated board industry remains. Maintain a more balanced growth.
However, the corrugated board industry needs to be wary that the situation is undergoing profound changes, which are very unfavorable for the cardboard industry:
The paper industry is increasingly concentrated in production capacity, and the paper industry has regained pricing power by raising the price of the group. Although the current paper industry's tons of paper profits are generally above 300, paper mills do not seem to be willing to slow down the pace of price increases. What is certain is that the RMB exchange rate will further depreciate in the second half of the year, and the momentum of the original paper price increase is difficult to be suppressed.
The production capacity of the paperboard industry is relatively scattered. The paperboard enterprises in the Pearl River Delta have tried to carry out the price hikes several times because they cannot be unified and co-ordinated. Under the unfavorable situation of overcapacity and poor operation of downstream third-tier plants, low-price competition will continue until the enterprises with relatively small capacity, cash flow and management are eliminated.
Due to the withdrawal of foreign capital and the collapse of private enterprises, the number of unemployed people is far more than expected, and real estate is sucking the blood of ordinary working-class people. Judging from the collapse of supermarkets and supermarkets across the country, the consumption power of Prozhong is shrinking sharply. In the future, the market for fast-moving consumer goods such as food and beverages and fashion products such as daily chemicals, clothing and footwear will accelerate and shrink. The situation in Venezuela is another matter. These will accelerate the elimination process in the cardboard industry.
In addition, under the low-price competition, the capital chain of many cardboard companies has gradually dried up, but banks are not willing to lend to the overcapacity of the physical industry, which may become the last straw to crush many cardboard companies.
Finally, corrugated packaging will also enter the custom era with downstream customers. The corrugated board line is essentially a product of the industrial 3.0 era, and its production method may be replaced by a new intelligent production method.