China Valve Association Secretary-General Song Yinli make suggestions for industry development.
Self-dependent innovation seizes high-end market, taking profits from after services
On the afternoon of January 22, The Fourth China (NanAn) Valve Forum held in International Convention Center, hundreds of valve manufacturers all around China get together to seek developing opportunities. In the forum, China General Machinery Industry Association (CGMA) Valve Branch (or China Valve Association) Secretary-General Song Yinli made an speech of <Adjust to now normal, Open up a new situation to Valve Industry>, it analyzed the situation and challenges that we are facing, it indicated the way forward for attendees in the spring time of year, it also poke clouds and mist for industry developing.
Current Situation
China has become the biggest valve manufacturer in the world.
"Almost all over the world are focusing China Valve." As he began to speak, without preamble, Song Yinli point out the Current Situation of Chinese valve Industry: Our country produced 1,031.9 tons of valve, Companies above designated scale (Annual turnover above 20 million RMB) are more than 1700, earned 257.7 billion Yuan of sales, exprots value is 37.1 billion Yuan, gain profits 18.3 billion in total, international status is getting more important. Of the 1700 above designated scale companies, there are 81 valve companies from Fujian, rank to No. 6, sales revenue 23.5 billion Yuan, fourth place in China, exports 1.3 billion, The sixth place in China, gain profits 1.8 billion in total, rank to fourth place.
According to the statistics, In the ten years period from 2004 to 2014, Chinese valve industry developed swiftly, the sales revenue increased from 30 billion Yuan in 2004 to 257.7 billion in 2014, even the market last year is weak, but the whole year sales also increased by more than 10 billion.
A big part of answer, for valve industry get such magnificant achievement, is that valves has realized localization, Song Yinli rough statistics, after 2005, the localization rate of nuclear valve in our country is only 6%, while in 2014, the valve localization rate has reached to about 80%, in addition, Petroleum and Chemical valves, long-distance transport pipe valves, coal chemical industry valves localization rate have risen up to 85%, 90%, 75% respectively.
Difficulties and Solutions
The rate of profit of Domestic Valve less than 7%.
"Rate of growth from high-speed to medium speed, production capacity oversupply seriously " In the forum, Song Yinli pointed out the dilemma that domestic valve are facing He say, among thousands of valve companies in China, there are hundreds of them reported a loss. loss-making companies growth 33% year on year and total production value are basically flat, sales income increasing rate recorded lowest level for 15 years, as well as export have also been affected, increasing by only 5.4%.
"Despite of increasing of localization rate, the total profit rate is not high." Song Yinli said, the profit rate of our valves is very low, about 6%-7%, while imported valves could reach to about 50%, several times than demostic valve, some of products may higher than 10 times.
Users worried about Chinese demostic high-end valve, as a result, these valve normally rely on imported valve, that makes China imported more than 10 billions of valve from abroad. In the view of Song Yinli, this 10 billions come as a big cake waiting for digging to demostic valve companies.
Technology and management limits demostic valve step to high-end market. Song Yinli has ever visited a large scale valve enterprise along with CNOOC to find a supplier. They went straight to workshop to see the records of weldding. instead of checking their sales figures. "The results was faked at a glance, they were just coping with checks"
In Song Yinli's opinion, there is a long way to go to be a leader of the world, innovation ability should be improved. Especially the new products developing, now we are still stay in the postion of impoving improted products, lacking of original products. Therefore, Companies is urgently in need of developing and researching, improving Self-dependent innovation ability.