Financial Crisis Has Brought The Impact And Challenges Of The Glass Industry

  So far: from the U.S. subprime mortgage crisis, the rarely triggered by the financial crisis has caused the international and domestic financial market upheaval, stock market, futures market, foreign exchange market, insurance markets have been very serious impact. As the domestic glass market, the close linkage with the international glass market, the glass industry in this financial crisis obviously not be an exception. The storm to the development of China’s glass industry, the impact and challenges that can not be ignored.

One of the challenges is the decline in growth rate of the financial crisis led to a drop in sentiment in the glass industry. The current cyclical economic adjustment and the dual role of the financial crisis, the glass industry as a whole accelerated the decline. Flat glass production in the year 2008, the weight of about 570 million boxes, up about 5.1%. This is nearly 10 years, the glass slide into a number of output growth for the first time. According to the Chinese Ministry of Information and Building Materials Association of China Building Glass and Industrial Glass Association statistics, in 2009, the National Glass production grew more pronounced downward trend. Hebei, Shandong, Henan, Guangdong, Zhejiang and glass production decline. Decline in the growth rate of glass production in Henan.

The second challenge is to reduce demand for glass production in China in 2008 growth rate is an vital reason for decline in market demand has reduced. In recent years, the three main engines driving the glass industry — real estate, automotive industry and exports because of the international financial crisis emerged has been a significant decline and therefore I led to the simultaneous reaction of the glass industry. In March of this year, the domestic key glass enterprises 60 float glass production 31.26 million weight boxes, 1 March total weight of 93.09 million float glass production boxes. And the cumulative production in 2008 compared to 7.12% decrease. Cumulative production of up to 16.64 million in Hebei province is the weight of boxes, Shandong Province, 10.25 million weight boxes, Jiangsu Province, 10.21 million weight boxes, Guangdong Province, 9.88 million weight boxes, Zhejiang Province, 8.95 million weight cases.

The third challenge is the price drop and the glass industry, closely related to the real estate industry is immersive winter, the glass market is in a depression. China’s glass market in the current financial turmoil, but also with the RMB exchange rate and the volatility of international financial markets, glass consistent with the international market prices decline. After last September, Shandong glass prices fall, in October of glass prices have continued to decline across the province. Flat glass prices in the fourth quarter of 2008 fell to the lowest point in recent years, the current overall price remained at the bottom of the wandering.

The fourth challenge is the cash-strapped financial crisis, business inventories and capital lead to significantly increased risk. This year, the rate of glass production and sales declined, inventories increased, while inventories increased take up into two funds. Although the flat glass sales rebounded in October, at the end inventories fell last month, but still higher than the same month last year 11.09 million weight cases, mainly due to the backlog of ordinary float glass. Marketing status of ordinary float glass, flat glass industry with excess capacity, is still optimistic. Financial crisis of liquidity contraction, affecting a number of companies ability to pay. Money withdrawn from circulation, the glass products exporting, affected by the crisis, the purchaser time and money is hard to guarantee the recovery of arrears from the outside, Repudiation increasing, affecting a number of export-oriented benefits of glass enterprises. According to the survey, by the financial crisis, some glass companies have their stock funds and other factors led to significantly increased risk.

The fifth challenge is to export blocked by the financial crisis has led to a huge impact on the export business. China’s glass industry is mainly affected by the impact of the larger export-oriented enterprises. U.S. financial crisis triggered a global economic crisis, leading to shrinking demand around the world, directly affecting China’s glass products for export. Our country as an export-oriented economy, its main export markets are the United States and the European Union, the current financial turmoil has hit the real economy to the European Union, the U.S. economy is sliding into the edge of a recession, China’s trade surplus with the United States dropped dramatically, which on China’s exports of glass companies have some impact. Some glass exporters complained endlessly. Financial crisis led to reduced orders, many enterprises underemployment. In recent years, some of our glass companies have toward the world and the assets of these enterprises in foreign countries while the total assets of the enterprise itself is modest in comparison, but the financial turmoil has resulted in our country overseas, the glass is not a small proportion of the losses of the assets in the financial crisis under the action of slowly shrink.

6 is a hard business challenges and further deterioration of the financial turmoil, the business environment of glass, so that they feel more and more hard to survive. Generally speaking, glass production and operation of equipment involved in spare parts, raw materials, auxiliary materials, logistics, cost and manpower cost elements such as the cost of production prices rise sharply, so that the production costs of haggling to Shangcuan, corporate profits is being eroded. In September last year after suffering a greater financial turmoil, the end of the year 3, the domestic has been more than 40 float glass production line shutdown. Some rely on huge companies change hands or for the makers matching orders for a small factory, the business is unsustainable, and some have even closed down. Rising costs and product prices are low, leading to a double squeeze corporate profit margins decreased glass loss increases. Glass industry from the beginning of last year’s profit to a loss in the fourth quarter, until now still no losses.

Financial crisis on the development of China’s glass industry, the opportunities offered by

But to see that the U.S. financial turmoil to the challenges posed by China’s glass industry at the same time, but also for the development of China’s glass industry, provided a rare opportunity.

Opportunities for industry consolidation is one of the global financial crisis has led to a lower corporate valuation, for a relative shortage of resources to reserves of domestic enterprises through mergers and acquisitions, consolidation of resources to complete the international expansion opportunities. From the glass industry perspective, size, liquidity and diversification will reproduce, and a high degree of diversification of companies and large enterprises will have more channels for external financing, while small businesses will no doubt be eliminated. The glass industry will increasingly show the advantages of mass production. Crisis in the glass industry consolidation is also a excellent opportunity.

The second is a excellent opportunity for the policy in response to the U.S. financial turmoil, the country adopted the policy of giving benefits to the enterprise, like reducing taxes, financing, encouraging exports and expanding consumption will bring about excellent glass enterprises. In particular, the state arranged to further expand domestic demand, the 1,000 billion investment, its direction is to protect the nature of the comfortable housing project, rural livelihood and agricultural infrastructure projects, railways, highways, airports and other infrastructure construction, education, health and other social public utility, ecological environmental construction, accelerate the pace of independent innovation and structural adjustment as well as the earthquake recovery and redevelopment. More importantly, the 4 trillion economic stimulus package for the quake-stricken areas of the restoration and reconstruction, rural livelihood projects, rural infrastructure, ecological environment, protective homes projects, major investments in these countries will drive China’s glass market, China glass industry has played a huge role in promoting.

Options for responding to future market

Build confidence, overcome difficulties and survive the crisis, confidence is a response to the current world economic turmoil and financial crises, a powerful weapon. Enterprises depend on confidence in the stability of market expectations, by faith through hard times. Hundred years of financial crisis, the responsible persons to place forward higher requirements, can not consider problems with conventional thinking, but a clear grasp changes in the market and carefully plotting the development of a policy. Particular, we should focus on the current raw materials, technology, market and financial four key factors.

Reduce production and protect prices, speed up the sale, repatriating their capital building materials industry and real estate, is a heavy dependence on capital industry, many small and medium enterprises are operating in bank lending patterns, “monetary” tightening once bound to affect their corporate cash flow. At present, the “cut and protect the price, speed up the sale” has become a common choice of a lot of glass companies, some large glass companies have introduced measures to limit production, more and more small and medium enterprises could not stand the pressure of selection of glass cut out of business. The reality of falling prices for glass, some companies have set minimum prices and limiting sales price of glass in order to excellent benefits. We must strengthen capital and liquidity withdrawn from circulation. Export-oriented enterprises should focus on preventing the export of glass there is the risk of exchange earnings. According to the creditworthiness of the other party to do the corresponding export credit insurance; pairs of new customers to Kuandaofahuo. The glass in the domestic market, enterprises should also guard against the risk of money withdrawn from circulation, to prevent the deposition of funds to speed up movement.

Firm “going out”, and actively look for blank spots “going out” of corporate response to the financial crisis to seek better development of the inevitable choice. While the financial crisis will not have a current industry How do you look. But if the U.S. small-term credit mechanisms do not start soon, resulting in the U.S. consumer continued to shrink, which will have a huge export market of China’s impact. Let us storm the glass enterprises may be better to “go out.” Because the rapid decline in the global enterprise value for the acquisition provides an vital opportunity to strengthen internal management, reduce costs and make the conditions. At the same time, after turmoil and the real value of foreign assets will become increasingly apparent, this time our overseas investment to be value for money, which gives our country has the strength of glass enterprises with opportunities.

And encourage superior corporate restructuring, mergers and acquisitions corporate restructuring not only saved the lives of inferior inferior enterprises, but also advantageous enterprises larger and stronger. Mergers and acquisitions and glass market has fantastic relationship. The more glass market in the doldrums, the more conducive to merger and reorganization, and the corporate merger and reorganization into a hot industry, the market is able to accelerate the re-shuffling and integrated.

Adjusting the structure, innovative present, China’s glass deep processing rate of only 30%, while the world average of about 55%, developed countries, 65% ~ 85%. The added value after processing in China is only 2.5 times the original film, the developed countries is 5 times the processing in the deep processing rate and depth are honestly far behind. All of the glass enterprises to provide a broad market space. In particular, safety glass and energy-saving glass, the annual growth rate in more than 30%. The financial turmoil has brought China’s glass industry structure adjustment of new opportunities, therefore, to deal with the financial crisis and better development, we must adjust the industrial structure, energy-saving emission reduction, elimination of high pollution, high consumption enterprises.